Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Easy Trip Planners Ltd (BOM:543272, Financial) reported a 178% year-on-year growth in the hotel and holiday package segment, highlighting successful diversification efforts.
- The company's Dubai operations have shown remarkable progress, reflecting successful international expansion.
- The launch of India's first meta search engine, Scan My Dotcom, is expected to empower OTAs and small service providers, enhancing the digital travel ecosystem.
- Easy Trip Planners Ltd (BOM:543272) has formed strategic partnerships, including an exclusive agreement with PhonePe, enhancing convenience for millions of users.
- The company was honored as the Best Online Travel Portal of India and won the Best OTA award at the Global Tourism Awards 2024, showcasing industry recognition.
Negative Points
- The company's PAT for Q2 FY25 reduced by almost half compared to the previous year, primarily due to increased marketing and employee expenses.
- Promoters have sold 25% of their stake since March 2023, raising concerns about insider confidence.
- The airline ticketing business faced pressure with a slight decline in take rates year-on-year, impacting overall profitability.
- There is a lack of clarity on the future contribution of new ventures like electric bus manufacturing to the company's top line.
- The share price has remained stagnant despite business growth, and there is negligible institutional investor interest.
Q & A Highlights
Q: The PAT for Q2 FY25 has almost halved compared to Q2 FY24. What are the reasons for this, and will the pressure continue? Also, why have promoters sold 25% of their stake since March 2023?
A: The PAT reduction is due to the addition of three subsidiaries, leading to increased employee and marketing expenses without corresponding revenue growth. Marketing expenses rose by 11 crores due to various promotions. Regarding promoter stake, the family remains committed, still holding over 50% of the company, aligning interests with shareholders.
Q: Is Easy Trip Planners considering another acquisition, and if so, is it related to the current business or a new venture?
A: Details about potential acquisitions will be disclosed after board discussions. Currently, no further information can be provided.
Q: Regarding the electric bus manufacturing business, will there be collaborations with existing companies, or will it rely solely on internal R&D?
A: We are leveraging available resources and have been in discussions with government agencies and private companies for electric bus supply. The focus is on meeting demand rather than reinventing the wheel.
Q: Despite business expansions and revenue growth, the share price remains stagnant. Why isn't Easy Trip Planners attracting institutional investors?
A: Share prices are beyond our control. The company focuses on delivering growth and profitability, both domestically and internationally. Institutional interest is not something we can directly influence.
Q: With the decline in margins due to one-off expenses, what can be expected for future margins?
A: We anticipate returning to average margins enjoyed over the past few years, as one-off expenses are not expected to recur.
Q: Will air travel remain the main revenue source, or will new segments like electric vehicles become significant contributors?
A: Over the next two years, air travel will remain the primary revenue source. The electric vehicle segment's contribution will depend on its growth trajectory.
Q: The standalone net profit has decreased by 45%, and the airline business segment profit is down. What are the reasons?
A: The decline is due to increased marketing expenses and competitive discounting in the airline segment. The take rate decreased slightly year-on-year but increased quarter-on-quarter.
Q: What is the rationale behind announcing a bonus issue, and how does it add value?
A: The bonus issue decision was made by the board, and specific details of the discussions are confidential. The bonus does not affect the overall value but is a strategic decision.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
