The Indian Railway Catering and Tourism Corporation (IRCTC), whose operations have been hit due to the suspension of passenger prepare providers due to COVID-19, is hopeful that the business would normalise October onwards.
In a communique to the inventory trade, the state-owned agency stated that it was a debt-free firm and had no liquidity-related issues.
“Due to the lockdown, the revenue and profitability are likely to be adversely impacted for the April-June, 2020 quarter. As the situation is very dynamic, the company is closely monitoring it. The company expects that the business situation could normalise during the third and fourth quarter,” it stated within the doc.
The assertion comes amid the Indian Railways’ announcement cancelling all common passenger trains until August 12, barring the 230 particular trains. Following this, IRCTC’s scrip closed 2.80% decrease on the BSE at ₹1,381.60 per share.
IRCTC’s Board was to meet on Friday to approve the monetary outcomes. However, this has been postponed “due to unavoidable circumstances”. It, nonetheless, added that the impression of COVID-19 on the financials of FY20 can be minimal.
The firm stated Internet ticketing business had been adversely impacted due to lower in prepare journey in March after which suspension of passenger prepare operations by Indian Railways “This drop in bookings is expected in the coming quarters also though in a decreased manner,” it stated.
Stating that catering business could also be adversely affected within the April-June, 2020, interval as solely few trains are operating with restricted provide of meals, IRCTC stated it has provided round 1.7 crore meals (at Rs 50 and 35/meal) on Shramik Special Trains from May 1 to June 22, 2020.
It additional added that the Company’s capital and banking services stay intact. “There are no liquidity concerns as we have sufficient cash/bank balance. The Company is debt free Company and is able to make its own financing arrangements for its projects from its internal accruals.”
It added that as the foremost receivables are from Ministry of Railways, Ministry of Tourism, and a few PSUs, the Company doesn’t foresee any issues in realising the identical.
On demand for its varied providers going ahead, IRCTC stated within the current circumstances of sustaining social distancing, there’s excessive demand for the e-ticketing providers, although it’s instantly depending on the operation of trains by the Indian Railways.
It added that due to suspension of nearly all of passenger trains, gross sales of its packaged consuming water, Rail Neer, is predicted to be low within the upcoming six months. “Travel pattern of railway passengers may change leading to reduction in average occupancy of trains. Eating preferences may also see a change with people preferring to carry their own food wherever possible,” it added.
On tourism it stated there’s momentary discount in demand due to lock down, which the corporate expects to enhance within the third quarter and normalise by the fourth quarter.