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

Online travel platform Easy Trip Planners broke its two-day rally on Wednesday. However, while the stock opened on Dalal Street at a new 52-week high, it corrected to lose more than 5.5%. The stock shot up as much as 40% in the previous two sessions. The company’s board of directors today approved the allocation of shares under the bonus issue of the 3:1 ratio. Investors made gains as the stock hit a new 1-year high.

At around 12:09 am Easy Trip Planners traded 66.70 each a decrease of 2.27% on BSE. But the stock is down at least 5.56% with an intraday low of 64.45 each at the fair. It opened at a new high in 52 weeks of 70.25 each.

From November 21 to 22, the stock climbed more than 43% on D-Street. Notably, the stock had gone ex-bonus and ex-split by Nov. 21.

In its regulatory filing on Wednesday, Easy Trip Planners announced that the board has approved the allotment of 130.37 crore shares with a par value of Re 1 each as fully paid up. bonus shares — in the ratio 3:1. It also said the company will make the necessary arrangements to credit the bonus shares/ship the share certificate, if any, on or before December 8, 2022.

Easy Trip had set November 22 to determine eligible shareholders for both bonus issue and share split.

The 3:1 bonus shares meant that the company will issue three new shares for each existing share at a par value of Re 1 each. The company also announced a stock split of existing shares with a par value of 2 each into 2 shares with a par value of Re 1 each.

As a result of the bonus issue and share split, the shares of Easy Trip Planners have been corrected on the stock exchanges.

Also, a bulk deal was executed 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 for an amount of 83.75 crore, while also cumulatively purchasing shares for a total of approx 82.55 crores.

In a research note dated Nov. 21, when Easy Trip became ex-bonus and ex-split, ICICI Direct had issued a buy recommendation with a target price of 63 each. However, Easy Trip has already passed this price level.

During Q2FY23, Easy Trip Planners posted a net profit of 28.2 crore compared to 27.1 crore a year ago quarter. EaseMyTrip’s revenue from the operation exceeded the highest level of 100 crore in support of its impressive growth story as one of the fastest growing OTA players in India. Revenue in Q2FY23 was 108.5 crore up 91.5% yoy.

In addition, the company continued to deliver robust growth, with gross booking revenue (GBR) increasing 121% yoy in Q2FY23 and 191% yoy in H1FY23. The GBR has been increased to 1,977.7 crore of 895.1 crore in Q2FY22. GBR for H1 FY23 om 3,641 Crores was almost equal to GBR of INR 3,716 Crores for the entire previous year.

According to ICICI Direct, some of the main triggers for future performance in Easy Trip stocks are:

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

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

– International expansion to countries like UAE, Philippines, Thailand and USA to help increase revenues in the future

– Further benefits would come from high margin segments such as 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 brokerage firms, and not of Mint.

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