This company has ranked 2nd in terms of booking volume and 3rd in terms of Gross booking revenues for the FY20.
Easy Trip (NS:) Planners
This is one of the few e-commerce companies that does not have very high leverage and is backed with a cash flow. Its DE ratio is 17% and Interest Coverage of almost 100x keeps away bankruptcy risk.
The company is one of India’s leading travel agencies, with ancillary to travel operations like bus, taxi booking, and travel insurance. Though currently, a significant chunk of their revenues is from airline booking.
The company has recently strengthened its presence in Tier II & III cities, which is also the geography with the recent spike in airport construction and air travel. Unlike other e-commerce companies, this has a promoter shareholding of 75%. In the past quarters, the public shareholding has reduced from 21.77% on Dec 21 to 19.35% on Jun 22 (which is looked at as a sign of holding concentration and there is a correlation between reducing public shareholding and increasing stock returns)
Trading at 74.1x PE (trailing) seems expensive however at the high growth rate of 43.2%. They have remained profitable in each of the past 10 quarters (even March 2020) backed with positive operating cash flow their reserves have grown to Rs. 196 Cr (Book Value =Rs 239 Cr)
Compared to Aviation Cos
All listed aviation companies (yes, including Indigo) have high debt and very low-interest coverage (if they make any profits). In the recent past India has seen many airports being built in Tier II & III cities, fueling aggressive growth in Indian domestic air travel. We strongly believe to benefit from this uptick in demand, we are better off owning a more substantial business with a higher growth rate than investing in aviation companies.