The Busy Brains
15 Jun 2023
Mobility platform Intrcity, known for its SmartBus and RailYatri services, experienced a substantial increase in gross revenue, reaching Rs 288 crore in FY23. Additionally, the company narrowed its losses by two-thirds. Discover how Intrcity's strategic approach, strong occupancy rates, and diverse sales channels contributed to its success in the transportation sector.
Intrcity, the renowned mobility platform that operates SmartBus and RailYatri, has achieved remarkable growth in gross revenue over the past two fiscal years. Its revenue soared nearly six-fold, from Rs 49 crore in FY21 to an impressive Rs 288 crore in FY23. Moreover, the company successfully reduced its losses by two-thirds during this period.
According to Kapil Raizada, the co-founder and CEO of Intrcity, the company's gross revenue surged 2.4 times to Rs 288 crore in FY23 from Rs 118 crore in FY22.
Founded by Kapil Raizada and Manish Rathi, Intrcity operates on 40 routes and boasts a fleet of 230 buses across 14 states. The company follows a unique model of leasing buses from large fleet operators and providing end-to-end management. Currently, Intrcity collaborates with approximately 35 such operators. Raizada mentioned that the average occupancy rate in FY23 remained around 91%.
Intrcity reveals that one-third of its transactions originate from its website and application, while the remaining portion comes from aggregators and offline channels, such as organized agents.
Raizada added, "About 50% of the total sales are from existing users," indicating a strong customer retention strategy.
Transportation costs, encompassing operator fees and vehicle expenses, constituted approximately 70% of the total expenditure in FY23. This cost rose by 76.3% to Rs 210 crore in FY23. Although Raizada did not disclose a comprehensive expense breakdown for FY23, he mentioned that employee benefits, advertising, legal fees, and professional fees collectively led to a total cost increase of around 87.7% to Rs 304 crore in the fiscal year.
Intrcity's losses decreased by an impressive 63% to Rs 16 crore in FY23, according to the co-founder.
Raizada stated, "FY24 will be the first full fiscal year in which we will break-even and post a decent profit."
During FY23, the company witnessed an improvement in its EBITDA margin, reaching -6%. Data provided by the firm indicates that it spent Rs 1.07 to earn a unit of operating revenue in the last fiscal year.
The bus travel sector is expected to experience growth with the advancement of road infrastructure, and Intrcity is well-positioned to capitalize on this potential. With its focus on quality buses and enhanced passenger experiences, Intrcity has emerged as a prominent player in the industry. The company's success so far sets a positive outlook for the collective impact of similar players in the transportation sector.