Easy Trip: Roadblocks or Reward for Shareholders?

Easy Trip, a popular online travel platform, offers flight, hotel, holiday package, rail, bus, and cab bookings. The company stands out with a strong repeat transaction rate of 94%. However, the last year hasn't been smooth: revenue dipped slightly by 0.7% to ₹5.8 billion and margins have come under pressure, with EBITDA margin shrinking by 1080 basis points to 26.7% due to rising expenses. Despite these challenges, profit after tax (PAT) margin stayed firm at 18%, inching up by 100 basis points, resulting in a PAT increase of 5.8% to ₹1.0 billion. This shows Easy Trip managed to keep profits stable even as costs climbed. The company is veering into new territory, investing in premium intercity mobility and bus manufacturing (including electric buses), with plans to operate thousands of electric buses by FY28. Such diversification, though ambitious, is worrying some shareholders. The expertise needed for manufacturing and the capital commitment (₹2 billion over 2-3 years for R&D and plant setup) may pose risks, especially given minimal current contribution from its corporate travel business. To strengthen profitability, Easy Trip plans to cut discounts and grow its non-air verticals, aiming for double-digit growth in the corporate segment. Partnerships with OLX India and CARS24 are intended to boost marketing and digital outreach. Valuation-wise, the stock trades at a P/E of 29x—considerably lower than its historical median and below key competitors. This discount reflects investor caution due to strategic and operational headwinds, as well as a 43% drop in share price year-to-date. For shareholders, Easy Trip presents a mixed bag. Stable profits and new ventures could yield upside, but aggressive diversification and margin pressures may weigh on returns. Prudent monitoring is essential—too many detours can slow down the journey to sustainable growth.