The Indian Railway Catering and Tourism Corporation (IRCTC) reported a net profit of Rs 330 crore in Q1FY26, recording a 7.1% year-over-year (YoY) increase from the same quarter in the previous year. During the company’s earnings call, IRCTC Chairman and Managing Director, Sanjay Jain, attributed this growth to “strong contributions from the Internet Ticketing (IT), Rail Neer, and Tourism segments”.
Further, the company’s Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) grew 5.9% YoY to Rs 397 crore on the back of operational efficiency. Likewise, the revenue from operations rose 4% YoY to Rs 1,160 crore based on growth in the tourism and online ticketing segments.
Why did catering revenue decline?
Speaking of different segments, IRCTC currently provides catering service to 1,295 trains and saw a marginal 2.15% YoY revenue decline to Rs 547 crore in Q1FY26. However, stakeholders questioned this decline despite the presence of levers like the rise of Vande Bharat trains, collaborations with Swiggy and Zomato, etc. Explaining this dip, Jain alluded to the election special trains run by IRCTC last year that generated an enormous amount of revenue: case in point Rs 4-5 crore revenue in Q1FY26, as compared to more than Rs 32 crore generated in Q1FY25.
He also referenced the transition of the Amrit Bharat Station Scheme (ABSS) and its impact on catering revenue. “We are in a transition phase… whereby [the] upgradation of stations [is] taking place. So the static unit on those stations could not generate [a] license fee for this quarter. You can understand a little pain for a final relief. So ultimately [these] ABSS stations, once [they are] put in place, open a very big door for the IRCTC catering business,” Jain remarked. Launched in 2023, the ABSS aims to upgrade 1,275 stations across the Indian Railways network with facilities like free Wi-Fi, executive lounges, etc.
How did Rail Neer perform?
In Q1FY26, IRCTC accrued a revenue of Rs 106 crore from the sale of Rail Neer bottled water, up from Rs 105 crore in the quarter ending June 2024. Notably, analysts also questioned the flat “top line” generated by Rail Neer in the quarter, despite it having the potential to reap benefits of the improved utilisation of 20 of its plants. In response, Jain noted that IRCTC’s capacity utilisation has improved to 87.04% in Q1FY26, up from 86.8% in Q1FY25.
However, he acknowledged three primary issues that contributed to the top line remaining flat-topped:
- Firstly, an issue with the Chhattisgarh Government regarding the extraction of water in the Bilaspur plant.
- Secondly, last year’s election special campaign had a component of Rail Neer, which was absent this time.
- Thirdly, the introduction of a 500 ml bottle for the Vande Bharat train, which, despite the improvement of utilisation, reduced revenue capturing.
Notably, Rail Neer sold 14.12 lakh water bottles per day in…
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