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Easy Trip Planners Ltd>
  • CMP : 40.9 Chg : -0.05 (-0.12%)
  • Target : 490.0 (24.05%)
  • Target Period : 12-18 Month

28 May 2022

Digital play on travel recovery...

About The Stock

Easy Trip Planners or EaseMyTrip.com (EMT) is the fastest growing and only profitable company in the online travel portal in India. The company offers a comprehensive range of travel-related products and services for end-to-end travel solutions, including airline tickets, hotels and holiday packages, rail tickets and bus tickets.

  • Airline tickets accounted for 94.0% of revenues (pre-covid levels) while hotels and other services contributed 5.4% and 0.6% of revenues, respectively
Q4FY22 performance

Easy Trip Planners reported weak results for Q4FY22

  • Adjusted revenues declined 1.7% YoY to ₹98.5 crore, in wake of omicron induced restrictions while gross booking revenues (GBR) was up 29% YoY to ₹1171 crore.
  • EBITDA margins also declined 1147bps YoY to 30% due to higher employee and marketing costs.
  • As a result PAT was lower by 23.4% YoY to ₹23.4 crore.
What should Investors do?

We like EMT for its user friendly platform, unique travel offerings, low cost business model and healthy financial position.

  • Considering strong growth potential of this technology platform in travel, we maintain our BUY recommendation
Target Price Valuation

We like EMT for its user friendly platform, unique travel offerings, low cost model, and healthy financial position. The company is consistently gaining market share led by its two strong growth pillars and is now well placed to withstand any competition which may come-up in the future given the strong liquidity and its improving brand visibility in the domestic air ticketing segment.

Further benefit is expected to accrue from segments like international air and hotel booking space over the next three to four years, which currently have online penetration below 20%.

We believe EMT remains a best proxy vs. airline or hotel companies to play on travel recovery given its low cost and negative w/cap characteristics along with strong balance-sheet. We maintain BUY rating and raise our target price to ₹490/share vs ₹335/share earlier (implying 1.2x FY24E MCap to GBR, ~14x FY24E MCap/sales, 45x FY24E EPS).

Key Triggers for future price performance
  • Gross booking revenue (GBR) for FY22 stood at ₹3716 crore with total domestic air passenger traffic @ 59% of pre-covid levels. Now with full resumption, we expect GBR to grow at 39% CAGR during FY22-24E.
  • Lean cost model and No convenience fee strategy remain key pillars supporting such rapid, profitable growth. This has also led to stickiness by customers with healthy repeat transaction rate of ~86% in the B2C channel
  • Further benefits would accrue from high margin segments like Hotels (Traviate – B2B tehnology platform, Spree Hospitality – hospitality management Company and Bus booking segment (Yolo - intercity mobility platform).
  • This would not only help to bolster its margin further and would make EMT a fully integrated player in the tourism space going forward

Key Financial Summary

Particulars FY19 FY20 FY21 FY22 3 Year CAGR FY23E FY24E 2 Year CAGR (FY22-FY24E)
Net Sales 205.3 285.7 198.1 400.4 24.9 670.7 754.1 37.2
EBITDA 24.9 30.5 75.3 132.5 74.6 241.2 303.2 51.3
EBITDA (%) 12.1 10.7 38.0 33.1 - 36.0 40.2 -
Net Profit 24.0 33.0 61.4 105.9 64.0 185.8 234.6 48.8
EPS (|) 1.9 1.5 2.8 4.9 - 8.6 10.8 -
EV/EBITDA 212.5 260.1 139.7 81.0 - 46.2 36.6 -
RoNW 35.3 32.6 37.7 44.9 - 47.8 41.2 -
RoCE 36.0 33.6 36.0 37.7 - 44.4 40.9 -
Source: Company, ICICI Direct Research

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