IRCTC Tie-up with Swiggy to Deliver Pre-Ordered Meals

Indian Railway Catering and Tourism Corporation (IRCTC) share price rose over 3% in the morning deals on Friday (February 23) for the second consecutive session. This rise came after IRCTC's announcement of a tie up with Swiggy for the supply and delivery of pre ordered meals through IRCTC's e-catering portal.

Expansion Plans

IRCTC disclosed that this facility will be launched in the first phase at four railway stations Bengaluru, Vijayawada, Bhubaneswar and Visakhapatnam. The e-catering service is expected to be "available soon" and will be expanded to other stations after the completion of the first phase. The e-catering service will be facilitated through Bundl Technologies Pvt. Ltd. (Swiggy Foods) as stated in a BSE filing by IRCTC. This partnership aligns with IRCTC's strategy of forging alliances to extend its services to a larger number of railway stations and offer a broader range of food options for passengers.

IRCTC had previously partnered with Zomato for similar services at selected stations including New Delhi, Prayagraj, Kanpur, Lucknow and Varanasi. The collaboration with Swiggy is expected to further enhance the passenger experience and boost the business of the food delivery application, given the high volume of passenger traffic in the country.

Swiggy is preparing to enter the stock market and is likely to file its draft red herring prospectus with SEBI for its IPO launch soon. The company aims for an $11 billion IPO valuation target and anticipates raising an estimated ₹8,300 crore through the IPO in 2024. The partnership with IRCTC is poised to contribute to Swiggy's growth trajectory.

Financial & Outlook

In its Q3 results IRCTC reported a consolidated net profit of ₹300 crore for the quarter ended 31 December 2023 up 17.4% yoy. Revenue grew by 22% to Rs 1,118.3 crore with EBITDA increasing by 21% to ₹394 crore. Revenue from catering and internet ticketing units increased by 29% and 11.4% respectively.

IRCTC's collaboration with Swiggy in enhancing the passenger experience. Despite short to medium term uncertainties particularly with upcoming elections analyst believes that the partnership signals a positive long term outlook for IRCTC. As the service expands investors are likely to closely monitor the growth trajectory of IRCTC shares.

Final Words

Partnership between IRCTC and Swiggy represents a strategic move aimed at revolutionizing railway catering in India. By leveraging Swiggy's robust network IRCTC aims to offer passengers a diverse array of pre-ordered meals thereby enhancing the overall travel experience. Both companies stand to benefit from increased demand and improved service offerings positioning themselves for long term success in the dynamic Indian market.