“As passenger train services are suspended until 12 August 2020 and traffic growth will be lower in the initial few months after operations resume, we expect H1FY21 (April-September 2020) to be a complete wash out,” Jinesh Joshi, analyst at Prabhudas Lilladher said in his note.
Given the rising number of Covid-19 cases, there is scepticism about when passenger trains would resume their operations.
Further, many analysts believe that people would continue to avoid eating outside/street food even after the lockdown is entirely lifted and passenger movement is allowed. As a result, recovery would be tougher for IRCTC’s catering business, which, along with Rail Neer (packaged drinking water), accounted for over 55 per cent of its revenue in FY20.
In Q4 of FY20, while catering business was down 20 per cent year-on-year (YoY), most other segments, including internet ticketing and Rail Neer, reported a growth.
Absence of convenience fee on e-ticketing in the base quarter led to about a three-fold jump in its high-margin internet ticketing business and also improved overall profitability. IRCTC’s total revenue and profit before tax was up 18 per cent and 113 per cent YoY to Rs 586.9 crore and Rs 208.6 crore, respectively.
However, the figures for at least the first few quarters of 2020-21 may be visibly different.