Why did EaseMyTrip shares skyrocket 18% today? Here’s the reason

Synopsis:: EaseMyTrip shares surged 18% amid strong investor interest driven by FII stake acquisition, a proposed Rs 500 crore fundraise, and robust Q3 performance. Strong growth in Dubai operations and hotel bookings signals diversification beyond air ticketing, boosting sentiment despite high valuation multiples compared to industry peers.

The shares of this company, which is a fast-growing company that offers a comprehensive range of travel-related products and services for end-to-end travel solutions, including airline tickets, hotel and holiday packages, rail tickets, and bus tickets, had its shares in focus after they jumped 18% today and 35% in two trading sessions.

With a market cap of Rs 3,335 crore, the shares of Easy Trip Planners Ltd jumped 18 per cent in today’s trading session and reached a high of Rs 9.38. When compared to its previous day’s closing price of Rs 7.92, the shares are trading at a PE of 127 compared to its industry PE of 44.2. 

FII stake acquisition 

Craft Emerging Market Fund PCC, through Citadel Capital Fund, buying 2 crore shares (0.5% stake) worth Rs 13.54 crore, is an indication of selective institutional buying in the online travel industry. The acquisition price of Rs 6.77 per share shows purchases at relatively lower levels, which may be value-based in the mid/small-cap segment.

In the case of Easy Trip Planners, institutional buying can help in changing market sentiment and perceptions of liquidity. The travel sector is structurally connected to the growth of tourism and technology adoption, and this stake acquisition may be an indication of expectations of sustained recovery or stabilisation of margins in the competitive online travel sector.

Rs 500 crore fund Raising 

EaseMyTrip has also announced plans to raise up to Rs 500 crore of equity or other eligible securities, which indicates a proactive approach to capital management to fuel growth. This equity raise, which can be done through QIP, rights issue, preferential allotment, or other permissible methods, indicates the company’s desire to enhance its financial flexibility during the expansion phase. 

This equity raise seems to be growth-focused, aiming to fuel high-growth business areas like hotels and holiday packages, besides continuing investments in technology and platform development.

In terms of strategy, this equity raise seems to be in line with EaseMyTrip’s overall vision to further enhance its integrated travel ecosystem and move beyond the air ticketing business. EaseMyTrip has already been a profitable and bootstrapped company, and this equity raise seems to be a move to tap into the growing demand in the non-air business areas and international markets. 

If done effectively, this equity raise could help EaseMyTrip improve its competitive positioning, supply chain partnerships, and long-term value creation, though equity issuance could cause short-term dilution for the existing equity base.

Financial performance highlights 

EaseMyTrip maintained its operational pace with gross booking revenue increasing to Rs 2,213 crore, driven by its solid global adoption and the swift growth of the hotel and holiday business. Revenue from operations improved sequentially, while EBITDA rose 15% QoQ with margins at 8.6%, which is a testament to the company’s better operating efficiency, despite the competitive intensity in the travel technology industry.

It is important to note that EaseMyTrip’s Dubai business registered a sharp 133% YoY increase, while hotel bookings also rose 84% YoY, which is a clear testament to the company’s successful diversification strategy, which has moved beyond air ticketing.

EaseMyTrip’s recent rally reflects improving fundamentals, institutional confidence, and a forward-looking growth strategy. While the stock trades at a premium valuation relative to industry peers, strong international performance, rapid non-air segment expansion, and planned capital infusion position the company for scalable growth. However, investors should monitor execution risks and potential dilution from the proposed fundraise.

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