EaseMyTrip IPO Financial Analysis (Subscribe)

Key Highlights of Easy Trip Planners (EaseMy Trip);

Wide distribution network through three distinct channels namely B2C, B2E, and B2B2C.
A strong relationship with many airline operators like Indigo, Spice Jet, and various hotel chains.
Consistent financial performance of the company in the last three fiscals however the pandemic has affected it negatively in Q4FY20.
Presence of many unorganized players in the tourism industry.

Business Profile

Easy Trip Planners Limited commenced its operations in the year 2008 as an online travel agency. The company is engaged in the sale of airline tickets, hotels and holiday packages, and other services like bus, rail tickets, and taxi rentals.

The company is launching Rs 510 crore IPO on 8^th March 2021. The company would not receive any proceeds from the offer as there is no fresh issue.

Easy Trip Planners Financial Review

Easy Trip Planners posted total revenue of Rs 81.47 crore for the 9 months ended 31^st Dec 2020. PAT was Rs 30.54 crore for the same period. The impact of COVID-19 has significantly reduced travel demand in terms of consumer sentiment and their ability to travel, which has caused airlines and hotels in India and around the world to operate at significantly reduced service levels. The negative impact is visible in the financial results for the nine months ended 31^st Dec 2020.

The Issuer’s consolidated revenues increased 20% to Rs 181.01 crore in FY20 from Rs 151.11 crore in FY19. PAT increased by 12.41% to Rs 32.98 crore in FY20. The financial and operating results in the fourth quarter of Fiscal 2020 were affected by the impact of the COVID-19 pandemic and the related lockdown measures introduced by the governmental authorities.

Operating and net margins are strong for the last three fiscals as can be seen from the table below.

Debt to equity is low at 0.98. The company has a strong return on net worth is 32.57%, 43.19%, and 15.04% for the last three fiscals.

Table 1 - EaseMy Trip Financials and Ratios (Amount in INR Crore)
Title	31-Dec-20 (Consolidated)	FY2020 (Consolidated)	FY2019 (Standalone)	FY2018 (Standalone)
Total Revenue	81.47	181.01	151.11	113.57
Revenue from operations	49.27	141.36	101.11	100.11
PAT	30.54	32.98	29.34	6.61
EBITDA	43.36	49.89	44.81	12.28
Total Assets	374.06	289.88	243.09	180.29
Cash and Bank	141.11	130.88	86.05	8.99
Cash generated from operations	48.59	33.45	81.52	20.21
EBITDA Margin	53.22%	27.56%	29.65%	10.81%
Net Margin	37.49%	18.22%	19.42%	5.82%

Valuation and Peer Comparison

Easy Trip Planners have no listed peers as per the RHP. The key online travel agencies in India include Make My Trip limited, ClearTrip Private Limited, and Yatra Online. As per RHP, Easy Trip Planners was the only player among the online travel agencies to record positive RoE and RoCE for the last three fiscals.

Considering the Issuer’s annualized EPS at 3.75, P/E is 50x at the upper price band of the offer. At NAV of Rs 12.16, the issue is priced at 15.38x (P/BV).

Future Outlook and Conclusion

Easy Trip Planners have been able to develop relationships across their portfolio of suppliers for airlines, hotels, holiday packages, buses, and taxis. The customer-centric approach of the company, user-friendly websites, and android, OS-based mobile applications as well as efficient marketing programs have contributed to developing significant market share in the domestic airline ticket business in India.

However, the travel and tourism sector has been significantly adversely impacted. A number of countries suspended flights or halted international travel in light of the COVID-19 pandemic. The gross booking revenues for the company decreased from Rs 3179.80 crore in the nine months ended December 31, 2019 to Rs 1220.76 crore in the nine months ended December 31, 2020.

The pandemic scenario has led to unprecedented levels of cancellations, customer refunds, and limited new air travel, hotel, and holiday bookings. This may continue until cancellations stabilize and travel demand begins to recover from current levels.

The vaccination drive in India is also a positive development. Despite the covid challenges, the company has reported revenue from operations of Rs 50 crore during 9 months ending 31^st Dec 2021 and a positive EPS of 2.81 per share. Thus, looking at the financial performance and the operating efficiency of the issuer, one may subscribe to the issue.

Reviewer recommends Subscribe to the issue.

Review By CA Priyanka Choudhary on 26th Feb 2021

Review Author

About CA Priyanka Choudhary

CA Priyanka Choudhary, a freelance chartered accountant

Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.

Email: [email protected]

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.