After a softer debut in March EaseMyTrip had a stellar run. Post a brief correction, the stock looks poised for interesting times ahead. In the special segment of ‘Moneycontrol Pro Ideas For Profit’, Moneycontrol.com’s Madhuchanda Dey gets more details on the company’s performance, going forward.
After a softer debut in March, EaseMyTrip had a stellar run. Post a brief correction, the stock looks poised for interesting times ahead.
All be the challenges posed by the deadly second wave of COVID the company managed to clock profits despite a lower business volume, thanks to its cost management.
The no-convenience fee model is difficult to emulate and has given it sticky loyal customers. Given that competitors are mostly loss-making they might not survive by not charging convenience fees. This along with agile management of cost seems to be the secret sauce for its success.
The other good news is that the recovery has been sharp. In the month of July, gross booking revenue was almost 63 percent of the first quarter, and the month of August seems to be doing better.
Should there be no severe third wave, the company may be in for a strong run in the second half.
The next area of focus is going to be the non-airline business, but it is open to inorganic opportunities given its cash-rich balance sheet.
While the stock is commanding a premium to its global peers despite its small size we feel that the company stands to benefit from the post-pandemic revenge travel as well as industry consolidation.
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(Edited by : Abhishek Jha)