EasyMyTrip is a structurally challenged business going through a painful margin reset. The stock has corrected 39% in a year and trades at ~3× book despite a loss year. We are watchlist-only at current levels — the data does not yet support a buy thesis. This article explains why.
1. The Business: What EasyMyTrip Actually Does
Easy Trip Planners Ltd, listed as EASEMYTRIP on both NSE and BSE, operates under the brand EaseMyTrip — an online travel aggregator (OTA) offering air tickets, hotels, holiday packages, rail & bus bookings, travel insurance, visa processing, and activity/attraction passes.
It is India's second-largest OTA by market share, trailing only MakeMyTrip. The company was founded in 2008 by Nishant Pitti and Rikant Pitti and listed on Indian exchanges in March 2021 through a successful IPO that was oversubscribed 159×.
For much of its post-IPO life, EMT was considered a rare profitable OTA — a distinction that made it a favourite among retail investors and small-cap funds. That story has now changed decisively.
2. Revenue: Growth Has Stalled
EMT rode the post-COVID travel boom impressively. Revenue went from ₹138 Cr in FY21 to ₹591 Cr in FY24 — a compounded growth of ~63% over three years. That run is now over.
| Year | Revenue (₹ Cr) | Expenses (₹ Cr) | Op. Profit (₹ Cr) | OPM % | Net Profit (₹ Cr) |
|---|---|---|---|---|---|
| FY20 | 141 | 131 | 10 | 7% | 33 |
| FY21 | 138 | 61 | 78 | 56% | 61 |
| FY22 | 235 | 102 | 133 | 57% | 106 |
| FY23 | 449 | 273 | 176 | 39% | 134 |
| FY24 | 591 | 381 | 210 | 36% | 103 |
| FY25 | 587 | 442 | 145 | 25% | 109 |
| FY26 | 536 | 552 | -17 | -3% | -48 |
Source: Screener.in | Consolidated figures
In FY26, revenue fell 9% to ₹536 Cr. More critically, expenses for the first time exceeded revenue — clocking ₹552 Cr against ₹536 Cr of income. This is not a bad quarter. This is a full-year structural problem.
Between FY23 and FY26, EMT's revenue grew by only 19% (₹449 Cr → ₹536 Cr) while expenses grew by 102% (₹273 Cr → ₹552 Cr). The company doubled its cost base without doubling its revenue. This is the single most damning data point in the entire report.
3. Margins: A Four-Year Collapse in Slow Motion
EMT's operating profit margin in FY21 and FY22 was a stunning 56–57% — exceptional even by global OTA standards. That was partly a pandemic-era anomaly (lean cost structure during lockdowns) but the underlying business quality was genuinely strong.
Then came aggressive expansion — hotels, holidays, franchise stores, marketing spends, international tie-ups. None of it translated into durable revenue growth. OPM went: 57% → 39% → 36% → 25% → -3%.
4. Shareholding: The Promoter Exit Signal
When promoter holding falls 22 percentage points in 2.5 years — from 65.54% in Sep 2023 to 43.56% in May 2026 — it is one of the most powerful warning signals available to an equity investor. This is not routine dilution. This is sustained, consistent selling.
| Period | Promoters | FII | DII | Public |
|---|---|---|---|---|
| Sep 2023 | 65.54% | 2.30% | 2.42% | 29.74% |
| Sep 2024 | 50.38% | 2.50% | 2.64% | 44.47% |
| Mar 2026 | 47.72% | 1.42% | 2.30% | 48.57% |
| May 2026 ★ | 43.56% | 6.16% | 2.10% | 48.17% |
★ May 2026 data reflects latest available disclosure
However, one counter-signal stands out: FII holding jumped from 1.42% in Mar 2026 to 6.16% in May 2026 — a ~4× surge in a single quarter. This level of institutional accumulation at distressed prices either signals smart money spotting a turnaround, or a block deal by a strategic investor. Either way, it is worth monitoring closely.
Also concerning: 25.8% of promoter holding is pledged. In a falling stock, pledge-calls can trigger forced selling — creating a feedback loop that accelerates the stock's decline.
5. Return Ratios: The Most Damning Chart
ROCE (Return on Capital Employed) is perhaps the cleanest measure of whether a business is creating or destroying value. EMT's ROCE trajectory is one of the sharpest declines seen in any Indian listed company over a four-year window:
At 0.63% ROCE, EMT is essentially employing ₹1,208 Cr of total assets to generate near-zero returns. That's capital destruction, not capital allocation.
6. Cash Flow: Where Did the Money Go?
Operating cash flow turned negative in FY26 at -₹4 Cr, and free cash flow collapsed to -₹118 Cr. The company has been spending heavily on fixed assets (now ₹205 Cr vs ₹37 Cr in FY23) — a 5× jump in capex over three years that hasn't yet translated into revenue.
Debtor days at 186 means the company waits over six months to collect dues. For a travel business that takes payment upfront from customers, high debtor days point to settlement delays from airline/hotel partners — a structural inefficiency in working capital management.
7. Peer Comparison: How EMT Stacks Up
| Company | CMP | P/E | MCap (Cr) | ROCE % | Qtr NP (Cr) |
|---|---|---|---|---|---|
| IRCTC ★ | ₹528.60 | 30.6× | 42,288 | 46.1% | 326.6 |
| TBO Tek | ₹1,225 | 54.9× | 13,304 | 18.0% | 60.1 |
| BLS International | ₹261.10 | 15.7× | 10,751 | 29.3% | 186.9 |
| Thomas Cook India | ₹93.86 | 19.8× | 4,415 | 14.8% | 30.7 |
| EasyMyTrip ◀ | ₹6.74 | N/A (Loss) | 2,686 | 0.6% | -15.4 |
| Yatra Online | ₹98.84 | 30.8× | 1,551 | 7.2% | 8.2 |
At ₹2,686 Cr market cap, EMT is more expensively valued than the market data suggests. It trades at ~3× book value with zero earnings — a premium only justified if investors believe in a strong earnings recovery. Meanwhile, IRCTC (46% ROCE, consistent profitability, government moat) is the clear sector leader by every quantitative metric.
8. Bull vs Bear: The Complete Picture
- Almost debt-free (₹35 Cr borrowings)
- ₹172 Cr investments on balance sheet
- FII stake jumped 4× in one quarter
- India's travel market to double by 2030
- 2nd largest OTA — brand moat intact
- Stock down 39% YoY — mean reversion possible
- 5Y sales CAGR still at 31%
- First-ever annual loss in FY26
- OPM collapsed from 36% → -3%
- Promoter holding down 22pp in 2.5 years
- 25.8% promoter holding pledged
- FCF at -₹118 Cr in FY26
- Debtor days at 186 — worsening
- Trades at 3× book with no earnings
9. Watchlist Triggers: When to Revisit?
We are not recommending a buy at current levels. However, EMT is a legitimate watchlist candidate if the following conditions are met:
Two consecutive profitable quarters would signal the expense rationalisation is working.
Reduces forced-selling risk and signals improved founder confidence.
Would indicate better working capital management and cash generation.
If the May 2026 FII accumulation was strategic, sustained buying would validate the recovery thesis.
EasyMyTrip's story is a cautionary tale of post-IPO expansion gone wrong. From being a rare profitable OTA with 57% margins, the company has entered a loss cycle driven by an aggressive but poorly calibrated cost expansion. The promoter selldown and pledge situation add an additional layer of risk that most retail investors underestimate.
At ₹6.74, the stock reflects significant pessimism — but not enough to make it a value buy yet. India's travel boom will continue; the question is whether EMT can survive long enough to benefit from it. Watchlist at current levels. Accumulate only on confirmed margin recovery.
Comments
Post a Comment