Why EaseMyTrip Share Price is Falling

The Indian travel and tourism sector has been roaring since the government eased lockdown restrictions. As a result, many travel stocks have seen their share price rise.

However, even after strong growth prospects in the sector, shares of EaseMyTrip, listed under the name Easy Trip Planners, one of the leading travel agencies in India, have tanked 14% in a week.

Let's review the potential causes of the stock's steep collapse.

#1 Profit Booking

Shares of EaseMyTrip skyrocketed by a whopping 40% in November 2022, touching its 52-week high. This rise in the stock came in after the stocks traded ex-bonus and ex-split on 21 November 2022.

Considering these gains, the recent correction in the stock can be due to the exorbitant valuation of the firm.

The Price to Earning (PE) multiple of the firm currently stands at 9.5x, while the average industry PE multiple stands at 8.3x. This makes the shares of the company overvalued on the PE front.

Campbell Advertising offloaded the company's shares worth Rs 194.2 million (m).

It sold 3.4 m shares, amounting to a 0.3% stake in the company in a bulk deal. The shares were sold at an average price of Rs 56 per piece, taking the aggregate value to Rs 194.2 m.

#2 FII stake sale

FIIs have also been disinvesting their stake in EaseMyTrip since December 2021. FII stake stood at 3.4% in June 2022 quarter. It now stands at 2.5%.

This was due to rising interest rates in the developed markets, making emerging markets like India less attractive for FIIs.

Apart from this, individual investors have also decreased their stake by 13% YoY to 11.2% in September 2022.

For more details, you can have a look at Easy Trip Planners' latest shareholding pattern.

#3 Robust quarterly results

For the September 2022 quarter, the company reported a 148.3% YoY rise in revenue at Rs 1.1 bn. The net profit for the same period came in at Rs 282 m, up 4% YoY.

This robust growth was on the back of a 121% YoY increase in the gross booking revenue of the firm.

Apart from this, the company plans to expand its service range in Saudi Arabia. It has signed a three-year exclusive deal with Go First to sell, promote and market passenger tickets.

For the financial year 2023, the company, is focusing on the debt-free acquisition of 2-3 firms to expand its reach in the international market.

How EaseMyTrip shares have performed lately

Over the week, the company's shares are trading lower by 14.1%. The shares of the company have gained 12.2% in a month.

So far, in 2022, the stock is trading higher by 66.7%. Over the last year, shares of the company have soared by 77.4%.

The company touched its 52-week high of Rs 73.5 on 24 November 2022 and its 52-week low of Rs 30.71 on 6 December 2021.

About EaseMyTrip

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.

Its Hotel Packages sector offers vacation packages and hotel reservations through contact centers and branch offices.

Its other services include rail ticket booking, bus ticket booking, taxi rental, and ancillary value-added services, such as travel insurance.

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.

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Easy Trip Planners vs Crown Tours

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