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IRCTC to share 50% convenience fee from ticketing revenue with Railway Ministry

The IRCTC is the only entity authorised by the Indian Railways to provide catering services, online tickets and packaged drinking water at railway stations and inside trains.

The Indian Railway Catering and Tourism Corporation (IRCTC) on Thursday announced that the company will now share half of its revenues earned from convenience fees with the Railway Ministry.

The IRCTC charges a convenience fee on every online booking. This is one of the key revenue for the company, fetching around Rs 620 crore for the Fiscal Year 2020.

Among other details, the IRCTC in today’s regulatory, has informed that the revenue-sharing arrangement would be enforced from November 1.

The Ministry of Railways is scheduled to announce its quarterly results for the second quarter on November 1. In the previous quarter, it had reported a 23% decline in net profit on a year-over-year basis at Rs 103.8 crore. Additionally, revenue had short fallen 41.2% on a year-over-year basis at Rs 338.8 crore.

This was because of the travel ban across the country during lockdowns and Covid second wave. However, the Railway ticketing business grew 9.5% on a year-over-year basis to Rs 212 crore in the March-end quarter.

The IRCTC is the only entity authorised by the Indian Railways to provide catering services, online tickets and packaged drinking water at railway stations and inside trains.

The IRCTC share rallied to a high of around Rs 6,400 on October 19 and then collapsed to below Rs 4,000 over the next couple of trading sessions that led the rumours of the appointment of a regulator for the railways.

With the closing price of Rs 923 after the 5:1 stock split, the stock is still down roughly 30% from its record high on Thursday.

As of 12:16 pm today, the IRCTC shares traded 17% higher at Rs 966, outperforming the Sensex which was down to 15. The company shares were trading up 15% at Rs 938.80 at 11.06 am. At 10.16 am, IRCTC was quoting at Rs 920.00, up to Rs 94.20, or 11.41 percent, on the BSE.

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