Le Travenues Technology Ltd (IXIGO) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to Le Travenues Technology, also known as Ixigo, Q2 FY '27 earnings call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Anmol Garg from DAM Capital Advisors. Thank you, and over to you, sir.
Anmol Garg (DAM Capital Advisors): Thank you, Iqra. Good evening, everyone. On behalf of DAM Capital, I welcome you all to Ixigo's Q2 FY '27 earnings call. We have with us Mr. Aloke Bajpai, Chairman, MD, and Group CEO of the company; and Mr. Saurabh Devendra Singh, Group CFO of the company. Now before I hand over the call to Aloke and Saurabh, I would like to highlight the safe harbor statement on the second slide of the presentation, and it is assumed to be read and understood. I now hand over the call to you, Aloke. Thank you, and over to you.
Aloke Bajpai (Le Travenues Technology Ltd): Thank you. Good afternoon, everyone, and thank you for joining our Q2 FY '27 earnings call on what is technically a long weekend, and I'm assuming many of you have booked your long weekend this time using Ixigo, Confirmtkt, or AbhiBus. At Ixigo, our ambition is to build the best customer experience for travel. We build our business by understanding where a journey becomes stressful, and then using technology to give people more certainty and peace of mind. Once we prove our ability to deliver peace of mind, we have seen that it builds customer loyalty and trust. This quarter, we have made progress across the business in quite different market conditions across these lines of business. Trains recovered with some of the base effect of
Aloke Bajpai (Le Travenues Technology Ltd): Changes starting to go away, buses continue to grow strongly and secularly, and hotels took a great leap forward, getting to a critical mass that makes it large enough to start disclosing. Flights faced a tougher external environment with higher fares and limited capacity affecting bookings growth, and the overall market was down nearly 6% in volumes terms in the quarter. Despite that, the team pulled off 7% segment growth, which in itself is an achievement. In Q2 FY '27, we delivered resilient growth on quarterly GTV as well of 5,304 crores, up 22% Y-o-Y, and revenue from operations of 321 crores, up 13% Y-o-Y. Our PAT was an all-time high, aided by our partial sale of stake in Freshbus. Flight and bus led the quarter with GTV growth of 37% and 32% Y-o-Y respectively. From this quarter onwards, we are also disclosing a new line of business of hotels, which grew GTV 2.6x Y-o-Y to 111 crores, with a gross take rate of more than 12%. Before Saurabh takes you through the numbers in detail, let me deep-dive a bit by each line of business and give some color on the choices we are making for the next phase of growth. The recovery in trains was encouraging. Advance bookings for Dussehra and Diwali helped volumes, and we stepped up our focus on growth again while maintaining healthy unit economics. However, we want to see that momentum continue beyond the festive season before calling it a sustained recovery. I also want to call out that Confirmtkt now has a 4.9 rating on the Google Play Store, and among the apps which have a scale of over 100 million downloads, it has become the highest rated travel app in the world that operates at this kind of scale. For us, that is a meaningful endorsement from the travelers we serve. We're also expanding our relationship with travelers beyond the ticket, food on trains, metro tickets, and our new Bharat Darshan rail packages offerings, these have enhanced our ixigo trains app, where we are able to serve more parts of the journey. In buses, AbhiBus has been growing faster than the overall OTA bus market for close to 3 years. Expanding supply, building our brand in markets where we have room to grow, and improving the travel experience continue to drive that performance. Our new Women Zone is a good example of how we are improving this experience. It helps women traveling alone make more informed choices through ratings from other women, information about seats next to other women, and other women-friendly features that build trust for making operator choices and seat choices with more confidence. Flights remains challenging in the near term as capacity has not returned as quickly as we had expected, and we are seeing the impact of oil prices reflect on the 30% increase in fares Y-o-Y on several routes. International travel has been more encouraging, with our international flight GTV growing 59% year-on-year. Let me spend a little time on hotels because we see a significant opportunity to build our next major business here. We are disclosing hotels in the same level of detail as other businesses now because product-market fit is emerging, and the business has become more material. This reflects our growing confidence even as we recognize that we're still early in this journey. We now do more than 5,100 room nights per day net of cancellations, 4.7 lakh room nights for the quarter, a growth of 3.9x compared to last year, and a growth of over 50% versus the comparable Q1 number. In Q2, hotel GTV reached 111 crores, up 39% sequentially and 2.6 times year-on-year. Revenue grew more than sixfold year-on-year to 8.1 crore, and our gross take rate exceeded 12% and became the highest in our business. Contribution margin improved from minus 55% of revenue a year ago to minus 15%, with a contribution loss of 1.2 crores this quarter. The reason why our unit economics is able to develop some headroom is more than 86% of our hotel bookings came from travelers which were already on our platforms or our captive users. Having said that, as we said in the past, we will not be shy of continuing to invest in growing hotels as a strategic category for our business, and aspire to remain the fastest growing OTA in our country in this line of business as well. The TAM of the hotels opportunity is proven in India, and it is the largest profitability pool globally for OTAs. ixigo's opportunity is particularly compelling in the budget, mid-market, and independent hotels, where online penetration is low and travelers need greater reliability and peace of mind. About 60% of hotel room nights in India sell below 2,000 a night, and independent hotels account for 73% of rooms, as per the recent Videc industry report. Out of the 70,000 hotels in India that we sell, we are now tied up directly with over 12,000 hotels across about 1,100 towns, up from 10,000 hotels last quarter. Our thesis on hotels fits our customer base closely. 94% of our transactions involve travel to or from tier 2, 3, 4 cities, which aligns well
Aloke Bajpai (Le Travenues Technology Ltd): Tier 2 and 3 cities and more than 9 in 10 trips we sell are by train or bus. Many travelers looking for an affordable room are already booking their journey with us. Our aspiration remains to become the largest player serving this part of the hotel market over the next 4 to 5 years. The size of the opportunity supports that ambition. We get estimates India's hotel market at about ₹1.57 lakh crore in FY '26 projected to reach ₹1.94 lakh crore by FY '28. Lodging represents as much as 30% of total travel spending. Hotel bookings through OTAs are projected to grow around 19% annually from ₹40,200 crore to ₹57,000 crore over that period. Hotels is already the second largest hotel OTA category around three times the size of the OTA rail market. These estimates may still understate the opportunity particularly in non-hotel accommodation that remains largely offline. Building this business requires investment. Much of our spending on hotels, product, technology and people sits in the group cost below contribution margin. So the segment contribution loss captures only a small part of what we are investing and Saurabh will explain this in more detail in a bit. Our core business profitability gives us gives us the capacity to keep funding this opportunity. We have an existing customer base and we are now going to expand the direct supply and as the unit economics start to come in, there is a lot of work to be done ahead in order to drive repeat business and achieve reliable stays, build strong direct supply, better fulfillment and support when things go wrong and we need to build peace of mind products in this category as well. Our ambition is to become the largest player serving this part of the market and over the next 4 to 5 years we believe we can achieve that ambition. We will continue to calibrate our investment based on that progress and the long-term returns that we see. Across the group AI is helping us improve our service and productivity even as we continue to invest further in enhancing our capabilities with it. Tara handled 45 lakh queries before and after the booking and now resolves 94% of chat queries without human intervention and 82% of customer calls end-to-end. AI handled queries more than doubled year-on-year while customer service costs did not rise in proportion. That is already giving us greater capacity to serve travelers as we grow. We also remain conscious of the advances that consumer AI agents could bring to travel discovery and booking. Our platforms are already available as natively integrated apps on ChatGPT and we are continuing to build on ixigo next our own agentic AI products and voice-first experiences. We believe that in a world where AI agents develop the potential to do consumer bookings on behalf of the customer there is an opportunity to become the most contextually aware AI agent for travel for our users. In fact we demoed a fully agentic booking flow complete with payments at the recently concluded GFF conference in Mumbai and we await regulatory clarity before launching the same. Further we want to stress again on this that we will differentiate our company by actually building the best peace of mind products for our travelers and using AI to solve their real-world problems more meaningfully to by building those relevant products suited for our market. For example, our recently launched Smart Lock product for flights is a perfect example of using AI to build better experiences. Smart Lock is an agentic AI product that finds and locks the cheapest flights based on preferences. You can tell it your route, budget, travel preferences. It scans the air fares 24/7 and locks the first flight that fits within that budget and matches your preferences. If nothing matches by the time scanning ends, you get your full premium back in ixigo money right away. Finally, a word on FreshBus. We are proud to have backed the team early. Reducing our stake now reflects our focus on being an asset-light tech and distribution platform and the lessons from that investment that we learned now helps us to service bus operators with more understanding on the unique opportunities and challenges that EV-based bus operators face. FreshBus remains a valued commercial partner and Saurabh will explain about the exceptional gain portion separately in a bit. As we look ahead, our priorities are very clear. Strengthen our core business, continue the acceleration of our hotel trajectory to keep gaining share and continue investing in building AI platforms to improve both customer experience and productivity. We will keep balancing these opportunities with the responsibility to deliver long-term returns for our shareholders. Thank you to our customers, partners, teams and shareholders for your continued trust. With that let me hand over to Saurabh who will take you through the numbers.
Saurabh Devendra Singh (Le Travenues Technology Ltd): Good afternoon and thank you, Aloke. I'll start with the headlines. Now this was a quarter of growth in the core business, a deliberate step up in investment and also a quarter where the
Saurabh Devendra Singh (Le Travenues Technology Ltd): need to be read carefully given the impact of a significant one-off. Now, all figures are in rupees crore unless specified otherwise. And year-over-year comparisons would be Q2 FY27 against Q2 FY26. Passenger segments grew by more than 11% to 3.98 crore. GTV grew 22% to 5,304.47 crore. Revenue from operations grew 13% to Rs. 320.96 crore, and contribution margin grew 14% to Rs. 124.86 crore. Adjusted EBITDA was Rs. 23.58 crore against Rs. 28.48 crore a year ago, down 17%. Reported PAT was Rs. 63.42 crore, but this includes an exceptional gain, which, like always, I will discuss in the end. Let's go to business lines. Trains had some recovery, and thus we shifted from conserving margins to leaning on growth. Passenger segments grew, rose about 7% year-over-year to 2.9 crore. Revenue grew 16% to 149.14 crore, and contribution margin grew 29% to 47.23 crore. CM is at 32% of revenue. Our share of the OTA rail market is now close to 64%. Now, buses continued to compound. GTV grew 32% to 752.65 crore, revenue grew 24% to 81.04 crore, and contribution margin grew 27% to 43.14 crore. CM is at 53% of revenue. Flights were, as Aloke had mentioned, flights were the difficult part of the quarter, something we had also flagged in August. Capacity cuts and very high fares held the booking back. GTV grew 37% on the back of higher fares, but revenue fell 8% to 82.66 crores, and the contribution margin fell 10% to 35.68 crore. Gross take rate fell from 9.4% to 7% as the base fare and the international mix increased. With fewer bank offers in the market, we funded more discounts, which is why, and that is the base in this, which is why the contribution margin, as a share of revenue, held at 43%. As Aloke has already mentioned, October started softer than we would like, with capacity not yet back. We had indicated that we would share more about the hotel business as it evolved, and with growing confidence in the product-market fit, we are following through on that commitment this quarter, as you might have already guessed from Aloke's section. Now, hotels reported Hotels are now reported as a separate segment where GTV grew 2.6 times to 111.34 crore, with approximately 4.7 lakh room nights and a gross take rate of over 12%. The segment reported a loss of 1.21 crores, compared to a loss of 0.71 crores in the comparable quarter. Now remember, across quarters we will prioritize different lines where we will invest, and in this quarter we have prioritized people and technology for this segment. And according to management estimates, we would have spent a further 10 crore in the people and technology line for hotels, taking the total investment in hotels to slightly north of 11 crore this quarter. We began consolidating Brevistay this quarter, so part of this growth is inorganic. Now, below contribution margin, adjusted EBITDA went down 17% from 28.48 crores to 23.58 crores. Other income was 22.08 crore against 5.17 crores a year ago, now reflecting the treasury income, and it is excluded from adjusted EBITDA. On the balance sheet, the total cash and cash equivalent, including fixed deposits and mutual funds and net of borrowings, is about 1,831.71 crores. Operating cash flow of the year was 76.44 crore against 91.55 crores last year. Now, in the disclosures, we have made We have made three changes. Hotels is a separate segment, food on train services have been moved into trains, and Brevistay is consolidated within within hotels. We have restated earlier periods on the same-to-same basis.
Saurabh Devendra Singh (Le Travenues Technology Ltd): to cover a lot of these. Now, one of the questions which has been asked quite frequently and has been on the use of capital on the balance sheet, especially the inorganic part. Now, I would say something which we have said before that we would pursue selective acquisition where there is a strategic fit, strong team, technology, or distribution synergy, and reasonable pricing. Now, as we have said before, whenever something crystallizes, we will inform the markets right away. I'll get on to the last section, which is the one-offs and the call-outs that were there in Q2 FY '27, which included the sale of a stake in Freshbus on August 13, resulting in a one-time gain of ₹40.66 crore. Share of loss from Freshbus and Squats, which have been associate companies, till Freshbus was an associate company, was 2.49 crores. The one-offs and the call-outs that were there in Q2 FY '26 included a one-time ESOP accounting charge of 26.93 crore on account of early achievement of performance thresholds specified in the grant terms and share of loss of Freshbus, which was an associate company then, of 1.47 crore. With that, I would pass it to the moderator.
Moderator: Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: First question is from the line of Mr. Anmol Garg from DAM Capital Advisors. Please go ahead.
Anmol Garg (DAM Capital Advisors): Yeah. Hi. Thanks, thanks, Aloke and Saurabh, for your comments. I have few questions. Firstly, if I look at, revenue per ticket in flights, it has been reduced by 13-14% over the average of let's say 5-6 quarters. So, this time we have given higher discounts, that's, that's how it looks like it. So is it something which will continue going ahead in, as a form of market share gain, or this is something that we have done it only, sort of for this quarter?
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