Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Easy Trip Planners  / Equity Capital Markets

<p>Established in 2008, <a href="https://www.smartkarma.com/entities/easemytrip" target="_blank" data-smartkarma-citation="entities:28897:1" rel="noopener">EaseMyTrip (0896537D IN)</a> is an online travel agency (OTA) in the Indian market. The company has filed for a $72.1m IPO with SEBI, making it the first<a target="_blank"> OTA </a>to be listed on the Indian stock market. EaseMyTrips’ local peers, <a href="https://www.smartkarma.com/entities/yatra-online-inc" target="_blank" data-smartkarma-citation="entities:25997:1" rel="noopener">Yatra Online (YTRA US)</a> and <a href="https://www.smartkarma.com/entities/makemytrip-ltd" target="_blank" data-smartkarma-citation="entities:23580:1" rel="noopener">Makemytrip Ltd (MMYT US) w</a>ent public a few years ago, but on the NASDAQ. The issue is managed by Axis bank and JM financial and the pricing details are yet to be out. We have looked at the company’s background and its business model comparing it with its local peers. Based on our analysis, we believe that the company could see strong short-to-medium-term growth, although the reason for selling out the company at a time when high growth rates are expected appears questionable. Our key points are:</p><ul>
<li>The company has been in the market for nearly twelve years but has only captured around 3% of the market. MakeMyTrip captures nearly half of the market letting the other players fight for the rest. Yatra who joined the market five years after MakeMyTrip has 14% of the market. Thus, although the market opportunity for EaseMyTrip looks strong, and the company’s short-to-medium term growth prospects look attractive, we feel that competition in the industry is significant and is likely to slow growth for followers like EaseMyTrip over the longer term.</li>
<li>EaseMyTrip has moved from B2B2C to B2C and is starting to focus more on B2E which is a quickly growing channel for the company. The company’s strategy to focus on B2E is likely to prove key over the long term having observed negative reviews from customers on the company’s airline booking service. Moreover, the current growth momentum seems to be mainly coming from the Holiday Packages segment rather than from Airline Ticketing. Thus, we feel that B2E and Holiday packages are likely to be key long term drivers for the company.</li>
<li>IPO proceeds will go to the owners and no new shares will be issued. Although the company is debt-free and might not necessarily need funds for working capital management, investments for sustained growth and market share seem necessary. The question we have is why the owners are selling the company when growth prospects are looking extremely attractive and financial performance has been better (net profits and double-digit growth rates in revenue) than peers in the recent FY?</li>
</ul>

Established in 2008, EaseMyTrip (0896537D IN) is an online travel agency (OTA) in the Indian market. The company has filed for a $72.1m IPO with SEBI, making it the first OTA to be listed on the Indian stock market. EaseMyTrips’ local peers, Yatra Online (YTRA US) and Makemytrip Ltd (MMYT US) went public a few years ago, but on the NASDAQ. The issue is managed by Axis bank and JM financial and the pricing details are yet to be out. We have looked at the company’s background and its business model comparing it with its local peers. Based on our analysis, we believe that the company could see strong short-to-medium-term growth, although the reason for selling out the company at a time when high growth rates are expected appears questionable. Our key points are:
The company has been in the market for nearly twelve years but has only captured around 3% of the market. MakeMyTrip captures nearly half of the market letting the other players fight for the rest. Yatra who joined the market five years after MakeMyTrip has 14% of the market. Thus, although the market opportunity for EaseMyTrip looks strong, and the company’s short-to-medium term growth prospects look attractive, we feel that competition in the industry is significant and is likely to slow growth for followers like EaseMyTrip over the longer term.
EaseMyTrip has moved from B2B2C to B2C and is starting to focus more on B2E which is a quickly growing channel for the company. The company’s strategy to focus on B2E is likely to prove key over the long term having observed negative reviews from customers on the company’s airline booking service. Moreover, the current growth momentum seems to be mainly coming from the Holiday Packages segment rather than from Airline Ticketing. Thus, we feel that B2E and Holiday packages are likely to be key long term drivers for the company.
IPO proceeds will go to the owners and no new shares will be issued. Although the company is debt-free and might not necessarily need funds for working capital management, investments for sustained growth and market share seem necessary. The question we have is why the owners are selling the company when growth prospects are looking extremely attractive and financial performance has been better (net profits and double-digit growth rates in revenue) than peers in the recent FY?


EaseMyTrip IPO: A Debt-Free Small Player In a Growing Industry But All IPO Shares Are Secondary