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Indian Railway Catering and Tourism Corporation Ltd
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Ladies and gentlemen, good day and welcome to the Q1 FY '23 Earnings Conference Call of Indian Railway Catering & Tourism Corporation, IRCTC.
[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Devang Bhatt. Thank you, and over to you, sir.
Thanks, Rochelle. Good afternoon, everyone. On behalf of IDBI Capital, I welcome you to the Q1 FY 2023 Earnings Con Call of Indian Railways Catering & Tourism Corporation or IRCTC. On behalf of IDBI Capital, I would like to thank the management for giving us an opportunity to host the call.
We have with us management represented by Ms. Rajni Hasija, Chairperson and Managing Director; and Mr. Ajit Kumar, Director, Finance and CFO. I would now like to hand over the call to the management for opening remarks. Later, we can open the floor for Q&A. Thank you. And over to you, Rajni, ma'am.
Thank you, Devang. A very good afternoon to everybody. At the outset, let me welcome you all to this con call of IRCTC Limited for the quarter that has ended on 30th June 2022. I hope that you and your dear ones are in good health and spirit of the independence day is going on as [Foreign Language] is being celebrated by all of us.
Yesterday, our company has announced unaudited financial results for the first quarter of fiscal 2023, And the same has been disclosed on both stock exchanges, too. I shall first give a brief overview about the first quarter of this financial year, post which our Director of Finance, CFO of the company, too, will provide all the details of the performance of all business segments. After which, we shall have a question and answer session.
In the first quarter of the current financial year, I think this particular quarter was without any restriction since the pandemic had hit. [ All of us ] and IRCTC business model has once again demonstrated its resilient nature and its ability to scale up.
First quarter of this financial year, the revenue has reached at INR 853 crores, and we saw a strong growth of 23% quarter-over-quarter and more than 2.5x on the year-over-year, given that the base quarter had the impact of pandemic.
So if you compare with the previous quarter, there is a 23% growth. Importantly, the revenue -- for the first quarter of the 20 -- year -- financial year '23 has not only surpassed the pre-COVID level, but it is at all-time high as regards the quarter run rate is concerned.
In the quarter -- last quarter of the last financial year, the catering segment has been the main driver of the quarter-over-quarter revenue growth, and the revenue for the segment has also touched a new high. Similarly, rail in segment has also surpassed its peak revenue of the pre-pandemic period and also shown a better capacity utilization of all the [ plans ]. As you would be aware about the difference in the profitability of our business segment, the change in the business mix resulted in EBITDA margins coming to 37.6% versus 45.8% year-over-year and 41.1% quarter-over-quarter.
As I shared earlier, that the headwinds of the pandemic behind the travel and hospitality can look forward for a better financial year this year and beyond, too. IRCTC business segments can also look up to further improved performance in such industry environment. Without -- not taking much time of here, I shall now hand over my call, this particular call to my colleague and CFO of the company, Ajit Kumar, to brief you about the financial and segmental performance of the company. Thank you.
Good afternoon, everybody. And I hope everyone in this spiritual independence, there is a -- I mean, join the year. I shall first give a brief overview about the Q1 FY '23 results, and then we'll have the question-and-answer session.
Q1 FY '23 revenue saw another quarter of strong improvement on improvement, both on quarter-on-quarter and year-on-year basis. The revenue of INR 853 crores grew by 23% quarter-on-quarter and by 250% year-on-year, given the impact of the pandemic in the first quarter. Of course, that base, I mean not right for the comparison, but this is the fact that this comparison we are taking, given that cutting segments, which are relatively lower margin, also saw sharp repeating revenue shares, the overall EBITDA margin 37.6% versus 45.8% year-on-year and 40.1% quarter-on-quarter. However, absolute EBITDA has grown by 15.7% quarter-on-quarter to INR 321 crores, which is an all-time high.
Let me now move to the business segment of the company. Internet Ticketing. This segment continues to demonstrate resilience, and revenue for the quarter was at INR 301 crores, which is more than double year-on-year and grew by 3% quarter-on-quarter, while the EBITDA margin has seen -- was seen a quarter-on-quarter decline, but it is a similar level to that in Q3 FY '22 and was at 34.5% in quarter 1 FY '23.
EBIT quarter-on-quarter declined due to reversal of provisions in the [ tangible ] quarters. That is Q4 for around -- that is INR 14 crores roughly.
Catering segment. Now this segment has further improved the performance over the strong quarter-on-quarter growth seen in Q4 FY '22. The revenue for this capping segment has touched a new high at [ INR 2,50,052 ] crores, which implies a growth of 32.3% quarter-on-quarter and over 5x growth year-on-year as the first quarter, had restrictions, of course, due to travel restrictions and the mills have down the train, there were restrictions.
The share of Catering segment to overall revenue increased to 41.3% versus 38.5% in and 23.3% in quarter 1 FY '22. Importantly, the EBIT margin for this segment has improved to 12% versus 9.4% quarter-on-quarter and a loss on a year-on-year basis. However, given that it has relatively lower margin, the overall margin has been moderate in the current quarter.
Then the Railway segment. It has seen quarter 1 FY '22 revenue of INR 83.6 crores or saw a growth of 61.2% quarter-on-quarter. As a result, the EBIT margin has moved back to its double digit at around 11% versus a loss in quarter 4. Now this Tourism that includes states in the segment, has saw a growth of 43.8% quarter-on-quarter to INR 115 crores. Importantly, they reported positive EBIT of INR 202 million, was a loss in the preceding quarters due to the travel restrictions and the pandemic.
For Q1 FY '23, the cash and bank balances and the net worth of the company as of the end of the quarter is INR 2,175 crores and INR 2,132 crores, respectively. That brings to the end of my opening remarks. Now we can state that we move to the question-and-answer session. Thank you.
Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]
Our first question is from the line of Jinesh Joshi from Prabhudas Lilladher.
Congratulations on the steady quarter. Madam, I have a question on the Catering piece. I see the revenue at about INR 352 crores in this quarter. So does this take into account the effect of enhancement in license fee due to a tariff hike? And should this be the steady quarterly run rate from here on?
And also secondly, if I look at the catering expense in this quarter. As a percentage of catering revenue, it was about 74%. And peak over, this number was in the band of 62% to 65%. So is there any element of one-off here?
Well, the your answer to your first question, Mr. Jinesh, that the impact of the sales assessment has not been taken in this quarter because once we complete the assessment, then some time has to be given to the licensee to arrange for the funds.
So we are still in process of completing that because of heavy traffic moving on, on the trains. The process has been -- the peak season is over. Now the lean period is no less. So that is being completed. So maybe the next quarter, in the present quarter, we would be completing, but that impact may be seen in the third quarter only.
Got it. So this INR 352 crores of quarterly run rate has a further possibility of increase from here on, right?
It looks like that only. Because in this quarter, we were able to tender most of the claims. So you could see many of the units which were lined are otherwise closed or the trains which was not earlier tendered because of all the trains were running on the ready-to-eat model. All trains now are being brought on the tendering mode. Still, you will see -- you may see some more improvement in the next quarter. If -- the more trains we are able to tender out.
Sure, madam. And on the expense part, if you can explain why the cost was higher at 74%?
See, it happens in the -- maybe some -- I think some overdue payments, which were to be made have been made. And as our payments earlier used to be 62% to 65%, now the expenses have gone up to the tune of 74% is because of some adjustment of the licensing deals has been done. And yes, our payment of expenditure for the Rajdhani/Shatabdi, where the licensee requires a lot of handholding in the continuity of the business. These payments, rather, we have started making, which we were not making earlier. So that is why you could see that it's there.
So this is a steady number to look at? Or how should we kind of...
The thing is we will remain in that tune only. Because in licensee, payment for the RSG has to continue. It's a continuous process.
Got it. And secondly, madam, I have 2 bookkeeping questions. I think in notes to account, we have mentioned that there is an arbitration award of INR 74 crores, which has been announced in the favor of certain licensees. So if you can explain what this exactly pertains to? And secondly, there is also some anti-profiteering notice of about INR 50 crores. So what is this matter? If you can just explain these 2 parts to me.
Well, anti-profiteering, I would like to answer your second question first in the anti-profiteering. When the tax regime had changed, so some changes were to be made, and we are also fighting it because our environment of working is not tendered as compared to the others.
Here, the pricing is controlled by Ministry of Railways. So we have challenged this particular case, and the case is still sub judice, so I will not be able to comment or make a specific comment in this forum on that.
But railway, when the distribution of this particular Rail Neer, the packaged drinking water is concerned. It's the environment in which it is distributed and produced is very different and the rate, how it is decided is very different from the market. So same set of rules cannot be applied to this particular segment. Based on that, we have taken up the matter in the higher court and we are contesting that.
Secondly, when arbitration case, which went against that, that has also -- we have also filed -- we have also filed an appeal against it. So matter is still sub judice. The impact -- we are waiting for the result. I think hearings have started, but it's going to take some more time before we comment upon this.
But madam, just in case, if the verdict is announced in the favor of these licensees, will the contingent liability fall upon us? Or on Railways? Because the notes to account sees that it is railways. So I just want to clarify this bit.
So contingent liability may not.
Under arbitration only.
Yes, it is still under arbitration.
So what I was asking is just in case, if the arbitration goes in favor of the licensee, who will pay that amount?
Why should I think -- when I'm conducting the case, why should I think that the licensee will win? I will contest this case with the whole spirit.
And moreover, this particular amount, which they were talking about, is not of the IRCTC period, when the trains were taken over by IRCTC. This amount is of the period when the trains were being run by the Indian Railway. So in that case, it can only happen, we can only pay them back once we get the money from the Indian Railway. So that is what our point is.
Got it. Got it. This explains this. Yes, yes.
This not our period. That is why. But we are contesting with the whole lot so that this liability doesn't fall on the other party also. We are part and parcel of Indian Railways.
This clarifies this doubt. And lastly, if you can just give me the breakdown between convenience and non-convenience revenue for the quarter.
The convenience fee this year has been -- this quarter has been INR 207 crores, right? And if you ask me the total, it is the total business, including that, total was INR 308 crores. Out of it, INR 207 is that. So nearly INR 100 crores is on the non-convenience space, and then once that order is on the account the non-convenience space, so nearly 50% of that, of the convenience.
Our next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Ma'am, can you give us the ticket number for quarter 1? And what is the data on or update on the 2S plus?
The number ticket book in first quarter has been around INR 58,00,011 crores. And your daily average comes out to be 12,73,000 tickets.
As an update -- ma'am, update on the 2S plus, which was supposed to be...
2S, as we had anticipated earlier, it used to be nearly 38%. Now in this particular quarter, the overall percentage of the 2 has reduced to 26.9%.
No, it was -- this notification was valid until June '22, right? Until June '22, it was -- still be booked via...
Yes.
So what is any update there on that -- about 2S?
In the month of July, the 2S percentage is more or less nearly same.
So it still continues to be on the Internet form of booking?
Yes. Our average of the previous quarter has been 12.73 because it was a peak season, as I mentioned in one of my earlier calls. July also saw -- normally, July is a rainy season. We see some declines. Some decline has been dealt, marginal decline, which will be also -- now the festive season has again started. So we will compensate in this month.
Our next question is from the line of Deep Shah from B&K Securities.
Ma'am, first on the catering piece, if you could help us understand better. What are the margin levers on your end? Do we see any pricing improvement happening any time soon given that now there is a clear change in terms of user preferences in terms of eating out?
Secondly, ma'am, on the 2S, so just continuing the question asked by the previous person. Do we see this number falling down drastically, given that a lot of trains or 2 is now taken out of being resolved online?
Answering your second question first. That is -- the number of 2S have seen decline, total number of booking getting reduced. As we had mentioned that this was a temporary kind of a revenue available with the IRCTC, which was to be reduced.
But as we have noticed that the reduction is not as drastic as we were anticipating. Yes, there is going to be some downfall as far as the number of ticket is concerned. Last quarter, we had overcome that by the volumes, and our bookings were much higher than the previous year average.
When the 2S booking was running in a full swing. Since the impact of that is going to be more effective from the July, we normally see the average booking happening to the tune of INR 11,02,000 more. At times, it is INR 50,000 more than few days. But the ERP booking of the festive season has also started. So some gain will be there from that side.
So to a ticket, yes, we'll have some impact, but should be overcome by the other factors also. Then answering your question on the catering. You wanted to ask the margins indicating. Normally, in the entire catering business, our margins are ranging from 14% to 18%. So this is the total margin when we take -- each product has its own margin.
Since the preferences of the people are changing, so at the same time, we are also showing some better growth in the catering. In the last quarter, as compared to our 20,000 or 21,000 meals a day, our average booking have been more than 35,000, nearly 35,000 orders -- meals a day.
In fact, many hikes were seen in the month of June and August also. Here, we had made a record booking in the month of August. More than 50,000 meals were booked in one of the occasion on June 12, we had booked around 44,000 meals in a day.
So the preferences, if they change, the other sector is gaining. Our revenue, total revenue from the monthly average in the year '21, '22 was INR 1.67 crores. However, in this quarter, it has been INR 2.63 crores. So there is a jump up of 57.5% in the e-catering.
Earlier, the train side vending, trains was giving on section-to-section basis. If you ask me, the number on the train side vending, I can tell you, the more trains have been given on end-to-end. 247 trains have been given end-to-end, where will you get a better licensee.
And the sectional trains nearly, 363 trains we have given on our BSE contracts in this section. That makes a total about 600 trains. And in addition to this, of course, you have trains in the different regard, 436 trains. So that makes a total of nearly 1,046 trains.
So -- which was never -- which was not there earlier. So it is the hard work of the IRCTC team that we were able to award these contracts, and many more such contracts are in the pipeline. We are going to award more, so that will have some impact on the catering business, certainly.
This is really helpful. Just a follow up on the 2, as if I may. So are a lot of trains taken out from being reserved? Or the trains are still existing on a reserve basis and some coaches are only allocated for reserved?
I would say that it was other way around. It was other way around because there was no offline booking. So the trains were made and reserved -- the trains were made reserved temporarily. Now they have been made, many of them have been made unreserved again.
It was a temporary kind of a rail which IRCTC tapped and our revenue could sustain. And not only that, the traffic, which has been diverted in the reserve segment, we have been able to retain because our daily average ticket booking is nearly INR 11,00,000 or so. So you can say that we have been able to retain few customers in the reserved segment fully. But at the same time, some segment of the unreserved, which has not been converted into reserved, yet are still with us.
That's perfect, ma'am. If I can squeeze in one more question, ma'am, could you help us with occupancy of the [ pages ] trains that we are running? Will I see -- when we track online, we see an uptick in their occupancy. So is that assessment correct?
Yes. The occupancy has been good in the first quarter of this year. The trains have done a fantastic job. And the revenue was nearly INR 41 crores, and it was -- it has given us the profit, more than INR 5 crores.
[Operator Instructions] Our next question is from the line of Shridhar Mandke from FIS Global.
Am I audible to you?
Yes, you are very much audible.
Yes. So I have a couple of questions. First is about the retiring room upgradation. You had mentioned in the last call that new contracts were to be awarded for retiring room upgradation. So any progress on that? And would it help in increasing the revenue? Or has it already helped in that regard?
Yes, yes, yes, of course. Because in the retiring of the category, we have done -- recently done a road show, and we were successful in awarding 23 such contracts in all the zones and rest of contracts in the pipeline, and we are also in process of taking over more and more retiring rooms from the railways.
First, the possession of those retiring rooms are to be taken and then they are to be tendered out. Then we again plan, give the tender for the upgradation. And a few of our tenders are opening by -- after 18th of August. So you can say the retiring room upgradation work is going on a full swing and the results will be forthcoming in this quarter. But actual commissioning will happen only in the third quarter.
Okay. All right. Yes. The second question was about Tejas, whether we have achieved a breakeven or not. But I think you have already mentioned that. So I'll probably take the third question. Can you give us an idea about how the IRCTC air segment is performing?
Well, in IRCTC air segment, IRCTC has performed. Not that -- on that happy note, because our average segment being booked is nearly 5,500 per day. So our revenue has been in the 3, you can say the income from booking and cancellation, if you ask me, we could earn nearly INR 3 crores of that.
And some changes have also taken place that in the month of June, we have implemented our increased license fee, increased convenience fee model. Earlier, we were charging INR 50, now we are charging INR 100. And we are trying to bring more and more offers from various banks and other payment methods so that the booking on our hotel can also increase.
Okay. All right. My third and last question, madame, would be regarding the opening note that you have mentioned on the call. It's about the e-ticketing margin that has declined very marginally from quarter-on-quarter. And you've mentioned that it was because of a reversion of provision of INR 14 crores. So can you shed some more light on that? What was that? And what exactly is that?
Well, some adjustment has been done in the books. So last year, what we had done, we had CRP provisioning is done in the account. So we had done more provisioning. So that, we had reversed last year. So it was more. Income was more in the total.
As far as specific Internet ticketing segment is concerned, so some impact of underserved ticketing is still there. And now the results will be seen in this quarter, because the first quarter is very challenging for all the Internet companies.
But overall ticketing has grown. If you ask me, the overall average of the ticketing in this quarter, it has been more than the overall average of the previous year also. It is INR 12,73,000 per day, which is quite high.
[Operator Instructions] The next question is from the line of Akshay Bhor from Citadel.
Sorry, but just want to clarify first up on this 2S question again. There have been ,therefore, earlier a notification that from June onwards, we will not be booking any unreserved tickets. Because that's what you -- that you did witness during the pandemic. Just want to understand that if -- you've stopped booking on those trains, right? Now is that understanding correct?
I would like to make you the procedure clear, all of you. Whatever inventory is offered for sale, it is offered by the Indian Railways, whether reserves or unreserved. So that particular inventory and database for that is being maintained by Indian Railways. We call it forming a train.
A train is formed by a database section of Indian Railways in various zones. So those sales were offered to us for sale, and we could sell it in a better manner and we sold it. We earned a good amount for us.
Since these trains are no longer considered worthy for giving on our reserved segment, so the Ministry of Railway has been gone then. So that was a temporary kind of a revenue, which came to us for 1.5 years. And we tapped it very, very well.
Still, our booking is on a higher note. When we initially started in the pre-COVID levels, our daily average was nearly 8,50,000 tickets a day. That was the maximum inventory being sold by us in the resort segment. Now we are selling nearly 11,00,000 lakhs of net of tickets. That is [ purdy ].
So we have already tapped a good potential. Nearly 80% of the booking is happening through us, through IRCTC, so reserved segment. Unreserved segment, which just temporarily come to us, now gradually has gone back. So the booking has shown some impact, but at the same time, we have gained from the reserved segment and the new -- people who have now shifted from offline booking to online booking.
Ma'am, I normally understand, like, the impact...
The impact is -- impact has been there. It is -- but it is not going to be that much. It is going to be covered through the festival booking and other bookings happening through our website.
No. We just want to understand from then, when does the impact is visible. And that's the only thing we want to understand. We understand that you...
It started in a paced manner, [ Shridhar-ji ]. It started in a paced manner. A few trains went back in May, few trains went back in June, few trains went back in July.
Got it, ma'am. Got it. That's super helpful. And we appreciate that you've gone from 75% Internet penetration to now more than 80%. And that's why the overall price has increased. But ma'am, on a steady state basis, at 8.5%, which you are doing, can that number be 10,00,000 per day? Is that like a fair understanding? Or it can be lower than that as well?
Few days, it can be more also. even more. It can reach up to 13,00,000 also. So the key season, more, the booking of the Diwali is going to be near. And we normally book 120 days. And when I talk about 11,00,000, it is the average booking I'm talking about.
And ma'am, this is ex of 2S, right? I mean, all of this we are talking about, ex of 2S?
I'm not able to -- could you be a bit louder, sir?
I'm saying this is all ex of 2S that you can book 10,00,000 per day as well from the earlier 8,50,000 per day?
Your question is not clear, [ Shridhar-ji ].
Sir, can you please adjust? If you're on speaker phone, switch to handset because your voice is a bit muffled.
Okay. Is this better now?
A little better.
Yes, ma'am. I just wanted to clarify. The 8,50,000 per day number that you were doing pre-COVID, what will be corresponding number now if you adjust for the 2S bookings that you will not do from this quarter...
If you ask me on a personal note, I would like to book 100%. But normally, it is booked because new bookings are going to be on the offline mode. So whatever inventory is available to us and whatever, how many people we are offered to our website, we are going to handle them.
So we can -- we are ready to handle as much as we can. But normally, as of now, we are booking nearly 11,00,000 tickets in a day. In spite of the fact that the 2S is gone in many trains.
Okay. Okay. But not completely gone, right? So that's my only question. Then 2S is completely gone, and that 11,00,000.
I cannot tell you because I told you we don't make the trains. Because there are many trains, many such trains. I think same question is being asked again and again. For the benefit of others also, I would like to explain that the train is being fired by the railways. They were given to us for sale. We sold them very happily.
And now in a paced manner, railway has been doing that from the reserve segment. They have, again, come in the unreserved segment. So a few trains were with us even in the May. Few were in the 2S category was also with us in the June and few were also there in the July. So there is a probability that you may -- maybe there in the month of August as well.
Got it, ma'am. This is super clear, and sorry to be asking the same question again.
It is not that it is go. It has gone in cases.
Okay. Okay. Fair enough. This is super clear now. And just on the catering segment. Obviously, very strong performance. I just want to understand from a full year FY '23 basis, what kind of revenue are you targeting from Catering if you have any numbers in mind?
In one of my previous con calls, we had presented that in the Catering, if everything goes fine and nothing goes -- I say I'm right. I will not call wrong. I'm right in the form of a COVID-like thing. So we would be touching nearly more than, I think, even more than INR 1,500 crores also in a year, right.
Got it, ma'am. Got it. Got it. Perfect. And just on the margins, both rail and -- we know that there are some adjustments and you could pay some share of the pie to railways now. Are these margins in railway and catering sustainable? And can you work with these launches this quarter?
Still sustainable, sir. Still sustainable, but for the current year, we have approached the Ministry because we have already paid INR 21 crores in the previous year. And this year, because of the loss in production because of the COVID and other things, that we would not be paying fees, the sharing of the revenue, not payable in fact. So we have already approached Ministry of Railways, that it is not payable during the current year. The previous year...
But ma'am, my question was still, the margins you reported in...
Margins, still we have. Yes, we have.
This quarter, we have many.
This quarter, we have made up a good profit in the Catering -- in the Railway segment. If you can see, let me see...
Ma'am, we have the numbers, so yes...
Yes. Yes. Nevertheless, I will be happy to share with you. In Railway segment, the profit has been nearly INR 9.18 crores profit. And last year, on last quarter, the losses were to the tune of INR 24 crores, out of which INR 21 crores we paid to Indian Railway.
Our next question is from the line of Madhuchanda Dey from MC Pro.
I have a couple of questions. First is -- most of them data keeping. One is in this first quarter, what's the capacity utilization in the Railway segment?
It has been more than 70% in all the -- all 3 months. All that I can share you in the month of April, the capacity utilization has been 74%. And in May, it was 82%, June, it was 83.48%. And July, I will share in the next quarter.
Okay, ma'am. Was this...
Your voice is, again, cracking, ma'am. Can you be a little bit louder please?
Yes. Yes. My question is, ma'am...
I'm sorry to interrupt, Madhuchanda. If you are connected on a speakerphone, please switch to handset only while you're asking your question.
Can you hear me now? Am I better?
Yes. Much better.
Yes. So ma'am, just the capacity ramp-up schedule for Railway in the coming few years?
It is scheduled. Our -- this plant, Simhadri plant is almost ready. We may commission it any time. We are waiting for one of the license. So that one upgradation, that 1,22,000 -- 1.2 liter -- I think 1,22,000 liter will be there very soon with us.
And our Bhusawal plant is also nearing completion, maybe ready near October. The 2 plants will be opened up this financial year. This -- before December, of course.
And our earlier capacity, maximum capacity has been 14,80,000 liters a day. So that will now ramp up from 14,80,000 to -- you can add 2,00,000 more to that, 16,80,000, we will be achieving before December.
And in the next few years, what's the plan, ma'am, for the...
The Bhubaneswar plant will come up. Our [ Udyavara ] plant will come up. Our Kota plant will also come up. So you can add 3 more lakhs, which is going to be 16,80,000 plus 3,00,000, nearly 19,00,000.
By end of FY '24?
Yes, should be.
Okay, ma'am. That's really helpful. Just one last question on the catering business. As you mentioned that you're going to tender more and more in the new trains. So what is the maximum capacity that you can reach in this business? And where are you in that journey?
See, it all depends how many rails railways start. If railway is going to run more trains, we will be providing more catering to the trains. As of now, whatever trains have been offered to us for providing catering, be it any form, be it with the pantry cars or without pantry cars. So a few trains, people were ready to take on end-to-end basis. Those have been catered, tendered out on an end-to-end basis.
Few trains on segmental kind of a -- tendering to that also has been tried out. Our nearly 333 trains, TSV tenders are still in the pipelines and few are in the process of commissioning. So if railway is starting more trains, ma'am, so we would be tendering more trains. So we are ready to handle any amount of flow.
Just to get a sense of the number, suppose of the total trains, which are run by Indian Railways. In what percentage of trains are you already providing catering in some of the other forms?
Railway is running many passenger trains and many intercity trains. So we try to provide the keeping on the trains where we have at least one overnight. And some prospect of the sale is there.
And so that you can get licensing. Catering. provision in all the trains without licensing doesn't make any sense. So wherever the business probability is more and the directions are there to provide the catering, there we provide catering in the train. So -- and as of now, we are providing nearly 436 trains with the pantry car and 610 trains in the TSV segment. And it is -- if there is a demand, we'll be able to supply in these even in the intercity trains as well.
Okay. And there are 333 tenders have been floated so far, which will come...
They are in process of decision, because few sectors which are unpopular, they generally don't go very easily. So you have to work very hard to put them on track. And it is demand and supply, where demand is more, so immediate tendering is completed. And where the demand is less, the licensee also understands that. It's a pure business, ma'am.
Okay. So ma'am, one just last question, and this is a slightly long-term question. Like, you have done exceedingly well. I mean, also, now see in the [ next exchange ] business. But we are almost reaching our peak penetration level over there. I mean, of course, there will be a single-digit growth. Even in the catering, we have progressed very far.
But the future growth is contingent on the new trains being made available. And of course, railways, yes, there is capacity expansion, but that is not going to be kind of a game changer. So going forward, I mean, looking beyond FY '23, what could be the key growth drivers for this company? I mean incremental growth. I know steady-state growth is always going to be there, because all these segments, you have a monopoly. People will travel, but the incremental growth drivers, significant growth driver for this company beyond FY '23.
The Internet ticketing segment, as you yourself mentioned, that it is going to be 82% -- nearly 81%, we have already achieved. So there is going to be some slow motion in that. And in that case, the company is now focusing on the non-convenience fee resources more in addition to the convenience fee resources.
One key driver will be focusing on the other-than-Internet ticketing segment. And in cashing the presence of IRCTC in the Internet and asset monetization, digital asset monetization that we have started, we have floated the tender for that. So we are hoping for some good results, one.
Secondly, we would also be now looking forward, as the growth is concerned, in the tourism sector. In this tourism sector, we have already proliferated. Because of the COVID, we were not running other outbound tools. So this time, we are planning better outbound tools by way of appointing DMCs for all the countries that we would be undertaking, then we would be running many trains in the Bharat segment also, where the turnover is better than the other trains. So that is also going to be a key driver.
And safe dealers, as that you have seen, that after a gap over 2 years, it has not picked up. So we are hoping our signing of MOU with the other states also. So that could be some -- that could be a very good revenues potential in the -- for days to come for IRCTC and increased potential by way of adding new railway plant as I've answered earlier. One more plant in the Kota is going to become.
And by increasing the capacity utilization of these plants further and in infrastructure sector, the retiring room, budget total, because we are going to make -- going to tender out budget totals, on a different rate. The license fee, incremental license fee can be anticipated from that also. So -- and retiring home upgradation is another area where we are focusing and -- but booking where we are really focusing very, very well, and the results are very encouraging. So that -- these are the few incremental growth factors where IRCTC would be now focusing on.
Our next question is from the line of Rahul Jain from Dolat Capital.
Am I audible?
Yes. Yes, Rahul-ji, you are audible.
Yes. Yes...
I can hear other voices at the back also.
Is it any better now?
A little better.
Yes. So congratulations on very strong numbers. I just want to ask 1 question in terms of cost. Can we say that the segmental cost, which we have on the fixed basis, are now back to the normalized run rate basis? And here on, we will see the growth basis cost increase? Or there are certain costs which are yet to go back to the normalized run rate?
I think same rate is going to billed.
Right. And secondly, from the 2S volume, whatever impact which we may see may happen, but what is the impact we may see on the non-ticketing revenue within the Internet ticketing segment? Do you see any correlation to that as well?
Well, some impact in the overall industry has been seen after the things have resumed. Because when the travel happens, the hit on the website increases. So the advertisement potential goes up. So indirect impact will be there, Rahul-ji.
Right. And on this state, so far, we have done very well in this particular quarter. So how is the pipeline looking on this front in the coming quarters?
Rate tiering is a very different kind of a business, where we require a lot of inputs and a lot of point day-to-day interaction with the states. So -- because the money has to come from a welfare scheme, which has to be brought to the common man through IRCTC in the form of services. So it takes time.
If it is approved in a day, the trains start moving, then the revenue comes very fast. So we are in talks with 7 such states. And hopefully, our MOU are going to be signed soon. So once they are signed and the trains are announced, the impact will be seen and the series of the trains will run then. So this year, we are hoping for the good because of our MOU is in the conclusive stage in many states.
Then in the 7, did the -- and you're talking about one which you are contributing to the current quarter?
I will not give out the number, name of the state, because these are the confidential, because many private players also talk to them.
Right, right. And just last question from my side. On the tourism outbound side, have you seen any revenue coming in from that part? Or it is yet to happen given the forward entire [ order ]?
Yes, it just started. Only 3 tools have gone in the outbound because still, the e-visa is not there in many countries. So we have just started. But whatever we have started, that has been sold in full. As now we have appointed DMCs, so we need not do tender again and again.
So we would be doing -- if, like, more and more entry opens, we would be selling it at a faster rate. Although we have also blocked the inventory with the airlines so that we can start in the season. Generally, for outbound tools, November, December is the season when we sell more tools. So -- October also, of course. So we have gathered our resources together, hoping for the EBITDA to start very soon. So let's see. Let's hope for the good.
And last question, any update on the payment gateway initiative you were trying outside IRCTC app?
In this AGM, we are bringing the matter to be included in MOA. After that, we would be submitting our paper to RTI. Without having license for PPI, we cannot go outside, sir.
So first, let us procure the license, and then we will be going out, right, as an aggregator. However, our revenue, as far pay is concerned, this particular quarter, we have done very, very well. And I can -- I'll be happy to share with you that total revenue that we -- total revenue of the IP has been INR 27 crores, out of which I think net revenue of IRCTC has been nearly INR 10.7 crores.
Our next question is from the line of Akshay Bhor from Citadel.
Just wanted to understand, both employee expenses and other expenses have been lower on a sequential basis from Q4 of last year despite the pickup in the activity. Just want to understand what's behind that.
Earlier, in the earlier years, the provision for TRC has been moved. Now we have standardized that, and based on our experience, that this provisioning is not required. When we do more provisioning, it is counted in expenses. So this time, we have reduced that expenses.
All the needs of each and every employee has been covered. So excess provisioning doesn't make any sense, so we have reduced the provisioning for that. That is why you can see the less expenses.
Got it, ma'am. Got it. And ma'am, the run rate for July in terms of Internet ticket booking, can you please share that? Because some of the data shared by railways on passenger has come up in the month of July. Just want to understand from your ticket booking numbers for the run rate.
If you ask me, the number up to June, I have answered. July, I think it is nearly -- it is a little lesser than what we had in the June. Because of the rainy season, the percentage goes down.
Got it, ma'am. Got it. And then...
Let's see. Let's see. You can see, I think...
In lakh, most certainly, it'll be at 11,00,000.
Oh, it's certainly lesser than that.
Okay. Okay. 11,00,000 is what you said, yes? 11,00,000, yes?
But because of the ticket booking, as we know, that we start 120 days earlier. And for festival booking, we have already started. So we can see some changes this month and next month also.
Okay. Okay. Ma'am, so slightly sort of longer-term view from your side on this Internet penetration of 80%, how much can this realistically grow over the next, let's say, 3, 4 years?
See, sir, it is going to grow, but at a slower pace. Not at the same pace that it has grown in the COVID period. In COVID period, people didn't have any other options. But in the offline mode, it's going to be there, some percentage is certainly going to be there, because at remotest locations, we don't have this Internet facility.
And if more trains are there, certainly, we'll get more because our DFCCIL, Dedicated Freight Corridor is there. Many of the good things are going to be diverted on that tool. So the line capacity will be available within the Railway to run more trains. In that case, if more trains are run by India Railway, certainly, we will be a beneficiary in terms of getting more and more bookings. So -- but some offline bookings continue to be there. The growth is going to be there, but we can't certainly say 1%, 1% each year or 2% more than that. So this can happen in this account.
Our last question is from the line of [ Rattan Juneja ] from [ CI Value ].
I would like to know the volume and value of bus ticketing business this quarter? And how do you see it going forward, ma'am?
Well, I'll share some figures with you for a couple. In the year '21, '22, last financial year, our total revenue from the bus booking has been nearly, you can say, 4.95, freer, and out of which IRCTC share was nearly 35 plus or so.
IRCTC shares is in terms of conveniency and certain commission, right? But we have tied up with the, I think, 8 of the state government. And in the first quarter alone, we have been able to earn revenue of INR 4.51 crores, and 32,00,000 is our commissions less convenience fee. So the quantum and the potential in the bus traffic is more.
But the only thing is that we have tied up through an agency. And while the state governments are not tying up, we are also tying up with the state government directly also. So some reservations are there, here and there. But it looks that the potential in this business is going to be good. And our alone convenience fee income can be rise with the better marketing for which we are now going to follow as strategy, along with the best part though.
All right. And second question is what is the percentage of Internet ticketing revenue for the EC class?
Well, in EC, you have 3, 4 classes. You have executed EA class, [Foreign Language], which is 0.03. And in the first day fees, 0.64. Second day fees, 5.83%. And third day fees, 21.76%, and share value is 4.7%. So you can add that to the total amount.
Ladies and gentlemen, that was the last question. I now hand the conference over to Ms. Rajni Hasija, CMD, for closing comments. Please go ahead, ma'am.
Well, as usual, the session has been very interactive, and we hope that IRCTC has been able to answer all your queries and doubts. Although I can only tell you this that this has been the best quarter so far. And my team has done really its best to provide all the -- to make up all the losses, which we could -- we had during the COVID period, because that the industry was suffering with that.
With this note, I hope a very good luck to all of you. I'm wishing you a very happy Independence Day. [Foreign Language] Our AGM is also on falling on 26. So whosoever our shareholders are, I request them to join online. It is going to be through virtual mode. So let's hope for the good and wish you all the bill in the coming season. Thank you very much.
Thank you very much, ma'am. Ladies and gentlemen, on behalf of IDBI Capital, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.