Buy Ixigo Ltd for the Target Rs.217 by Motilal Oswal Financial Services Ltd.
Domestic multi-brand OTA scaling to new heights
* Le Travenues Technology (Ixigo) is the second-largest online travel agency (OTA) in terms of FY26 gross transaction value of INR187b, (includes flight~75b, Train:83b, Bus:26b and others:3b), with a monthly active user base of 85m largely coming from Tier-2 and Tier-3 towns. Notably, it is a market leader among OTAs in train ticketing with a market share of ~60% and is also consolidating its position in flight and bus ticketing.
* Ixigo’s differentiated multi-app, multi-brand strategy has enabled it to strengthen consumer engagement at a structurally lower customer acquisition cost. Its user base is widely distributed across lower-tier markets, with ~94% of bookings having either origin or destination in non-tier-1 cities, highlighting strong penetration beyond metro markets.
* Over time, the engaged user base of its train segment, which is the largest contributor in GTV (~44%: FY26), naturally converts into transaction customers across flights, trains, buses, and ancillary services, creating a high-conversion, lowCAC funnel, supporting profitable and scalable growth.
* The Indian travel market, valued at ~INR3.8t, is expected to expand at a CAGR of 9.0% over FY23-28E, (as per F&S report) Within this, the OTA segment is likely to expand at a faster CAGR of ~18% and reach INR2.8t from INR1.2t due to the focus of players on improving supply quality and customer demand for value-added services available on their platforms.
* We estimate Ixigo to deliver a CAGR of ~23%/59%/51% in revenue/EBITDA/PAT and grow its overall GTV by 22% during FY26-28E and EBITDA margin is expected to improve by 400bp to 10% by FY28E on the back of operating leverage and potential reductions in operating expenses. We initiate coverage on Ixigo with a Buy rating and a TP of INR217. We value the company at 55x P/E on FY28E EPS, indicating a 24% upside.
* We estimate flight/train/bus GTV to clock a CAGR of 22%/17%/34% and a 22% CAGR in overall GTV over FY26-28E.
* Ixigo has established a competitive edge through its superior app experience and customer service in commoditized price parity driven OTA market.
* AI-led initiatives: PLAN -- provides Generative trip planner, which creates personalized itineraries, travel discoveries and real-time recommendations; TARA -- AI multilingual chatbot handling automated customer support and solve queries; Crowd-sourced info and utility features -- provides live train running status, PNR predictions, train reviews, etc.; Flight Tracker Pro -- offers real-time updates on flight delays, terminals, gates, check-in counters, etc.; and Bus insights -- View of booked bus.
Acquisition and partnership-led growth model
* Acquisitions remain a key growth lever for Ixigo, as it has strengthened its position in the train and bus mobility ecosystem while broadening its reach in tier-2 and below markets.
* Ixigo’s acquisition-led, multi-brand strategy has enabled it to build category leadership across key travel use-cases (rail, bus, ancillary services), deepen penetration in underpenetrated markets, and create a broader ecosystem that improves cross-selling opportunities, customer retention, and long-term monetization.
Valuation and view
* We expect Ixigo to deliver a CAGR of ~23%/59%/51% in Revenue/EBITDA/PAT over FY26-28E and expect flat contribution margins amid growth investments (discounts, branding expenses, distribution costs, and performance marketing). In the longer run, as the scale of operations expands, operating leverage will support margin expansion. We expect margins to reach ~10% by FY28E from ~6% at the end of FY26.
* We estimate a flight/train/bus GTV CAGR of 22%/17%/34% and an overall GTV CAGR of 22% over FY26-28E.
* We expect Ixigo’s contribution margin in flight/train/bus to stabilize at 40%/ 30%/51%. We initiate coverage on Ixigo with a Buy rating and a TP of INR217. We value the company at 55x P/E on FY28E EPS, indicating a 24% upside potential.
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