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Why EaseMyTrip Share Price is Rising

Feb 12, 2024

Why EaseMyTrip Share Price is Rising

Travel and tourism sector are two of the largest industries in India, contributing significantly to the country's GDP.

With an uptick seen across segments and more in the experiential travel segment, the outlook for the entire sector looks positive.

Among all the diversified companies involved in this space, one primary beneficiary is online travel aggregator (OTA) platform Easy Trip Planners.

Easy Trip Planners offers a comprehensive range of travel, related products and services under the flagship brand ''Ease My Trip''.

In the past couple of trading sessions, share price of Easy Trip Planners has shot up owing to two reasons.

In 2024 so far, the stock is up over 30%.

Let's find out why.

#1 Decent Q3 Results

The primary reason why shares of Easy Trip Planners have shot up in recent trading sessions is owing to the healthy Q3 performance it put out last week.

EaseMyTrip's revenue from operations increased 13.5% to Rs 1.6 billion (bn) in the quarter under review.

Meanwhile, the company's profit increased marginally by 9% to Rs 456.8 million (m).

In the quarter gone by, the company reported its highest profit after tax as it started charging convenience fees on some sectors in the air segment.

Meanwhile, employee benefit expenses remained the most significant cost at Rs 221 m, rising 55.6% from Rs 142 m reported in the year-ago period.

For the first nine months of the fiscal year, the company sold 83.7 lakh air tickets (net of cancellations), accompanied by 3.8 lakh hotel night bookings and 7.7 lakh in other bookings.

#2 New 5-Star Hotel

Apart from Q3 results, the other reason why shares of the company are on a roll recently is because it announced opening a 5-star hotel in Ayodhya.

The company's board in-principally approved the proposal to open a 5-star hotel in Ayodhya, strategically situated near the iconic Shree Ram Mandir.

The hotel's prime location is less than 1 kilometre from the revered temple.

The company will invest up to Rs 1 bn in Jeewani Hospitality Private Limited, the entity super heading the project under incorporation.

This investment will represent 50% of the total paid-up share capital of the JV company.

Note that several stocks have shot up owing to the Ram Mandir temple inauguration as investors looked for back-door plays and latched on to any company associated even remotely with the Ram Mandir inauguration.

In Easy Trip Planners' case, better late than never as the tourist visits in Ayodhya is only expected to increase in the coming months and possibly years.

What Next?

Going forward, the company is aggressively looking to grow its air ticketing business and enhance presence in non-air segments such as hotels, holidays, and transportation on a global scale.

The company is open to both - organic and inorganic routes to expand domestically. In December 2023, it acquired a stake of approximately 13% in ECO Hotels and Resorts chain.

It also introduced EasyDarshan, offering pilgrimage packages, and launched 'Explore Bharat' to showcase India's rich heritage to international travellers.

The company's management has highlighted that they're projecting a profit before tax (PBT) of Rs 2.5 bn in FY24.

Note that Easy Trip Planners has not had a single year of loss in the last 12 years, and has managed to double its topline and grow its profits by 5x between FY17 and FY22 and has even started paying dividends FY21 onwards. Not to forget the company is almost debt free.

Besides, the company checks the quality mark when it comes to management.

How Easy Trip Planners Share Price has Performed Recently

In early trade today, shares of the company shot up over 3% following the proposal announcement of its 5-star hotel in Ayodhya.

In 2024 so far, shares of the company have gained over 30%.

Easy Trip Planners has a 52-week high of Rs 54 touched on 8 February 2024 and a 52-week low of Rs 37 touched on 26 October 2023.

chart

Listed in March 2021 at Rs 13 per share, shares of the company saw its peak in November 2022 at Rs 66 per share.

During its IPO, the offer saw a huge demand, receiving an oversubscription to the tune of a whopping 159x.

Here's a table comparing Easy Trip Planners with its peers -

Comparative Analysis

Company Easy Trip Thomas Cook Transcorp Int Yatra Online
ROE (%) 44.3 0.9 0.9 5.6
ROCE (%) 50.9 7.3 7.4 15.4
Latest EPS (Rs) 0.9 4.2 0.8 0.4
TTM PE (x) 60.1 40.1 55.9 416.2
TTM Price to book (x) 14.1 5.7 2.5 3.7
Dividend yield (%) 0 0.2 0.4 0
Industry PE 65.6
Industry PB 16.4
Data Source: Ace Equity

About Easy Trip Planners

EaseMyTrip, listed under the name Easy Trip Planner is a leading travel agency in India.

It is engaged in the business of providing reservation and booking services related to travel and tourism.

Its segments include air passage, hotel packages and other services. Its Air Passage section includes call centers, an internet and mobile-based platform.

For more details about the company, you can have a look at, Easy Trip Planners company fact sheet and quarterly results.

You can also compare Easy Trip Planners with its peers.

Easy Trip Planners vs Cox & Kings

Easy Trip Planners vs Crown Tours

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Yash Vora

Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.

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