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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Q2 FY '22 Earnings Conference Call of Indian Railway Catering and Tourism Corporation Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Devang Bhatt from IDBI Capital. Thank you, and over to you, sir.
Thanks, Lisan. Good evening, everyone. On behalf of IDBI Capital, I welcome you to the Q2 FY '22 earnings call of Indian Railway Catering and Tourism Corporation, or IRCTC. On behalf of IDBI Capital, I thank the management for giving us the opportunity to host the call. We have with us the management represented by Ms. Rajni Hasija, CMD; and Mr. Ajit Kumar, Director, Finance and CFO. I would now like to hand over the call to the management for opening remarks. And later, we can open the floor for Q&A. Thank you, and over to you, Rajni ma'am.
So very good evening to everyone. I welcome you all to this con call of IRCTC Limited for the quarter that has ended on 30th September 2021. I hope that you and your dear ones are safe. And I also wish a very happy Diwali and a healthy and a prosperous year for everyone. Now as we start discussing about the results of the quarter 2 of the financial year 2022. The quarter has really seen some moderation in infections and continued momentum in the vaccination, which has been positive in the travel and hospitality industry, which has started reviving now. Further, this places the industry in a very good position going into the festive season through the -- though the risk of the third wave is still not completely behind. Earlier today, IRCTC has announced its financial results for the quarter and a half early ended on September 2021. And the same has been disclosed on both exchanges, too. I can first give a brief overview of this quarter. Results both which we shall be taking up the questions and answering them well on behalf of management. In this quarter, that is quarter 2 for the financial year '22, IRCTC yet again demonstrated a resilient business model and has been able to significantly improve its operational performances. While normalization in the catering and the packaging drinking water and the tourism is still going to take some more time, Internet Ticketing has not been able to surpass its performance in the pre-COVID period. But in fact, in this quarter, that is quarter 2 of the financial year '22, has been the best ever quarter for this segment. So I congratulate all participants in this. On a consolidated basis, quarter 2 financial year '22 revenue came at around INR 404.9 crores, seeing a strong growth from quarter 1 with the revenue was only INR 243.4 crores. So there is a significant improvement quarter-to-quarter given that the quarter 2 of the financial year '21 had the impact of pandemic. EBITDA on absolute basis was at INR 211.5 crores in the quarter 2 of fiscal '22 which is much higher than INR 111.5 crores in the previous quarter. And against a loss of INR 5.6 crores in the quarter 2, which for the previous year, if we exclude the other income. Similarly, EPS of 9.9 grew from INR 5.2 regarding fund structure on quarter-to-quarter and against a minor loss year-over-year. Importantly, both EBITDA and earnings per share in this quarter, that is in the quarter 2 of the financial year '22 has been higher than that in the quarter 4 of the financial year fiscal year '20 level as well. With the resilient performance in this quarter, gradual opening up of the economy and the festive season vaccination happening, I believe that IRCTC is placed very well to continue to demonstrate improvement in other operational areas and the performance is going to be better. I shall now hand over the call to my colleague and our CFO, Sri Ajit Kumar, to brief you on the financial and segmental performance of the company. Thank you very much.
Good evening, everybody. And such a greetings to you and your dear ones. To first give a brief overview about Q1 FY '22 results, post which we can have the question and answer session. Q2 FY '22 revenue saw a soft improvement, both on quarter-on-quarter and year-on-year basis. The revenue of INR 404 crores, grew by 66.4% quarter-on-quarter and by 3.6x year-on-year, given that Q2 FY '21 has the impact of the pandemic. Given that Internet Ticketing continued to drive the growth. As you know, it has the highest margins amongst the business segment. The EBITDA margin continued to make a new high and crossed the 50% mark, and was at 52.2% versus 45.8% quarter-on-quarter. And compared to a minor loss in Q2 FY '21, if we exclude the other income. Let us now move to the business segments of the company, the first one Internet Ticketing. This segment continues with the more resilient business segment. Q2 FY '22 revenue Internet Ticketing was at all-time high at INR 265.3 crores, growing by 77% quarter-on-quarter and significantly higher than INR 58.3 crores in Q2 FY '21. The growth was driven by both the growth and ticketing volume and none service charge revenue. EBITDA probably moved back from 80% and was at 83.1% versus 77.9% quarter-on-quarter and 58% year-on-year basis. The Catering segment has maintained a declining trend in EBITDA loss. For Q2 FY '22, that segment reported a very minor loss of just INR 15 lakhs versus INR 4.7 crores in Q1 FY '22, a loss of INR 33 crores in Q2 FY '21. Rajni has also maintained the momentum in improvement revenue and EBITDA. The Q2 FY '22 revenue for the segment grew by 41% quarter-on-quarter to INR 41.2 crores and against INR 9.2 crores in Q2 FY '21. EBIT margin improved to 6.8% for Q2 FY '22 versus 6.2% quarter-on-quarter and a loss in Q2 FY '21. The Tourism segment, which has been the most hit by the pandemic, for us the entire industry. This continue to see neutral revenue and mix loss is at an EBIT level. The cash and bank balance is network for the company as of the end of Q2 FY '22 is INR 1,945 crores and INR 1,600 crores, respectively. That brings to the end of this opening remarks. Now we can move to the question-and-answer session.
[Operator Instructions] The first question is from the line of Jinesh Joshi from Prabhudas Lilladher Pvt Ltd.
I just had one hypothetical question I mean, if we assume that the decision to share the convenience fee had not been withdrawn, what recourse would we have taken? I mean, I want to understand do we have the autonomy to take price hike or charge on a per passenger basis. So just wanted your thoughts on that.
Shall I answer now? Or you have something more to ask, sir?
I have a follow-up, but I'll ask that after you answer this question.
Yes, let me handle the first one. It is good in the interest of IRCTC that the decision of the sharing of the revenue of convenience fee has been withdrawn. But had it not been withdrawn, what we would have done? As we have been mentioning in various con calls that IRCTC has been given a liberty to decide it, convenience fee, the amount that can be charged. That amount in various conferences, investor needs to also be -- investors have been projecting. But why not charge per passenger. At that time, management has been answering, let's not be that greedy. Secondly, we have also been given some dispensation to the UPI. We are -- almost 30% transactions are getting -- we are getting less of the convenience fee. So had the decision not been withdrawn, certainly we would have worked on those lines. And for that, we needed to have a full Board and a lot many decisions to be taken, which would have taken some time at least. So that forum was open for us for which we had already started working. The management had already started working on those lines. So that alternative was available with us. But at the same time, you never know how this is going to take a view. Because ultimately, this was to be decided by a BOD, Board of Directors. So where various schools, thought of schools are there. So this was option available for IRCTC. We were left with that option either to increase the license fee. Actually, withdrawing benefits to [indiscernible] we can't dream of because it is our own indigenous product and we work in Atmanirbhar Bharat. Or we would have worked intensified other resources which we are already doing that you know that our dependency on the convenience fee resources is gradually, gradually improving. And our revenue from the non-convenience fees is also increasing. So our focus is already there on that. So such decisions don't impact destiny of the company. I think I've been able to answer, sir, your question.
Yes, madam. Just one last quick from my side. There have been some media reports which say that mandatory reservation facility in the general compartments, which was implemented during COVID may not sustain completely and some rollback may happen. For instance, in 23 special trains, this reservation norm is not applicable. So do you expect a full rollback sometime around in the near future?
I cannot comment upon that, but that this is inventory of Ministry of Railways. But if they are converted, general inventory into the second desk, they are also gaining out of that. So I cannot comment upon the decision to be taken by Ministry of Railways. In the COVID time, they have done that. But after COVID when everything normalizes, whether they are going to retain this or not, we don't know. We are not -- we cannot comment at this juncture. However, I can tell you that around 40% of our reservation is coming. The excess reservation is coming. Normally, we used to book around 8.5 lakhs tickets in a day. As of now, our average ticket is around 12.5 lakhs. That is an add-on inventory that we have got because of this booking. So that add-on may not be there in case the ministry would like to withdraw that. But the initial for which we have projected, which was projected in our DFRC document also, that 8.5 lakh tickets are going to be booked. There is some increment after we had released that and from 71% of railway bookings, now we reached around 81% of bookings. And if improvement is still there and people are diverting from off-line to online and the more and more digital transactions are happening in the country, is also a hard fact which we should not forget before making any decision in this.
The next question is from the line of Nitin Gosar from Invesco Mutual Fund.
The question is also, again, on the similar lines on which the earlier participant asked. Can you help us understand what was Indian Railway or Government of India thinking while they were evaluating this proposal of 50% sharing of convenience fees.
Nitin ji, I may not be the right person to answer these questions.
I take your point, ma'am. Is this deferment of proposal to ask for 50% of convenience fee deferred on a permanent basis? Or how should we see this as an act?
Letter received by us, looks can we read like that, can withdrawn.
Okay. Got it. And on this second class, which has now become a part of the reserve category inventories. How should we see this going forward? This will stay or the normalization will come into picture and we'll start losing on that 4 lakh inventory that has got created additional?
Sir, it is very difficult for me to handle this because this inventory belongs to Ministry of Railways where the general category has been converted into the reserve category. Since the people are opting for, it means people have not denied it. And there is a comfort zone also involved in that. Earlier, they were going with the lot of uncertainty by converting this the certainty amongst the people has also been created. There are going to be a few takers who would like to continue in that. There may be a few takers who would like to have a general inventory. So perhaps -- at this answer this question cannot be answered by IRCTC. This is an excess rain that we could capture. And we could provide the environment and could make some good losses come across by facilitating those customers and providing them the inventory, maintaining the balance towards sector so that this booking doesn't go away, and we are able to tap in the form of a convenience fee to this.
Fair point, ma'am. Just a clarification. So today, we have an inventory available of 12.5 lakh per day.
We have been able to book 12.5 lakh tickets per day. Normally inventory in the reserve segment is 8.5 lakh ticket in a day. And average size in one ticket is around 1.7 these days. Earlier it used to be 1.9, but after COVID, it is 1.7, sir.
Got it. And for the quarter, what would have been the inventory -- sorry, ticket booking or P&R booking for the quarter.
Yes, yes, yes, I'll give you the figure. In the quarter 2, the total ticket booked was around 11 crores -- 11.22 lakhs nearly. Nearly around -- average will be around 3.7 crores, you can take it at 3.7 crores. And the passenger travel in the ratio of 1.7.
Got it. And one last bit. On UPI, you mentioned that we are right now not asking for any kind of additional charge...
No, we -- I did not say this. I said...
Sorry, my reading was bad then.
For UPI instead of INR 15, we charged INR 10 in sleeper class. And in AC segment, instead of INR 30, we charged INR 20 in the case of AC class. So that is to promote Atmanirbhar Bharat and promote digital payments in India. Because we are a big gainer of the digitization. Operator, is it disconnected? Can we have the next question, please. Can we have next question, please. [Foreign Language] [Technical Difficulty] She is back.
The next question is from the line of Rahul Jain from Dolat Capital.
Yes. I have a question. That we have seen this massive strength in our stock prices, which I would claim to the investor community, but part of the issue on account of the input coming from railway, government of India on various elements such as convenience fee sharing and maybe merger with CRIS and RailTel those kind of event.While I can understand your limitation, but what I essentially want to convey or request is that there has to be a faster and frequent communication or clarification to avoid scope for such speculation because essentially, the business has a lot of dependency on railway and what can, kind of, give us comfort that if such event happen, how we would be able to safeguard interest of the minority shareholder?
So the confidence which I can give, I think, IRCTC can provide through its operating performances. But since most of our business are railway dependent. So railway as a policy maker decide something and IRCTC as a follower as an extended arm of railways implement that. Normally, we discuss with each other rather this discussion is happening very frequently on daily basis on all the subjects. So these are not that -- issues are not discussed among each other -- with each other. But whereas there has been few gaps in the past. But I cannot really say that [Foreign Language] that the people don't discuss on such kind of decisions are taken. Your discussion point has been noted, and we will also try to communicate to our ministry that investor is worried about that. An investor would like to have more confidence if this kind of a dialogue happens again and again, we'll certainly communicate the Ministry of Railways. This we have done also.
Right. And what happens to some of the segments where we are getting immensely benefited because a part of the railway ecosystem, but there is no revenue arrangement. I can understand in the ticketing, they have shown their interest, but of course, it has been withdrawn.And in catering business, we are already doing it. In tourism, we pay whatever how they charge and everything which is required. But in the Rail Neer business, again, there is no sharing as such. So what happens in case something of that sort is considered in that kind of a business at a later point of the time? And also, as you rightly said, what could you might have done in such an event in terms of pricing increase or UPI abolish -- discount abolishing? But does that also somewhere imply that if we do a pricing hike in future, it may happen that it may come along with sharing with the railway. So eventually, the benefit to the minority would not be any different.
One is securing the interest of minority. Second is handling the expenses of IRCTC. The representation with IRCTC made to Ministry of Railways was on the basis of -- one is, of course, was the investor intrust. And secondly, the expenditure that IRCTC would like to do in upgradation of the site. Because there are many things which we require to maintain this website. And the infrastructure requirement is huge. So while railway has given us this work. So railway has also saved, it's 80% inventory is being booked through IRCTC for booking one ticket, railway might be spending -- this was a very old calculation, I have more were than INR 60 railway was spending for booking one ticket. If the same work has been given to IRCTC, so you can calculate the amount of a saving, which repairs us. It is the digitization that has really helped and infrastructure placed by IRCTC and the experience of IRCTC in the last 20 years that has helped in maintaining this infrastructure in a very conservative manner. So if, suppose, we increase the price, and there can be a sharing with the railways. So I don't think so this can be discussed at this juncture, there has to be a lot of deliberations on this subsequently with the ministry. And we would like there to discuss infra. In any case, we would be requiring funds for maintaining our infrastructure. And we would also be requiring a lot of floor to handle such huge booking. And some other arrangements for upgrading the size, and making the deal size, et cetera, handling all the risks involved in the business. There are risks because -- as we know, there are no transaction charges in the case of our debit card, in the case of a payment, which are less than INR 2,000. So all there we were earlier earning in the non-convenience fee sources, they are not there. So these things are happening. The industry is changing. Till the industry is changing, the flow of revenue that is coming to IRCTC is helping in the handholding in the other segments. There was a time when this money was taken away in 2016/'17 at the time of a demonetization. At that time, catering helped. During COVID, Catering and Rail Neer were not there, so Internet Ticketing helped. That is what the resilient business model IRCTC has. Our growth is not only vertical, it is actually horizontal. The more domain we add so that we can cover the losses of the other segment. And together, as we come up as a great strength.
Right. And in the Catering and the Tourism business, if you could share your thoughts in terms of when we expect the revenue getting aligned in the Catering segment with the passenger traffic, you're seeing this license fee run rate is quite low compared to the normalized run rate. And also similarly on the Tourism business, our losses have widened in this segment in this quarter, which is a bit surprising because we are seeing the general tourism and hospitality across BSF seen a massive improvement. So when we could see this in our numbers as well?
In the Tourism, our losses have widened as compared to the previous quarter. There was a reason because the earning of the revenue -- Tejas is being added into it. And there is some revision in the Tejas policy for which we have requested Railway Board to reconfigure. The haulage pattern of the Tejas has been changed. And for which we have already requested Railway Board to reconsider. So that our -- these losses can be curtailed. And we can at least break even. In spite of the festive bookings, we are not able to make good of the losses done previously. Secondly, we have also raised certain issues of departing the benefit of the force majeure during the period when the train was not running. These are the few issues which we have discussed with Ministry of Railways. Because of those losses being added in the Tourism, otherwise, if you -- other than Tejas, you talk about that Tourism is in profits. So these -- we are taking a concrete decision on the Tejas. And let us see, we are hopeful that we'll get some residue out of that. If we are not, then we'll take a tough decision in this section. Rather we'll be constrained to take a tough decision.
And this would be like reducing the frequency, increasing the price?
We will try to -- we will try -- many such things are there. We'll either increase price or we'll decrease the frequency or curtail our own expenses, do the retendering so that we are -- or increase the non-clear revenue which we have already done. Money for that is yet to be taken. So we will try hard so that our this segment also makes up the profit. Otherwise, hardcore tourism it's in profit.
And catering, why it is still.
My answer to my second question is your first question will be that catering we have already raised the matter to Ministry of Railways and they are taking some time for examination. Perhaps they're waiting for this festival period. The festival period you might have seen the crowding everwhere. Last year, when -- in the month of April, May, the second wave cropped in after the festival period only. So people are just waiting. Let's hope for the good. We have already reminded Railway Board even today also.
Right. But this is -- actually the issue is that...
Sorry, to interrupt Mr. Jain...
This is follow-up, please let me -- allow me. So ma'am, the thing is that as you just answered to some of this question, that we are -- you said there is a haulage price increase in the case of Tejas, which has resulted into despite higher volumes, we incurring losses in that business. Again, the single point impact is the change in policy by the railway.Similarly, in catering also, we are not able to cope it up with the relevant traffic-based revenue because the RT is being imposed by The Railways. So I'm not saying that they are trying to do something which is not in the best interest of the shareholders. But of course, the decision making for us actually lies well beyond the conventional thought process of the Board sitting at the IRCTC or they have their own limitations to that. So that is the big question out here that we are doing fabulously where as an organization, but how we will be able to deal with such risk because we are not able to address the issue, which we actually have just because it is -- the call has been short at some other places.
Let's go to the root cause of this. Why ministry had to withdraw the catering? Ministry was -- had to take a tough call because there was COVID and there were many contact points. And railway never wanted to be party in front of COVID. This was a tough decision, no organization -- we are losing. Then railway is losing, equally losing because distribution of the rate -- revenue is also there. 45% of our share goes to Ministry of Railways in this. So they are losers, they have forgone their INR 700 crores in that. If you recall our previous discussions that we used to do in the year '19/'20, that in the year 2021, our revenue from the catering should have been around INR 1,500 crores, out of which, 45% around INR 700 crores would have gone to Railways. So Railway also has forgone their revenue in the interest of the nation, which saved our life. The tough decision at times are taken to take care of better -- to get a better deal. And life saving -- nothing can be better than saving a life.
The next question is from the line Shyam Sundar Sriram from Sundaram Mutual Fund.
My first question is what is the basis for this revenue sharing with Indian railways. Is there any underlying economic logic to share? That is the first part of the question. Secondly, now IRCTC also worked with many OTA agents as well where the agent charges an additional convenience fee and there is a revenue share with IRCTC as well. Is this also decided by Indian Railways or is this decided by the IRCTC Board per se. So tomorrow Indian Railways decides to change that also, is that something that is possible, if Railways decides to change your terms of agreement with your OTA agents. So those are the 2 questions.
Well, I would like to answer your second question first as compared to the first. Like the Ministry of Railways has already decided that the agent can charge INR 10 and INR 20 per ticket. That is already decided. And in that if the OTA is there, TT, he cannot charge, a fee cannot be more than that. But however, the IRCTC takes an additional money from him in the form of INR 12. That is a decision of OTA. The agreement to appoint OTA is done between IRCTC and OTA. So ministry does not have any access to that. However...
If the ministry decides the agent charges, how much they have...
[Foreign Language] that is continuing for all B2B and all B2C. Any kind of a agent can charge only this much INR 20, INR 40. INR 20, INR 40, they can charge. So [Foreign Language] that is being done by them. And over and above what OTA policy has, what is B2B, what is B2C, how the rail RTAs will be there, and how the GSA will be appointed? It's all decisions, internal decision of IRCTC management. And you said what has been the logic behind that? Well, I've already answered that my answer remains the same. That ministry has decided that. Ministry has withdrawn IRCTC is not in position to comment.
No, ma'am. I was just trying to understand is there any economic logic in terms of -- because we use by -- Indian railways are back-end reservation. So is there any sort of economic or a logic for IRCTC...
Our understanding that ministry has saved a lot of money by doing the online reservation. If the work is being not looked after by them, IRCTC is also incurring a lot of expenditure in maintaining that infrastructure. And we need to upgrade that. And this is that we have already been telling to our investors all the time. Again, it is a continuous process. We have already given many of -- we have already awarded many contracts for upgrading our infrastructure.
Understood ma'am. Ma'am can I ask one more question. You said the IRCTC has the -- where we saw the freedom to raise the convenience fees. Now what factors that you will consider that we go into, whether you have to raise the convenience fees as in, is it a simple like services inflation per se? Or what will you consider?
Yes. Yes, sir. Yes, sir. Please complete your question.
Yes, ma'am, that is my question.
See, there are many factors. When we will increase our license fee, first, our expenditure becomes so much that we are not able to handle our expenditure under arrears. The revenue that we received from the convenience fee is lesser than that. As of now, we are able to handle, so we don't want to put any burden on the customer. At the same time, we have to look the overall interest of the country that is in the form of promoting the Atmanirbhar Bharat concept and creating our own gateway, et cetera. So as long as we are able to handle it well and add to good amount of revenue to our company, getting good profit, I don't think the there is any need for the management to increase the convenience fees. If there is some shortage, then management will take a call.
The next question is from the line of Urmil Shah from Haitong Securities.
I'll maybe try and channelize the discussion on the positives. So if we look at the Internet Ticketing segment, ma'am in this quarter, it appears that not only the volume-based benefit has enabled us to do all-time high revenue. But even the non-service charge revenue has touched all-time high, as regards to quarterly run rate. If you could throw light on the same. And also, how should we look at it over the next couple of years?
Well, I can tell you that the convenience fee of this quarter 2 has been around INR 299 crores. Quarter 2, it is. Just wait one moment.
Convenience fee is...
[Foreign Language] In the first half year, our total fees has been INR 289 crores. That is in the first half, out of which INR 104 crores in the first quarter and INR 185 crores in this quarter. Non-convenience fees, earlier we have INR 46 crores, now we have INR 80 cores. Out of it, I can give you the sharing. All the time, investors have been asking why the advertisement revenue from our side has been less. Let me tell you with the great pride at this time our INR 20 crores almost we have received through advertisements. So where we have been able to tap government -- good government ads for our portal. Then commission also has seen some very high because the overall ticketing has been high so the commission has been in the Q2 3 segments. And AMC also, our AMC fees has also increased. So all segments, except for the SBI, where our offer was there that we will not charge revenue to some -- has shown some improvement. So this -- the convenience -- our focus is convenience fees, yes, we have to have. We have to tap that. But at the same time, we need to increase our non-convenience fee resources. So this is a positive side. And there is non-convenience fee has shown increase of 74%, whereas the convenience fee has also shown the increase of 78% over the quarter 1.
Sure. Ma'am, while on a quarterly basis, we might have a variation. But if I just annualize the INR 80 crores, that comes to around INR 370 crores on a full year basis as the non-service charge revenue. Would you say that, that is achievable in FY '23 as a whole. We might have quarterly variation in this.
[Foreign Language]
That was helpful. Ma'am my second question was on the eCatering side. If you could let us know what is the kind of volume being done as well as, as regards to getting the aggregators, not the top 2 ones, but the smaller ones to get the food options on board.
Okay. I have a good news to share that pre-COVID, I think, in the months of April and October '21, if I take the data. So our average meal booking has been -- average mix per day booking has been around 24,210 as compared to the average of 21,000 previously. So the total value of order was to the tune of INR 27.8 crores. And the aggregators, which are live around 10 in number, RailYatri, RailRestro, RailRecipe, Zoop, Garg Rajdhani, OLF, SpicyWagon, Comesum, Yatri Bhojan, et cetera, are resumed. Then we have around 1,000-odd festive service providers when the who are associated with us. And we are also in process of mobilizing our own Food Plaza and SFU people to be mandatory food provider for our train. So that facility is available in more and more trains. When -- last time when we were doing this earnings con call, we had mentioned that we are going to put in our B2C agents in the eCatering. At that time, only 2 were active, now 20 of such are active. And our number of stations where the eCatering is live has also increased 2 to 52. So our revenue from the eCatering is increasing. Order has also increased. A lot -- more to be done, which we would be doing. We are going for a massive kind of a promotion. We are also in the process of tying up with the new aggregator and new vendors also. So you'll see further improvements as the year passes.
Ma'am, just a follow-up on that. As regards the 20 B2C agents, how many of them would be on the supply side. Or on the ordering side, we have never had any problems. But as regards to providing the food options, how many of these B2C agents will be on the supply side.
These B2 agents are not only in the supply side, but we are going to have one B2C agent soon whom I will not name. Because our approval is yet in the process in a day, maybe in the next coming con call or on our investors meet by that time the approval will be there. I will be sharing his or her name. There are operators in the B2C segment who are our ticketing agent, but they would be in the supply also. RailYatri, is one. RailYatri is my it's eCatering agent also and the ticketing agent also, right? And this Comesum, Comesum is my supply agent, but he is very less of a eTicketing also he does. Similarly, we are going to add 2, 3 more who can -- who have become our ticketing agent also and will also be in the supply chain for the eCatering. So they are in process of tying up with the other hotel chains who can become -- ultimately, they book orders for those hotels and the supply chain for which we have already linked up and done one-to-one contracts. So they are gainer of our linking with them. Ultimately, IRCTC is gainer. Whether they earn or we earn, earning to IRCTC remains the same.
The next question comes from the line of [ Revant Shah ] from SBI Life Insurance.
Madam, you mentioned that we are in constant discussion with Ministry of Railways for policy related matters. So whether on this convenience fee circular which was issued by them. Were we in discussion with them to understand the impact on our company? Or were we left blindsighted by them?
Well, I'm not in position, I will reiterate my answer. Sir, I'm not in position to answer this question. I've already answered. And the good part of it is that the charges have been reversed, withdrawn so let's accept the fact.
Okay. Secondly, could you tell us on the developments of merger with RailTel and CRIS?
Such things are decided by our body DIPAM. We have not received any official communication in this regard.
And a couple of more things. Could you provide any update on the privatization of trains for which we have petted couple of -- we have won a couple of tenders. And any update or progress on that. And also on a payment gateway application, which was pending with RBI, could you give any update on that?
Our payment gateway application for that, we have recommended changes in our MOL that has gone to ministry. We have discussed today also and it has gone to the top authority. Once the ministry approves, then we will be sending to the rest of the approving bodies, so that it becomes part of our memorandum of association as a main -- in the main object clause. After that, we will be applying to RBI for the -- for getting the -- for, like, getting the license for the same. So that the payment aggregator services can be used. However, as well as the payment gateway is concerned, we can always use it. And first thing, and I forgot your first question. Can you please repeat, sir?
We have won a couple of tenders for this privatization of trade, can you update on that?
We have not received any communication so far, perhaps we will get it by tomorrow or day after. Let's hear from them, whenever ministry takes that decision.
We'll move on to the next question that is from the line of Bharat Parekh from CLSA.
Hello, can you hear me.
Yes, I can, sir.
This is Bharat Parekh. I hand the infrastructure research for Hong Kong headquarter Investment Bank called CLSA in India. I must congratulate you for the initiatives the management has taken to reach out to the market and improve the communication. So I think it's a great thing, and I must appreciate that. Also, I just wanted to ask you, ma'am, from an Investor Relations perspective, how do we reach out to the company because we have been writing multiple e-mails at investors and also other email IDs, which is available on your website. But unfortunately, we are not able to reach and also nobody picks up the land lines. So if you can guide us how do we out to you to understand your company a bit better?
We have defined Investment Relationship Officer. Mr. Anil Sharma. So far, he has been using his personal email ID, I have noted your point. Very soon, he will be communicating and put him on our website. That zero was kind of an ID, which is universally accepted which can be there permanently on the website will be created. And a person -- phone number of the person will also be mentioned in the site. So your points have been noted, sir. you have a good suggestion. Thank you very much for that.
So right now, we are emailing at asharma2490@irctc.com. Is that the one ma'am?
Yes, sir. It is the same. Anil Sharma is the person. Can you please give me your e-mail ID. Sir, you please share after this con call, maybe you can -- my number is there, you can give me a message. I'll find out where these mails are going. [Foreign Language] Let me see my system.
Yes, ma'am. So how do I reach us that will be my pleasure, ma'am.
[Foreign Language] We are here to sort out the issue. We don't want any investor to say this that they -- his query -- his or her query has not been answered.
That is so nice of you. I really appreciate the thought process you have, fully commandable I must say. And would be my pleasure to reach out to you and be in touch with you and understand the company. Really appreciate it.
The next question is from the line Mayank Babla from Dalal & Broacha.
Just I wanted to delve further in the non-convenience part of the Internet ticketing. You said INR 20 crores was from advertisements. Could you give the details of the balance revenue in that.
Yes, I'll readout for you, sir. In the first half year, I'll take the half year figure. When you see resources convenience fee has been INR 289 crores. And the service charges other than the I-Ticket has been INR 23 crores. Advertisement income, that is one -- the advertisement income is actually divided into 2 parts. For our convenience, we have divided into the 2 parts because we are maintaining it like that. In one part, we have received INR 5.84 crores. And in the second part, we have received around [ INR 15.37 crores ]. The annual maintenance charges, we have received around INR 58.34 crores. And eWallet that is the eWallet close wallet that we run INR 2.79 crores in that. And commission in the form of our B2C segment, that is INR 12.39 crores. [Foreign Language] The agent repayment charges when we change the agent, we also charge something. Then from 139 license fee, we'll take it that is at INR 2.36 crores. And the agent login authentication and inquiry charges also we have realized. We have monetized through inquiry, where also we have earned around INR 1.110 crores. So more and more revenues, the revenue of what we are trying to monetize our website. And that is why our revenue in the non-convenience fee has been 74% more than the quarter 1, and has been so for high year since any quarter.
And second, related to the convenience fee was -- you said 40% was from the general class ma'am. Can you give the split between AC and non-AC for the quarter in terms of percentage.
[Foreign Language] I will give you for the second quarter, sir.
Yes, please.
Second quarter average sales First AC is 0.3%. That is less than 1%. You know that executive, First AC put together will be around 1%, right? Second AC is around 3.5%; third AC is 14.9%; and AC tier is again 3.5%; sleeper class is 47.3%; Second AC is 40%. And our total inventory and there's another class. [Foreign Language] 0.01% [Foreign Language]. And the total inventory booking is around, the average of 80.23% in the second quarter, that is July, August and September. And as of now, we have 3,000 trains. Only 3 are providing these services.
Okay, sure. And just last question was regarding the Rail Neer. I believe this quarter, we had one plant also up and functioning. So what is the latest capacity per day in railway?
As of now, we have 15 plants operated before COVID when we were there some issues are there in the Bilaspur plant which we are sorting out. And our capacity is around 15 lakh bottles in a day still there. But because Rajdhani, Shatabdi, Duronto train not running, so we are running around 55% to 60% of the capacity. May be the festival -- during this festival period, we have certain variation if the demand might have gone up. I'm sorry I'm not carrying that figure in front of me as of now. But the capacity is 15 lakhs. I'll certainly inform you and put it on the website, if required.
[Technical Difficulty] Last question is from the line of [ Madhu De ] from Altavista Capital.
It's just a housekeeping question. My question is, what was the increase in the number of trains running in Q2 compared to Q1? And how does that compare to your last peak over quarter?
Well, when we initially started, we started after COVID with the 25 pair of trains gradually start -- going up and up. And as of -- in the month of October, now I'm talking because October is also over, today 1st November, we have 3,000 trains which are running and for which we are providing the reservation. It starts coming up like this. In the month of June, it was around 2,500 trains. In July, it was 2,745 trains. Then again, August, the number of trains more or less same, like 5, 10x more I guess. In September, again, festival trains have come up. So you have 29 of such trains -- 2,149 trains. Now in October, you have 3,900 train. So I think we have reached almost -- as far as the reserved accommodation is concerned in the form of a special trains near to normalization with 10 or 15 short.
So when do you expect the full catering services to start and what percentage of the train you are offering catering at this point in time?
See, the train where you provide these services, and where catering services and where you provide the reserved accommodation cannot be actually considered. Because for every train you will have to provide the reservation, and you can provide the catering in the train where you have pantry cars and where the trains which are running during the day. If the trains are running during the night, there is no need of catering. So I can tell you the trains which we are running with the WTB, [indiscernible] we call them, the number is 346. And train, where we have train side vending is 288. So the total number of our trains is 634 against the 500-odd trains. I think last quarter, when we had a discussion, we were doing around 550 such trains, now it's 634. And most of the trains are having contracts. So we have been able to play for all of them and the short-term contracts were also running. We have been given all trains on the contract, except 4 train, which we run the department fee because there's one litigation going on, and we have to handle that.
Ladies and gentlemen, that is the last question. I now hand the conference over to Mrs. Rajni Hasija, CMD of IRCTC for closing comments.
It has always been pleasure interacting with investors and good to know how industry thinks about us. There have been certain ups and downs in the past. And life says, as life says move on. So we believe in moving on. And we are here and presented today our quarter 2 results where we have really resisted good amount of our profit in all the 8 segments. My CFO has already read it. In Rail Neer, we have bridged up the losses. And in the catering, we have reduced our losses to the extent that the losses have reduced to only INR 19 lakhs. The good days are a head, it looks. Normalization is happening, vaccination is happening. The impact of COVID is gradually going away. We need to be a little cautious during the festival season. So I hereby close saying that in the tourism sector also in the hardcore tourism, we are really doing fantastic. And in the hardcore tourism, really making profit. And we are trying to curtail the losses of Tejas also to the extent possible. And we are examining it very aggressively and taking tough calls on each and every department in the Tejas. With this, I finish my words here. I'm wishing you a very, very happy Diwali, maybe the next year after Diwali is very, very happy and healthy for every investor, everyone in this country. Thank you very much, sir.
Thank you. Ladies and gentlemen, on behalf of IDBI Capital, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.