Easy Trip Planners

About the Company

EaseMyTrip is an Indian online travel company, founded in 2008 by Nishant Pitti, Rikant Pitti, and Prashant Pitti. Headquartered in New Delhi, the company provides hotel bookings, air tickets, holiday packages, bus bookings, and white-label services. EaseMyTrip has overseas offices in Singapore, Dubai, Maldives, and Bangkok.

Q1 FY23 Updates

Financial Results & Highlights

Detailed Results:

1. Revenue growth of 163% YoY was on a low base due to Covid 2nd Wave last year.
2. Strong growth in Revenue of 40%  and PAT of 44% on QoQ basis.
3. Gross Booking Revenue (GBR) reported stands at Rs. 1663 cr up 350% YoY [Covid effect] and 42% QoQ. 
4. In % of GBR terms, discount to customers fell to 2.6% from 4.9% YoY, but in absolute terms it increased Rs. 44cr up from Rs.17cr last year. 
5. As a % of GBR, Employee expense, Marketing expense and other expenses remained stable.  
6. Operational Performance: 

• Flight Bookings – up 9% QoQ at 2.2M [30% Volume from International]
• Hotel Nights – up 157% QoQ at 71,791
• Trains, Buses & others – down 12% QoQ at 160,540

7. EBITDA Margins lower both YoY and QoQ at 49.7%, driven by higher employee expenses        and other expenses. [Reason: Point 6 below] 
8. Launched co-branded credit card in partnership with Standard Chartered Bank as a part of marketing initiative. 

Investor Conference Call Details:

1. Set-up EaseMyTrip New Zealand as a wholly owned subsidiary.
2. GMV from Middle East Office stood at Rs.7 cr for the quarter. Majority of it is from air bookings.
3. ME operations started from April. Monthly GMV – April: 84 Lakhs | May: Rs. 1.2 cr | June Rs.5 cr. 
4. Backoffice operations to be handled from India itself, unless issue of language barrier comes up, like in case of customer call centres. 
5. At current quarter run rate, expect GBR to touch around Rs. 7000 cr. 
6. Many International routes are still not operating. With more routes opening and relaxing of Covid-related rules will help the Flight bookings. 
7. Expect to expand to 200 hotels in the next five years. Currently the figure stands at 23 Hotels. 
8. Regarding YOLO acquisition: Aim to provide premium segment of buses. Will help bus operators to improve the condition of the bus, install GPS Trackers and as a whole provide a comfortable ride to customers.
9. YOLO revenues have started to come in from July.  
10. This quarter take rate was at 5.3%. Adjusted revenue figure affected by discounts. [Adjusted revenue figure affected by discounts.]
11. When discounts are given, convenience charges levied and vice versa, this set-offs each other and take rates on net revenue basis are maintained around 5%. 
12. Take rates of Industry has declined by 0.9% but EMT has been able to maintain theirs. 
13. Payments Gateway charges to be looked at from GBR perspective because the charges are on the whole amount. Standard Rates 0.6% – 0.7%. 
14. Increase in other expenses is due to growth in B2B segment where commissions are paid to agents. 
15. Take rates on gross level are same for International and Domestic Flights. In absolute terms take rates are higher in international due to higher ticket prices. Higher margins will be driven by more business class bookings. 
16. OTA Market Share would be around 20%. Market share is in part a function of discounts which have been decreasing for EMT on % of GBR basis. [Down from 4.2% in Q3FY22 to 2.6% this quarter]
17. With respect to competition from old player [Cleartrip] who is now backed by Flipkart – having sailed through many competition cycle, management is confident of protecting its market share and growing. 
18. Confident of its bootstrapped DNA to defend against competition as well as grow in a sustainable way. [Was bootstrapped with just 15 lakhs in funds for first 5 years, with no outside funding from banks or VC/PEs]
19. Expect to grow 2x of the Airline Industry growth rate which is expected to grow at around 14% for the coming 2-3 years.

Analyst Views:

The company is backing on its ability to grow several verticals within its business which can provide it with its next leg of growth. It is focussing on its Hotel business and have a target to of 200 Hotels which they hope to achieve in the next 5 years, it is looking to expand services in the International market, the optimism of which is corroborated by the MoM growth in the Middle East business. For a growing businesses and new verticals, management’s way of growing at break-even can be justified to an extent. The only thing probably supporting its high valuation currently is the growth leaving room for only a small margin of error. Going forward the thing to look out for would be the competition in the space and operating leverage playing out. 

Q4 FY22 Updates

Financial Results & Highlights

Detailed Results:

1. The company had an weak quarter with revenues de-growing by 6% YoY on consolidated basis.
2. PAT decreased by 23% YoY on a consolidated basis.
3. Gross booking revenue for this FY increased by 75% YoY whereas Air segment bookings increased by 56.9% YoY.
4. Air segment & trains/bus segment saw transaction numbers growing by 13% & 59% YoY in Q4.
5. Hotel nights (in numbers) de-grew by 15% YoY for Q4.
6. The Board has recommended a bonus issue of 1:1.

Investor Conference Call Details:

1. The company saw lower revenues were due to a reduction in discount income & commission which the company receives based on performance targets which couldn’t be achieved due to the Omicron wave.
2. The management states that the overall market share should be north of 10% & for the online market, it should be north of 20%.
3. The company is targeting double-digit growth in its hotel segment for the next 2-3 years.
4. The management explains that the OTA can offer better discounts than captives due to tie-ups with several banks, credit cards & fin-tech companies who contribute a certain portion of the company’s discounts to the users.
5. The company got lower convenience fees due to lower discounts offered.
6. The management believes that since most of its competitors are loss-making & dependent on PE, VC funds unlike the company will be able to perform better at times of cash scarcity.
7. The company gave an advance of Rs.40 Cr to airlines in FY22 to help the company get better commissions from the airlines.
8. The management is very bullish about demand in the current year due to the pent-up demand of previous years.

Analyst Views:

Founded in 2008, EaseMyTrip is India’s 2nd largest online travel booking portal. The Q4 was impacted due to the omicron wave leading to lower discount & commission incomes coupled with the company missing its volume targets resulting in further lower commission income. The company is making good inroads into the travel industry and is looking to expand its influence in the sector with key acquisitions which help enhance its portfolio of offerings and help provide bundled services. The company has also taken various actions and introduced new policies like a full medical refund and others which are expected to help differentiate EasyTrip from the rest of the market. It remains to be seen how long it will take for normal travel behaviour to come back to pre-covid levels and whether the acquisitions and policy actions of the company will help it separate itself from the rest of the pack. Nonetheless, given the large market share in online travel bookings for EaseMyTrip and the steady revival of the travel sector in India, Easy Trip Planners is a pivotal stock to watch out for in the travel sector.

Q3 FY22 Updates

Financial Results & Highlights

Detailed Results:

1. The company had an excellent quarter with revenues growing by 91% YoY on consolidated basis.
2. PAT increased by 81% YoY on a consolidated basis.
3. Gross booking revenue for this quarter increased by 65% YoY whereas Air segment bookings increased by 49% YoY.
4. Gross booking revenue for 9M increased by 108% YoY whereas Air segment bookings increased by 87% YoY.
5. The key acquisitions for this quarter include
   1. Spree: A 1200 room-keys hospitality management company
   2. Traviate: India’s first B2B technology-driven travel marketplace
   3. YoloBus: A premium intercity mobility platform.
6. Hotel nights sold saw a jump of 144% YoY in Q3.
7. Train, bus & others segment grew by 162% YoY in Q3.
8. The Board has recommended a bonus issue of 1:1.

Investor Conference Call Details:

1. Yolobus has an asset-light business model and works with bus operators pan India. The company entered into a definitive agreement with YoloBus to acquire the brand name, technology, running business expertise, data, and the team of Yolo Traveltech Private Limited, operating under the name of YoloBus. The deal will be consummated within a month & it will be an all-cash deal.
2. Spree Hospitality is a 1200 room-keys hospitality management company, to expand its presence in the hotel and holiday segment. It was acquired for Rs.18.25 Cr and profit contribution for December from this stood at Rs.12 lakhs.
3. Key initiatives in this quarter includes full refund-medical policy, special airfare discount on waitlisted tickets & partnership with SpiceJet.
4. Vijay Raaz & Varun Sharma were appointed as first brand ambassadors.
5. Company is doing multiple tie-ups with various brands, banks & e-wallets.
6. Margins for the current quarter increased due to change in product mix towards hotel & other services.
7. Revenue from hotel bookings in the December quarter was low due to the 3rd covid wave.
8. The current GBR is the highest in the company’s history.
9. The company’s market share in the Air segment has increased from 7.5-8% to the north of 10% YoY.
10. The management is very bullish about the next 2 years due to the high pent-up demand coupled with the pandemic almost reaching its ending phase.
11. The company is planning to take benefit of synergies between the company itself and its new acquisition-Spree by leveraging its offering for providing a bundled service (like asking people booking a flight ticket to add a spree hotel stay by paying a little extra thus creating a bundled offering).
12. The company’s acquisitions are primarily focused on acquiring asset-light fast-growing companies that have synergies with the company rather than being too much focused on payback from investment.
13. The management wants to become the leader in the travel industry and not just create a platform, but also create the entire ecosystem on the travel side, where a lot of good companies are in the travel trade.
14. The management is focused on ensuring the profitability of the company & maintaining an operating margin of 60% in the future as well.

Analyst Views:

Founded in 2008, EaseMyTrip is India’s 2nd largest online travel booking portal. The company has seen a very good recovery with bookings across all segments rising a lot YoY. The company is making good inroads into the travel industry and is looking to expand its influence in the sector with key acquisitions which help enhance its portfolio of offerings and help provide bundled services. The company has also taken various actions and introduced new policies like a full medical refund and others which are expected to help differentiate EasyTrip from the rest of the market. It remains to be seen how long it will take for normal travel behavior to come back to pre-covid levels and whether the acquisitions and policy actions of the company will help it separate itself from the rest of the pack. Nonetheless, given the large market share in online travel bookings for EaseMyTrip and the steady revival of the travel sector in India, Easy Trip Planners is a pivotal stock to watch out for in the travel sector.

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