Best Travel Stock: Ixigo vs Easy Trip Planners

The travel and tourism industry is on a rocket ride, with wanderlust reaching new heights across the globe, especially in India.

It is expected to grow at a compound annual growth rate (CAGR) of 9% over the next five years. This will be driven by a surging travel craze, the government's initiative to boost infrastructure and transportation, and rising disposable income.

With this travel boom comes thrilling competition among travel companies, all vying to be your ultimate travel partner. They're offering custom-built adventures, cutting-edge tech tools, and deals.

In this article we are comparing two leading travel companies namely Ixigo, and Easy Trip Planners on various parameters to see which one's a better travel player.

Business Overview

# Ixigo

Founded in 2006, Le Travenues Technology is an online travel agency (OTA) that allows users to book train, flight, and bus tickets through its platform Ixigo.

It also offers allows users to book hotels and holiday packages.

Recently, Ixigo also developed an AI-based platform that will help travellers plan their detailed itineraries.

It also launched a value-added service called Ixigo Assured Flex, through which travellers can book their air and rail tickets flexibly.

# Easy Trip Planners

Easy Trip Planners is India's second-largest online travel tech platform that offers travel-related products and services through its flagship brand, 'Ease My Trip'.

The company provides end-to-end travel solutions such as airline tickets, train tickets, bus tickets, hotels, holiday packages, and other value-added services.

It also offers hospitality services through Spree Hospitality, which has a diversified portfolio of properties across 45 locations.

Ease My Trip recently ventured into charter solutions through its subsidiary Nutana Aviation Capital.

The company also has a presence in the insurance sector through its subsidiary, EaseMyTrip Insurance Broker Private.

Particulars	Ixigo	Easy Trip Planners
Market Cap (in Rs billion)*	65.3	75.9

Source: Equitymaster|*as of June 21, 2024

In terms of marketcap, Easy Trip Planner is a larger company with a marketcap of Rs 75.9 billion (bn), as against Rs 65.3 bn for Ixigo.

In terms of network reach, Easy Trip Planners has the largest agent network across India, with over 60,000 agents across B2E (business-to-employee), B2C (business-to-consumer), and B2B2C (business-to-business-to-consumer) distribution channels.

It also has international offices in several countries including Singapore, UK, UAE, Thailand, New Zealand, and USA. It has served over 20 million (m) customers until date.

Ixigo, on the other hand, has the highest monthly active users, around 83 million (m), and is also one of the fastest-growing OTAs in terms of downloads and users.

It is difficult to compare the performance of the two companies on the bourses, given that Ixigo shares were listed on 18 June 2024.

Within two days of listing, the shares of the company have zoomed over 112%, doubling investors' money in no time.

Easy Trip Planners' shares, on the other hand, fell marginally by 1.3% over the last year. The benchmark index Nifty 50 has given a 24.6% return in the last year.

# Revenue

Travel companies mainly earn their revenue from commissions. By monitoring the revenue pattern, we can analyse whether the company is able to do more business than it did in previous years.

In terms of revenue growth, Ixigo has outpaced Easy Trip Planners.

In the last five years, the company's revenue grew at a CAGR of 65.5%, whereas Easy Trip Planner's revenue grew by a CAGR of 34.7%.

Ixigo witnessed strong revenue growth, with the revenue growing over ten times in the last five years.

This is primarily because the company has a diversified business model, and has leveraged AI to create an established presence for itself.

For Easy Trip Planners, the primary reason behind consistent revenue growth despite the pandemic-led lockdown is the company's strategic acquisitions and partnerships with hotels, airlines, travel technologies, and various other travel service providers in other countries.

These partnerships and acquisitions have helped the company diversify its revenue across multiple streams, such as ticket bookings, hotel bookings, holiday packages, and insurance.

Revenue

Net Sales (in Rs m)	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023	5-Year CAGR
Ixigo	404	1,116	1,356	3,796	5,013	65.50%
Easy Trip Planners	1,011	1,414	1,385	2,354	4,488	34.70%

Source: Equitymaster

# Profitability

In terms of profitability, Easy Trip Planners is leading.

In the last five years, the earnings before interest tax depreciation and amortisation (EBITDA) have grown at a whopping 258.3% CAGR, driven by growth in revenue and its focus on lowering discounts at operational costs.

Its net profit also grew at a CAGR of 35.6% during the same period. The company also has high gross and net profit margins compared to Ixigo.

For Ixigo, the EBITDA and net profit turned positive in the last five years. This indicates a strong growth in profits primarily because of strong revenue growth, cost efficient services, and value added services provided by the company.

The profit margins, however, are very low when compared to its competitors. Given the company's growth trajectory, the margins are expected to improve going forward.

Profitability

EBITDA (in Rs m)	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023	5-Year CAGR
Ixigo	-540	-245	33	-123	161	NM
Easy Trip Planners	3	176	779	1,331	1,771	258.30%

PAT (in Rs m)	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023	5-Year CAGR
Ixigo	-574	-266	75	-211	234	NM
Easy Trip Planners	293	330	610	1,059	1,341	35.60%

Gross Profit Margin	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	133.80%	-21.90%	2.40%	-3.20%	3.20%
Easy Trip Planners	0.30%	12.40%	56.20%	56.50%	39.50%

Net Profit Margin	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	-142.10%	-23.80%	5.60%	-5.60%	4.70%
Easy Trip Planners	29.00%	23.30%	44.10%	45.00%	29.90%

Source: Equitymaster

# Debt Management

Another important metric to monitor is the debt of a company. This will help us understand its financial obligations. A high debt implies high interest cost, which ultimately reduces the net profit.

Easy Trip Planners and Ixigo are debt-free companies.

Easy Trip Planners has acquired multiple businesses in the hospitality and travel sectors in the last five years to expand its service offerings.

It plans to continue to expand its business through acquisitions in the future as well. At present, it has no significant capex planned, but has enough cashflows to meet any big investment that comes its way.

Ixigo, on the other hand, repaid all its debt in the financial year 2022. It has significant capex planned through the funds it raised through IPO (initial public offering).

It plans to invest in cloud infrastructure and technology to offer better services to its customers. It also plans to grow inorganically by acquiring undisclosed companies.

Debt Management

Debt to Equity Ratio (x)	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	-1.1	-1	0.3	0	0
Easy Trip Planners	0	0	0	0	0

Source: Equitymaster

# Return Ratios

In terms of return ratios, Easy Trip Planners is leading.

In the last five years, the RoCE and RoE of Easy Trip Planners averaged 59.5% and 38.9%, respectively.

The return ratios are lower if we compare them with pre-COVID levels, but they are higher than those of Ixigo.

For Ixigo, the return ratios were negative.

However, they turned positive in March 2023, indicating strong growth. Going forward, as profit margins improve, the return ratios are also expected to improve.

Financial Efficiency

ROCE	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	-424.50%	-337.10%	10.70%	-4.30%	5.80%
Easy Trip Planners	73.40%	55.80%	55.00%	61.90%	51.50%

ROE	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	28.80%	11.80%	25.20%	-6.20%	6.30%
Easy Trip Planners	43.20%	32.60%	37.50%	44.90%	36.20%

Source: Equitymaster

# Dividend

Ixigo doesn't pay any dividends to its shareholders.

Easy Trip Planners, on the other hand, pays dividends but not regularly. In the last five years, the company paid dividends only twice.

Its average dividend payout and dividend yield in the last three years is 9.4% and 0.2%, respectively.

Dividend

Dividend Per Share (Rs)	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	0	0	0	0	0
Easy Trip Planners	0	0	0.1	0.1	0

Dividend Yield	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	0.00%	0.00%	0.00%	0.00%	0.00%
Easy Trip Planners	0.00%	0.00%	0.50%	0.10%	0.00%

Dividend Payout Ratio	Mar-2019	Mar-2020	Mar-2021	Mar-2022	Mar-2023
Ixigo	0.00%	0.00%	0.00%	0.00%	0.00%
Easy Trip Planners	0.00%	0.00%	17.80%	10.30%	0.00%

Source: Equitymaster

# Valuation

The P/E and P/B ratios of Easy Trip Planners are 73.5x and 12.6x, respectively.

For Ixigo, the P/E ratio is 215x, whereas the P/B ratio is not available as the shares are just listed on the stock market.

Shares of Ixigo are overvalued when compared to Easy Trip Planners. If we compare the valuation with the five year average and industry, then Easy Trip Planners' shares are overvalued.

Valuations	Ixigo	5-Year Average	Easy Trip Planners	5-Year Average
P/E (x)	215	NA	73.5	65.8
P/B (x)	NA	NA	12.6	26.5

Source: Equitymaster

Which Travel Stock is Better: Ixigo or Easy Trip Planners?

In terms of profit growth, profit margins, and financial efficiency, Easy Trip Planners has outpaced Ixigo.

The company is offering end-to-end travel solutions and has grown primarily through acquisitions in the last few years.

Over the last few years, it ventured into hotels, holiday packages, rail tickets, bus tickets, and most recently into insurance.

It was the first company to come up with a convenience fee strategy, which helped the company reduce its discount costs.

The company has no significant capex planned but is always on the lookout for opportunities that could help the business grow.

Ixigo, on the other hand, has been in the travel industry for over 18 years now.

It is one of the leading OTA apps with high average monthly users and high downloads.

It is also the largest train ticket distributor with a largest market share of 51% and second largest bus-ticketing OTA with a market share of 12.5%.

The company offers a unique set of services such as PNR confirmation and predictions, train seat availability alerts, personalised recommendations, instant fare alerts and automated customer support services through AI.

It also ventured into insurance recently to expand its service offering.

Ixigo is planning to invest its IPO proceeds in cloud infrastructure and technology to offer better services to its customers and grow inorganically by acquiring undisclosed companies.

Both the companies are well established, and have good growth plans which can help them capitalise on the growing demand for tourism.

This is backed by the government's efforts to boost tourism, good infrastructure development, the rising influence of social media, and the growing need to experience new cultures.

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.