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Hotels Scaling Up; Near-term Margin to Remain Investment-led

IXIGO delivered mixed Q2FY27, with GTV rising 22% YoY to INR 53.0 Bn, led by strong Flight and Bus growth, while revenue grew 13% YoY to INR 3,210 Mn as lower Flight monetisation weighed on conversion. Hotels remained the key growth engine, with GTV/revenue up 159%/528% YoY and gross take-rate above 12%; The management expects triple-digit Hotel growth over the next four quarters and the segment to become a top-two GTV contributor over the next 4–5 years. Direct supply has expanded to >12,000 hotels, supporting further scale and take-rate improvement towards 16–17% over time. However, management plans INR 10– 12 Cr of incremental Hotel investment over the next couple of quarters, implying limited near-term operating leverage. Flight remains a near-term drag amid elevated fare and constrained capacity, while Bus should sustain share gains. Accordingly, we maintain our ‘ADD’ rating on IXIGO, valuing the company at 35x the average of FY28E/FY29E EPS to arrive at a target price of INR 190, implying an upside of 20.3% from current level.

Revenue and EBITDA Miss Estimate; Record PAT Driven by Stake Sale

* IXIGO reported Q2FY27 revenue of INR 3,210 Mn (vs CIE est. of INR 3,272 Mn), reflecting a growth of 12.9% YoY and decline of 10.0% QoQ

* EBITDA came in at INR 181 Mn (vs CIE est. of INR 218 Mn), down 25.9% QoQ due to higher investments in the Hotel OTA business. EBITDA margin came in at 5.6%,(vs CIE est. at 6.7%), down 120 bps QoQ

* Adjusted PAT without the impact of stake sale in Freshbus (INR ~406 Mn) for the quarter came in at INR 228 Mn (vs CIE est. INR 227 Mn), up 757% YoY. Adjusted EPS for the quarter came in at INR 0.45

GTV Growth Outpaces Revenue; Hotel OTA Emerges as Key Growth Driver

IXIGO reported 22% YoY growth in GTV to INR 53.0 Bn in Q2FY27, led by a strong performance in the Flight and Bus segments, which grew 37% and 32% YoY, respectively. However, revenue from operations grew at a relatively slow pace of 13% YoY to INR 3,210 Mn, indicating moderation in overall monetisation. Gross take-rate in the Flight segment declined to 7.0% from 9.4% in Q2FY26, while the Train segment improved to 6.5% from 5.7%. Bus take-rate remained stable at 11.2%. The decline in the Flight OTA take rate was attributed to higher base fares and a higher share of international bookings, which weighed on overall monetisation. Hotels emerged as IXIGO’s fastest-growing business by GTV, which increased 159% YoY to INR 1,113 Mn and revenue growing 528% YoY to INR 81 Mn. The business reported a gross take rate of over 12%, with more than 86% of bookings coming from captive users. We believe the Hotel OTA segment will remain a key revenue growth driver, supported by low online penetration of approximately 10–15% in the budget hotel category, relatively limited competition and the potential to improve take-rates through deeper direct supply relationships.

Near-term Profitability to Remain under Pressure:

Consolidated contribution margin remained broadly stable at 39.0% in Q2FY27 as compared to the same period last year. Contribution margin increased 14% YoY to INR 1,248 Mn, while EBITDA margin declined to 5.6% in the quarter, reflecting continued investments to scale-up the hotel OTA segment. While strong growth in hotels and improving scale are encouraging, sustained investments in customer acquisition and expansion could limit margin improvement in the near term

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