The Indian Railways Catering and Tourism Corporation (IRCTC) known primarily for online train ticket booking, is probably the only public sector enterprise to have tied up with several new economy firms.
After e-tickets, e-catering, and tie-ups with e-commerce websites, the company is now exploring other avenues of revenue such as delivery of flowers and sweets to passengers on trains, IRCTC Chairman and Managing Director AK Manocha told BusinessLine.
E-ticketing contributes the most to the company’s margins, followed by tourism. Catering, which is a loss-making division, can move to being in the green with a boost from e-catering.
E-ticketing now accounts for only 54 per cent of the total reserved tickets, showing good scope for growth. The risk to this stream of business is a change in the sharing of service charge between Railways and IRCTC.
For instance, from a revenue share of 20:80 between Railways and IRCTC earlier, it has changed to 50:50 this year. But, from April 1, 2015, the e-ticket service charge has risen to ₹20 and ₹40 for non-AC and AC tickets from ₹10 and ₹20 respectively last year. For the IRCTC, the long-term risk is if the Railways were to permit other players to access the passenger reservation system directly, and also a shift away from trains as a mode of transport.
This is another stream of business that will add to IRCTC’s profits. The machines make available potable water that meet WHO standards for ₹1-5 depending on quantity, Manocha said. IRCTC will have 1,200-1,400 water-vending machines by March 2016. The capacity of Rail Neer, the bottled water business of IRCTC is getting fully absorbed now, although it faces competition from players in the unorganised sector who provide bottled water to railways.
IRCTC is expanding its e-catering business, a segment that adds to the margins, as it is paid a service charge for each delivery made.
“We are now getting about 500 orders a day from e-catering. At times it touches 800, particularly when there are groups travelling for occasions such as marriages,” said Manocha, adding that they would soon be tying up with Haldiram’s and Bittu Tikki Wala. Currently, food from Domino’s Pizza, KFC, Biryani Bhai, Copper Chimney, Curry Kitchen, Masala Kitchen, Desi Treat and Cafe Chino and almost 1,000-odd outlets listed on Foodpanda are delivered to passengers who order them.
The tourism segment, which is already profit-making, and runs Maharaja Express, has introduced shorter desert heritage trips with an aim to add to the growth.