Business and financials
Easy Trip Planners provides bookings of air tickets, hotels, buses, and trains. The company has 9.6 million registered customers and a network of close to 60,000 travel agents. Close to 90% of the company’s revenue is from the sale of air tickets while the remaining is from booking of hotel rooms. It has tie-ups with most of the domestic airlines and 23 hotels aggregators. Due to these tie-ups, the company provides attractive deals to travellers and does not charge a convenience fee to customers.
The company’s total income grew by 26.2% annually between FY18 and FY20 to Rs 181 crore while net profit rose by 51.8% to Rs33 crore.
Valuation
It has no direct listed peer. Based on annualised earnings, the IPO is vaued at a price-earnings (P/E) multiple of 49.9. The online travel agency industry has low entry barriers. Besides, the competition has been fiercer after the COVID-19 pandemic from organised as well as unorganised sector. It would affect the profitability in the medium term as the travel agents tend to sacrifice a certain portion of their margins and fees charged during bookings to secure more sales volume. In addition, the outlook for India’s travel industry is less encouraging. According to the rating agency
, due to the outbreak of the Coronavirus, India’s travel industry is expected to contract by 2% annually between FY20 and FY23. In the context of these factors, the issue looks fully priced and therefore investors may wait for a few more quarters to see whether the company is able to sustain its past growth track.
Issue Details
Issue dates: March 8-10, 2021
Issue Price: Rs186-187
Issue Size: Up to Rs 510 crore
Lot size: 80 shares
