IRCTC - How Does This Indian Railway Catering and Tourism Company Make Money?

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by IRCTC.

It can be safe to say, the need for catering services is constant throughout the year. The catering industry provides services to millions of customers worldwide through its variety of channels designed to cater to the customers' needs. Even though event catering is likely the most well-known form of channel, it is not the only one available.

In India, the catering business is tremendously huge and growing. It is not only about weddings and birthdays, but we are talking about the catering services on railways which is also a thing that grabs one's attention.

Nowadays, the Railway catering services are managed by both the government and some private licensed contractors. IRCTC is the largest government-owned catering service in India today.

IRCTC, the short-form of Indian Railways Catering and Tourism Corporation Limited, is a Central Public Sector Enterprise under the Ministry of Railways, Government of India that provides services such as ticketing, catering, and tourism services for the Indian Railways.

The company was founded in 1999 as an extended business of the Indian Railways to look after the catering and hospitality department at railway stations, in general.

In this article, discover all the information about IRCTC, its highlights, startup story, its business and revenue model, challenges faced, and much more.

IRCTC - Company Highlights

IRCTC - About
IRCTC - Industry
IRCTC - Leadership
IRCTC - Startup Story
IRCTC - Mission and Vision
IRCTC - Name, Tagline, and Logo
IRCTC - Business Model
IRCTC - Revenue Model
IRCTC - Challenges Faced
IRCTC - Partnerships and Collaborations
IRCTC - Mergers and Acquisitions
IRCTC - Social Media Presence
IRCTC - Competitors
IRCTC - Awards and Achievements
IRCTC - Future Plans

IRCTC - About

Termed the Mini Ratna (Category-I), IRCTC comes under the ownership of the Central Public Sector Enterprise under the Ministry of Railways, Government of India. The company was incorporated with the aim to take over all the catering and hospitality services at every station, and train by creating low-cost accommodations, unique tour packages, informational and promotional materials, and global reservation systems for the development of local and international tourism in India.

IRCTC has its main administered office in New Delhi along with ten regional offices situated at Lucknow, Chandigarh, Jaipur, Bhopal, Ahmadabad, Guwahati, Bhubaneswar, Patna, Ernakulam, and Bangalore. The tourism and ticketing offices are located in New Delhi.

IRCTC is mainly involved in the following activities:

• Catering and Hospitality
• E-Ticketing
• Travel and Tourism
• Packaged Drinking Water (Rail Neer)

Currently, IRCTC has its operations located in the following manner,

Fourteen Rail Neer manufacturing plants at

• Nangloi (Delhi)
• Danapur (Bihar)
• Palur (Tamil Nadu)
• Ambernath (Maharashtra)
• Amethi (Uttar Pradesh)
• Parassala (Tamil Nadu)
• Bilaspur (Chhatisgarh)
• Hapur (Uttar Pradesh)
• Sanand (Gujarat)
• Mandideep (Madhya Pradesh)
• Jagiroad (Assam)
• Maneri (Madhya Pradesh)
• Nagpur (Maharashtra)
• Sankrail (Kolkata)

Eleven Base Kitchens setups at

• New Delhi
• Howrah
• Ahmedabad
• Patna
• Mumbai Central
• Mumbai CST
• Ballarshah
• Nagpur
• Balasore
• Sealdah
• Kharagpur

Five Zonal Offices at

• New Delhi
• Mumbai
• Kolkata
• Chennai
• Secundrabad

Additionally, IRCTC also has its services extended globally. They provide hassle-free tour packages to foreign destinations like the USA, Australia, Europe, Russia, Nepal, Macau, China, Hong Kong, Dubai, Singapore, Thailand, Malaysia, and Sri Lanka.

IRCTC - Industry

IRCTC belongs to the Catering and Hospitality industry. It was during the 19th century, that the network of railways began in the country. During that period, traveling was slowly picking up pace as many people started to travel from one part of the country to another, who needed food and drinks for the journey.

Ever since then, the catering and hospitality industry is increasing at a significant rate with the increase in travel by many tourists.

Compared to US$28.9 billion in 2018, the Indian tourism and hospitality industry expects to generate US$50.9 billion in traveler exports by 2028.

IRCTC - Leadership

IRCTC is headed by Smt. Rajni Hasija. She is the Chairman and MD at IRCTC.

Smt. Rajni Hasija

Smt. Rajni Hasija is a science scholar with an M.Phil from Delhi University. A postgraduate in Human Resource Management and a degree in Law, Smt. Rajni Hasija is the whole-time Director of Tourism & Marketing at IRCTC. Along with this role, she also happens to be the Chairman and Managing Director at IRCTC.

Smt. Hasija has over 29 years of experience in Indian Railways and has also worked in many managerial capacities as well as various public sector undertakings. She played a pioneering role in the creation and growth of the railroads' www.irctc.co.in website for online ticketing facilities.

Smt. Hasija has also successfully completed many time-constrained projects for IRCTC, ranging from planning and executing the dynamic online cum counter ticketing platform for the Commonwealth Games 2010 to international marketing of the Maharajas' Express Luxury Tourist Train.

She was able to pull this off because of her strong technical knowledge, organising and planning skills, and ability to communicate with her peers and team.

IRCTC - Startup Story

The story of IRCTC began in 1999 when the company was incorporated with the aim of the Ministry of Railways. IRCTC was initially entirely owned by the Government of India, but in 2019 it has been listed on the National Stock Exchange, with the Government still maintaining majority ownership. The government owns about 67% of ownership in IRCTC.

IRCTC is the only enterprise that is authorised to supply specific services to the Indian Railways. They are allowed to offer services such as online ticket booking, catering, and selling of packaged drinking water on trains and at railway stations. It was classified as a Mini Ratna public corporation in May 2008, which gave it some monetary independence.

IRCTC - Mission and Vision

Being in the catering and hospitality industry, IRCTC has developed many CSR activities.

They truly believe in doing for the society, for which their CSR vision is, "To be the leading provider of high-quality travel, tourism, and hospitality related services, for a range of customer segments, with consistently high level of customer satisfaction.”

IRCTC - Name, Tagline, and Logo

IRCTC means the Indian Railway Catering and Tourism Corporation Limited. The name rightly tells us the work they do that is providing catering and hospitality services to every railway station across India.

The tagline of IRCTC says, "Lifeline of the nation"

The logo of the IRCTC displays a combination of blue and grey symbols, which means pan-India connectivity of railway networks.

IRCTC - Business Model

IRCTC business is divided into four main services  - hospitality and catering, online ticket booking for flights, trains, and buses, tour packages for both national and international places, and providing packaged drinking water under the label Rail Neer.

Here's an in-depth dig into the business operations of IRCTC:

IRCTC boasts of being one of the largest hospitality and catering companies in the county. The catering business of IRCTC scatters across every passenger train in India, railway stations, and in and around the station premises.

The hospitality and catering business is split into three parts:

Mobile Catering Business

IRCTC oversees all of the Indian Railways' onboard catering operations in more than 460 passenger trains with pantry cars, including the Rajdhani, Shatabdi, Duronto, Gatimaan Express, Mail/Express, and recently introduced Vande Bharat Express, and Tejas Trains.

In all of these trains, the pantry carriages are installed from which they get their onboard catering services.

Other Catering Services (OCS)

Under this service, its business is divided into two categories:

Static Catering Businesses

Under this business, IRCTC has static catering businesses as well. It's amusing to know that IRCTC also indulges in managing Train side vending (TSV) on Mail/Express and Superfast trains that do not have the option of pantry cars.

With the help of TSVs, the onboard merchants take orders from the customers who have been offered with the menu chart. After the prescribed order is confirmed, the food is then picked up by vendors at the designated "meal pick-up places",  and it is then given to the passengers.

Base Kitchens

Another static business of IRCTC is Base Kitchens. The Ministry of Railways upgraded a total of 46 base kitchens with the object of producing high-quality meals for every one of its customers on trains.

These kitchens are in process and will be equipped with modern technology. Furthermore, the Ministry of Railways is soon going to activate CCTC cameras for live streaming in the public domain along with QR code facilities on meal packets.

Besides these two static businesses, IRCTC is also involved in other ancillary business activities. They have Food Plazas, fast food units, cell kitchens, and refreshment rooms.

Other Hospitality Businesses

IRCTC has also introduced other hospitality businesses like:

Executive Lounge

The idea is to provide and cater to the demands of the mid-segment and high-end passengers. It wanted to build a comfortable place inside the railway stations to dining in hygienic surroundings. The company took inspiration from airport lounges, it has already opened eight Executive Lounges in the Railway Stations mainly at the New Delhi (Paharganj Side & Ajmeri Gate side), Agra Cantt, Jaipur, Ahmedabad, Madurai, Sealdah, and Varanasi. Some of the other facilities provided at these lounges are wifi services, reclining sofas to relax, shower facilities, etc.

Retiring Rooms

IRCTC has already established retiring rooms at 19 railway stations. Furthermore, there are many rooms, which are under construction right now. The concept of these rooms is to enhance the accommodation facilities for the travelling passengers.

Rail Yatri Niwas/BNR hotels

At present, there are two Rail Yatri Niwas at New Delhi and Howrah railway stations and two BNR Hotels at Puri, Odisha, and Ranchi, Jharkhand.

E-catering Business

The most recent expansion of IRCTC's catering and hospitality operations is E-Catering. This new business by the company is a combination of technology and cuisine.

With the help of a smartphone application, customers can order food from participating restaurants and food outlets using this internet-based service while riding a train. The passengers' seats or berths are where food is delivered. To enjoy the service, customers have to book in advance.

Online ticket or Internet Ticketing

IRCTC launched its internet ticketing facility in 2002, and ever since then, IRCTC has made the lives of many travellers easy and convenient.

As per data and survey, there have been 15.88 lakh e-tickets booked as of 21st March 2022.

This proves that the company has emerged as one of the largest e-commerce websites not in India but also in Aisa Pacific.

Tourism business

Apart from just catering and hospitality business, IRCTC has put its benchmark in the tourism department as well. The company has played a majestic role in the development of rail tourism in India.

With its website www.irctctourism.com, the company offers a myriad of options Rail based Packages, Hotels, and Railway Retiring Rooms to provide the users with a one-stop solution to all their travel needs.

By 2015, IRCTC started giving tour packages that include flight booking, hotel accommodation, sightseeing, etc. These packages are meant for both national and international trips.

One of the most unique services provided by IRCTC is the Land Packages. These packages are meant for those customers who are interested in visiting temples for darshans, more commonly for teertha darshan.

It also offers air ticketing, and bus ticketing and has now also ventured into cruise bookings targeting both domestic and international markets.

Packaged Drinking Water

Another major business of IRCTC is manufacturing packaged drinking water known as Rail Neer. Rail Neer is the company's own branded packaged drinking water.

Presently, the company has fourteen operational manufacturing plants of Rail Neer. These are located at Nangloi, Danapur, Palur, Ambernath, Amethi, Parassala, Bilaspur, Sanand, Hapur, Mandideep, Nagpur, Jagiroad, Maneri, and Sankrail. In addition to this, the company is planning to set up six other plants to increase the production capacity of 18.40 lakh bottles per day in FY 2021-22.

IRCTC - Revenue Model

IRCTC's most of its earnings are through its internet ticketing facility. The company has reported that a total amount of Rs. 38178.32 crores was collected as ticket fare from the users of E-ticketing during the year 2021-22. It has also been shared by IRCTC that the total number of tickets booked was 4174.49 Lakhs, which is 140% of the previous year.

IRCTC gets 63% from e-ticketing, 22% from the catering business, 8% from Rail Neer, 7% from tourism, and the rest from State teertha.

IRCTC - Challenges Faced

In 2016, there was a case against the IRCTC by the Mumbai police for not maintaining its customers' data. The allegation was that the company was involved in leaking the private data of its 10 million customers.

The company also faced criticism that there were data breaches and exposures, and there are worries that the government may have utilised passenger information to transmit targeted advertisements.

Another challenge faced by IRCTC was during the 2020–2021 Indian farmers' protests. The company was criticised for sending emails without its customer's content.

The email advertised the benefits of government policies to Sikh farmers who are protesting under the subject "PM Modi and his government’s special relationship with Sikhs". Later, it was found that these emails were sent to promote government messages.

IRCTC - Partnerships and Collaborations

Earlier this year, IRCTC announced that it has partnered with Paytm to digitise its ticketing system for customers through its Automatic Ticket Vending Machines (ATVM) installed at every railway station. Its online ticketing system now has QR code digital payment solutions.

On 21 February 2022, IRCTC collaborated with the Bank of Baroda to launch  IRCTC BOB Loyalty Cobranded Credit Card on the RuPay platform.

Previously, it has also collaborated with SBI to come up with a travel credit card called IRCTC Rupay SBI card. The credit card gives access to various benefits like railway lounges, travel offers, rewards, and many other benefits.

IRCTC - Mergers and Acquisitions

As per sources, the Central government is planning to merge the six public sector undertakings (PSUs) by the end of 2023.

The companies which are likely to be merged are Rail Vikas Nigam Limited (RVNL) with Indian Railway Construction Limited (IRCON), RailTel Corporation with Indian Railway Catering and Tourism Corporation (IRCTC), and Braithwaite and Co Limited with Rail India Technical and Economic Services (RITES).

The Ministry of Railways hopes to get better funding and boost the overall value of these PSUs with this merge.

IRCTC - Social Media Presence

The IRCTC does strong advertising and branding on its social media profiles. The company does seem to be quite active on its social media channels by posting various interactive and informative posts regarding its services.

You can follow the company for its latest updates on its Facebook, Twitter, and LinkedIn page.

IRCTC - Competitors

The tourism and hospitality sectors are swarming in the Indian market, which of course, gives rise to tough competition between these companies. IRCTC is not alone in the catering business, many other companies give a tough fight. IRCTC competes with the following companies:

• Interglobe Aviat
• Delhivery
• Indian Hotels Co.
• Blue Dart Expres.
• Devyani International Ltd.
• Easy Trip planners Ltd.
• Westlife Development Ltd.
• Sapphire Foods
• TCI Express
• Chalet Hotels
• Restuarant Brand
• Lemon Tree Hotel
• NIIT
• Mahindra Holiday
• Thomas Cook
• ITDC
• SpiceJet

IRCTC - Awards and Achievements

Throughout its journey, IRCTC has come a long way in receiving many achievements or milestones to take its catering and tourism services to newer heights.

Some of the achievements of IRCTC are:

• IRCTC launched a new e-Ticketing Website & Mobile App for the booking of online Railway Ticket (2020)
• A payment wallet named iMudra provides an easy way to book railway tickets, and pay, send or withdraw money. (launched in 2019)
• Launched the first semi-private Train ''Kashi Mahakaal' inaugurated by Prime Minister Narendra Modi (2020)
• Launched second semi-private train ''Tejas'' between Mumbai and Ahmedabad (2020)
• Launched Tejas Express from Mumbai CST to Karmali, Goa (2017)

IRCTC - Future Plans

IRCTC has shown great results in the stock market. Many experts believe that the company is planning to grow exponentially. It is expected that stocks would grow from Rs 3,000 to Rs 5,000 stock level. As of 2021, the market capitalisation of IRCTC is Rs63,726 crore.

From the looks of this tremendous growth, the future of IRCTC seems bright. It is also assumed that with the rise of internet usage, the company will see a growth in its online ticketing business at a CAGR of 17% in the coming years.

FAQs

What is the revenue of IRCTC?

The revenue of IRCTC was $300 million as of 2020.

When was IRCTC founded?

IRCTC was founded on 18 February 1905.