Why Easy Trip Planners Share Price is Rising

Welcome to the daily edition of stocks made easy.

Regular readers of this column turn to us for business and investment insights.

In case you missed it:

• 5 Adani Stocks Worth Looking
• 10 EMS Stocks Targeting 20% Growth
• PG Electroplast vs Amber vs Epack Durables
• Another Elcid Investments in the Making?

Without wasting anytime, let's move on to today's trending stock - Easy Trip Planners.

Easy Trip Planners: Travel & Tourism Sector's Power Play

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.

One company that's doing things differently with a proper business model is 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.

The company also recently ventured into charter solutions through its subsidiary Nutana Aviation Capital.

Meanwhile, it has a presence in the insurance sector as well through its subsidiary, EaseMyTrip Insurance Broker Private.

Last week on Friday, share price of Easy Trip Planners soared over 8%, fuelling expectations for a further rally.

Let's find out why the stock price is rising and what lies ahead.

Why Easy Trip Planners Share is Rising

#1 New Franchise Store

The recent rally comes after the company launched its first franchise store in Jabalpur, Madhya Pradesh.

This strategic expansion adds to the company's growing network of retail stores under its successful EaseMyTrip Franchise programme.

This also marks the 20th store unveiled under the company's flagship program.

Note that Easy Trip Planners is on an expansion spree, planning to add more such stores by end of FY25.

A month ago, it had launched a franchise store in Bhubaneswar, Odisha. Before that, EaseMyTrip.com announced the grand opening of its first franchise store in Hyderabad, Telangana.

The ambitious franchise programme aims to establish 100 retail stores by FY25.

Why is this significant though?

Well, offline presence is becoming a game-changer in India's retail landscape. A great example is the Tata Group's Zudio, which has witnessed tremendous success with its offline expansion.

From just 80 stores in 2021, Zudio is set to reach 559 stores by 2025, reflecting an impressive CAGR of 63%. Today, it has a presence in 164 cities and continues to thrive in the highly competitive retail sector.

For Easy Trip Planners, this offline push represents a similar growth strategy, tapping into untapped markets and enhancing its brand visibility. As the company continues to expand, it's positioning itself as a formidable player in the travel and retail ecosystem.

#2 Bonus Shares

The other reason why shares of Easy Trip Planners are in focus these days is because the company recently fixed record date for its 1:1 bonus share issue.

Easy Trip Planners has fixed 28 November 2024 as the record date for determining shareholders eligible for the issuance of bonus shares.

This bonus was approved in October 2024.

This will be Easy Trip's third instance issuing bonus shares. It had earlier issued bonus shares in the ratio of 3:1 in November 2022. Before that, it issued bonus shares in the ratio of 1:1 in March 2022.

Note that investors consider bonus shares as a sign of confidence as after the adjustment, the stock appears "cheaper" due to the lower price per share. This often attracts retail investors, increasing demand and potentially pushing the stock price up in the short term.

Apart from that, there's also some underlying tax benefits... the long-term tax is only levied on the original purchased shares and the ones that company gives in the form of bonus become exempt. At least that's the general understanding... but tax slabs keep changing.

Highlights from the Most Recent Earnings Call

Easy Trip recently posted its earnings for the quarter ended September 2024.

During the quarter, the company posted flat revenues while EBITDA margins came at 28%.

Profit for the quarter fell sharply to Rs 260 million (m), from Rs 460 million reported in the same quarter last year.

Nevertheless, the company reported strong cash flow from operations at Rs 580 million.

The company's numbers for the non-air business were off the charts. It witnessed significant growth in the hotel and holiday packages segment, achieving 178% year-on-year (YoY) growth with gross booking revenue of Rs 2.4 billion (bn).

The company's total hotel bookings reached 2.2 lakhs, marking a 75% YoY growth.

On the initiatives front, Easy My Trip introduced India's first metasearch engine, ScanMyTrip.com.

It also signed a memorandum (MoU) signed with Uttar Pradesh Ecotourism Development Board to promote ecotourism.

Meanwhile, during the quarter, Easy Trip also tied up with PhonePe and Bank of Baroda.

While all this is good, the launch of its electric bus project is noteworthy. It was recently reported that the company is foraying into the EV bus segment with Easy Green Mobility.

Projecting the electric bus sector to grow at a CAGR of 24% from FY2024 to FY2030, the company is projecting strong revenue contribution from this space.

In 2024 so far, shares of the company have underperformed. This can be due to increased competition in the industry, higher discounting in the airline ticketing business, among other factors.

Nevertheless, Easy Trip is projecting the second half of this year to be better as travel trends tend to improve in the second half.

Here's a table showing the company's financials -

Financial Snapshot - Easy Trip Planners

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	1,414	1,385	2,354	4,488	5,906
Growth (%)	-	-2%	70%	91%	32%
Operating Profit	572	902	1,474	1,936	2,296
OPM (%)	40%	65%	63%	43%	39%
Net Profit	330	610	1,059	1,342	1,031
Net Margin (%)	23%	44%	45%	30%	17%
ROE (%)	32.6	46.2	53.2	44.3	21.2
ROCE (%)	52.3	62.1	62.7	51.6	28.1
Dividend (Rs)	0.0	0.1	0.1	0.0	0.1
Debt to Equity (x)	0.1	0.1	0.2	0.2	0.0

Source: Equitymaster

As can be seen in the table above, the company has remained debt free or had negligible debt all these years. This is quite impressive for a company operating in the travel sector.

Over the last few years, it has 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.

Easy Trip Planners is also expanding into medical tourism, a sector expected to grow rapidly. The board has already approved acquisitions worth Rs 900 million, including investments in Rollins International and Pflege Home Healthcare.

These investments, in sectors outside traditional travel, reflect the company's strategy to diversify its business and explore new growth areas.

How Easy Trip Planners Share Price has Performed Recently

In the past 5 days, Easy Trip Planners share price has gained 9%.

In 2024 so far, the stock is down 21%.

Easy Trip Planners has a 52-week high of Rs 54 touched on 8 February 2024 and a 52-week low of Rs 28 touched on 23 October 2024.

In the past 1 year, shares are down 18.2%.

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

Comparative Analysis

Company	Easy Trip	Le Travenues	TBO Tek	Wise Travel	Yatra Online
ROE (%)	21.2	19.5	46.2	24.5	-1.0
ROCE (%)	28.1	14.9	47.3	28.7	3.7
Latest EPS (Rs)	0.5	1.9	18.6	9.8	1.2
TTM PE (x)	64.3	73.1	81.6	19.1	91.9
TTM Price to book (x)	8.5	9.3	15.3	2.9	2.2
Dividend yield (%)	0.3	0.0	0.0	0.0	0.0
Industry PE	57.1
Industry PB	12.2

Source: Equitymaster

For a detailed analysis, check out Easy Trip's 5-year factsheet.

Happy Investing!

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...