Neutral Le Travenues Technology Ltd for the Target Rs 180 by Motilal Oswal Financial Services Ltd
Revenue/GTV in line; margin/earnings below est
* Ixigo reported a resilient performance in 2QFY27, with revenue growing 13% YoY to INR3,210m (our est.: INR3,226m), while GTV increased 22% YoY to INR53,045m (our est.: INR52,583m).
* Contribution margin increased 14% YoY to INR1,249m. EBITDA stood at INR181m (our est. INR296m) and margin was 5.6% (our est. 9.2%).
* Adjusted PAT stood at INR228m (our est.: INR283m). Reported PAT reached an all-time high of INR634m, aided by the partial sale of Ixigo’s stake in Freshbus.
* We expect a CAGR of 19%/42%/46% in revenue/EBITDA/PAT over FY26-29. We value the stock at 38x FY29E EPS to arrive at a TP of INR180 and maintain our Neutral rating as we believe margin and profit could remain under pressure amid continued investments in new initiatives.
* Flight and bus businesses’ GTV increased 37% and 32% YoY, respectively, and higher airfares and limited availability of confirmed train tickets continued to support intercity bus demand.
* Ixigo continued to strengthen its customer experience through AI-led assistance while expanding distribution through train-booking integration with Uber and food delivery partnerships across railway stations.
* Aggressive investments in hotel and technology hit margins and earnings.
Building scale across hotels, buses and digital travel solutions
* In 2Q, Ixigo strengthened its AI capabilities and hotel business, driving platform expansion and improving customer experience and operating efficiency.
* TARA resolved 94% of chat queries and ~82% of customer calls autonomously, while Ixigo’s advanced agentic AI, voice-first experiences and Smart Lock flight product enhance customer experience and operating efficiency.
* Hotel GTV reached INR1,110m (~26x YoY), with ~470k room nights and 12k+ direct hotel tie-ups across ~1,100 towns; management targets leadership in the budget-to-mid-market hotel segment over the next 4-5 years.
* Bus GTV/revenue grew 32%/24% YoY, supported by expanding supply, operator partnerships and product innovation, with management expecting healthy contribution margins.
* Train GTV/revenue grew 7%/16% YoY, with online rail market share reaching ~64%. The company is expanding ancillary offerings through food-on-train, metro ticketing and Bharat Darshan packages.
* Despite 37% GTV growth, flight revenue declined 8% amid elevated fares, capacity constraints and lower take rates. International flight GTV grew 59% YoY, while management remains cautious on near-term demand.
* Hotel investments stood at ~INR110m, with quarterly spending of INR100- 120m expected over the next couple of quarters. Adjusted EBITDA declined 17% to INR236m.
* We believe that over the next 4-5 years, the bus and hotel segments will emerge as the top two segments.
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