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Core MarTech Growth Sustains; H2 Recovery in Focus

RATEGAIN reported a soft Q2FY27, with revenue declining 5% QoQ due to seasonality and a FIFA-led Q1 spike, while rising 153% YoY to INR 7,454 Mn, largely driven by Sojern consolidation; underlying organic growth remained healthy at 14%. Properties and Destinations sustained over 20% organic growth in H1FY27, offsetting Corporate weakness and subdued Distribution. EBITDAM stood at 20.5%, while Adjusted EBITDAM reached 22.7%, within guidance, supported by acquisition synergies and AI-led efficiency. The management retained FY27 guidance, targeting revenue at the upper end of INR 30,000– 31,000 Mn and Adjusted EBITDAM of 22.5–23.5%. H2 growth is expected from seasonal recovery in Destinations, Corporate improvement and crossselling. Sojern and Adara integration, APMEA expansion, Smart Distribution monetisation and AI-led efficiency underpin growth and profitability.

Revenue, EBITDA & PAT Misses Estimate

* Revenue for Q2FY27 stood at INR 7,454 Mn, down 5.0% QoQ but up 152.7% YoY (vs CIE est. of USD 7,833 Mn)

* EBITDA for Q2FY27 came in at INR 1,530 Mn, down 10.8% QoQ but up 185.5% YoY (vs CIE est. of INR 1,692 Mn). EBITDAM was down 130 bps QoQ but up 236 bps YoY to 20.5% (vs CIE est. of 21.6%)

* PAT for Q2FY27 stood at INR 747 Mn, down 21.3% QoQ but up 45.8% YoY (vs CIE est. of INR 913 Mn), due to low other income

Steady MarTech Expansion; Diversified Growth Drives H2 Outlook:

RATEGAIN reported Q2FY27 revenue of INR 7,454 Mn, up 153% YoY, largely reflecting Sojern consolidation, while organic growth stood at 14%. Properties and Destinations sustained over 20% organic growth in H1FY27, together contributing to over 80% of MarTech revenue, while Corporate (~15% of MarTech) remained subdued, declining ~14%. DAAS grew 7% YoY in Q2, taking H1 growth to 14%, led by traction across Air, OTA and Car. Distribution remained flat, although Smart Distribution is gaining initial traction with over 800 directly contracted properties. APMEA new sales exceeded USD 2 Mn, over 3x YoY. We expect H2 growth to strengthen, driven by Corporate stabilisation, seasonal recovery in Destinations and sustained cross-selling, supporting the management's revenue guidance of INR 30,000–31,000 Mn

Adj. EBITDAM Guidance Intact; AI-led Efficiency Supports Growth Investments:

EBITDAM stood at 20.5%, down 130 bps QoQ, while adjusted EBITDAM came in at 22.7%, supported by Sojern-Adara integration, sharedservice consolidation and AI-led efficiency. The management retained FY27 Adj. EBITDAM guidance of 22.5–23.5%, with incremental efficiency being reinvested in commercial capabilities and customer relationships. Having repaid 43% of the original Sojern acquisition debt, RateGain remains on track to become net debtfree by FY28. We expect operating synergies and AI-led productivity gains to support margin resilience while funding growth investments.

View & Valuation: We remain constructive on RATEGAIN’s medium-term outlook, supported by core Martech growth, cross-selling synergies & expanding platform monetisation. While Corporate recovery and Distribution ramp-up remain key monitorables, diversified growth drivers & operating efficiency underpin sustainable growth. We retain our ‘BUY’ rating with a TP of INR 1,185.

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