Easy Trip Planners, an online travel agency that went public in March this year with a Rs. 510 cr IPO saw an impressive subscription of 159 times. However, it had a muted listing given weak market conditions.
Nonetheless, the company is one of the very few profitable entities in the industry. Since its listing on 19 March 2021, the stock has rallied around 200% to Rs. 600. This makes the issue the third-largest gainer among all the IPOs listed in 2021 so far.
Strong financial performance, operational efficiency, easing of travel restrictions, vaccination drives, and expansion of international presence are a few reasons key to the rally.
Easy Trip Planners has incorporated wholly-owned subsidiaries in Thailand, the Philippines, and the US. And much like others belonging to specific sectors, Easy Trip Planners expects to benefit from a massive pent-up demand for travel globally.
Analysts also believe that cost rationalisation, increasing disposable incomes of travellers, and enhanced penetration of travel into lower-tier towns would be the drivers of growth for the travel company.
Easy Trip Planners has declared about 85% growth in FY 2021 profit. And this is despite lower bookings due to the pandemic. A reduction in operational expenses was also instrumental.
More recently, in Q1 FY 2022, the travel company recorded a ~518% hike in the profit at Rs. 15.4 cr despite the second wave. During the quarter under review, their revenue surged 425.6% y-o-y to Rs. 18.7 cr.
Considering the stellar rate at which the stock has rallied so far and also its P/E multiple of 115.16 times, Easy Trip Planners looks expensive in the short- to medium-term. However, with the revival of the travel industry, the stock price is expected to climb even higher.
The price is pegged to reach up to Rs. 820-880 in the short term and Rs. 1,000 in the next 6 to 8 mth, i.e. medium term. Garg of CapitalVia Global Research has an overall positive outlook on the stock given the company’s 65.5% return on capital employed (ROCE).