Why did Easy Trip Planners snap its 2-days rally? Stock dips over 5.5%

At around 12.09 pm, Easy Trip Planners traded at ₹66.70 apiece down by 2.27% on BSE. But the stock has tumbled by at least 5.56% with an intraday low of ₹64.45 apiece on the exchange. It opened at a fresh 52-week high of ₹70.25 apiece.

From November 21 to 22, the stock climbed by over 43% on D-Street. Notably, the stock had turned ex-bonus and ex-split on November 21.

In its regulatory filing on Wednesday, Easy Trip Planners announced that the board approved the allotment of 130.37 crore equity shares having a face value of Re 1 each as fully-paid up bonus equity shares — in the ratio 3:1. Also, it said, the company will make necessary arrangements to credit the bonus shares/dispatch the share certificate, as applicable, on or before December 08, 2022.

Easy Trip had fixed November 22 to determine the eligible shareholders for both bonus issue and stock split.

Its bonus shares of 3:1 ratio meant the company will issue three new equity shares on every one existing share at a face value of Re 1 each. Also, the company announced a stock split of existing shares having a face value of ₹2 each into 2 equity shares of a face value of Re 1 each.

Following the bonus issue and stock split, Easy Trip Planners shares have been corrected on stock exchanges.

Also, a bulk deal was carried in Easy Trip Planners on NSE by investors like Arham Share Private Limited, Graviton Research Capital, Prathana Enterprises, and Niraj Rajnikant Shah. Together, these investors sold Easy Trip shares to the tune of ₹83.75 crore, while they cumulatively also bought shares aggregating to around ₹82.55 crore.

In a research note on November 21, when Easy Trip turned ex-bonus and ex-split, ICICI Direct had given a buy rating with a target price of ₹63 apiece. However, Easy Trip has already crossed this price level.

During Q2FY23, Easy Trip Planners clocked a net profit of ₹28.2 crore compared to ₹27.1 crore a year ago quarter. EaseMyTrip’s revenue from the operation crossed the highest level of ₹100 crore supporting its impressive growth story as one of the fastest-growing OTA players in India. Q2FY23 revenue came in at ₹108.5 crore rising by 91.5% yoy.

Furthermore, the company continued to garner robust growth, with Gross Booking Revenue (GBR) increasing by 121% year-on-year in Q2FY23 and 191% year-on-year in H1FY23. The GBR has increased to ₹1,977.7 crore from ₹895.1 crore in Q2FY22. GBR for H1 FY23 at ₹3,641 Crores almost equaled GBR of INR 3,716 Crores for the entire previous year.

Among key triggers for future performance in Easy Trip shares as per ICICI Direct are:

– Gross booking revenue (GBR) for H1FY23 was at ₹3,641 crore, which is equivalent to GBR for the full year FY22. With full resumption along with the company’s aggressive advertisement campaign to gain market share, the stock brokerage expects GBR to grow at 41.2% CAGR during FY22-25E

– Lean cost model and no convenience fee strategy remain key pillars supporting such rapid, profitable growth. This has also led to stickiness by customers with a healthy repeat transaction rate of ~86% in the B2C channel

– International expansion into the countries like UAE, Philippines, Thailand, and the US to help boost revenues, going forward

– Further benefits would accrue from high-margin segments like hotels (Traviate – B2B technology platform, Spree Hospitality – hospitality management company and bus booking segment (Yolo – intercity mobility platform)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.