Ixigo Parent Company Shares Plunge 20% Despite Revenue Growth
Le Travenues Technologies Ltd., parent of Ixigo, reported Q2 FY2024 results with 37% YoY revenue growth to ₹282.70 crore. However, EBITDA turned negative at -₹3.60 crore, and net profit declined to -₹3.46 crore. Despite operational improvements, including a 23% increase in Gross Transaction Value to ₹4,347.50 crore, the stock fell 17.32% to ₹268.50. Prosus recently invested ₹1,295 crore for a 10% stake at ₹280 per share, planning to increase holdings to 16%.
*this image is generated using AI for illustrative purposes only.
Le Travenues Technologies Ltd., the parent company of travel aggregator Ixigo, experienced a significant stock price decline following the release of its September quarter results. Despite reporting revenue growth, the company's shares fell sharply, reflecting investor concerns over profitability.
Financial Performance
The company reported mixed financial results for the September quarter:
| Metric | Q2 FY2024 | Q2 FY2023 | YoY Change |
|---|---|---|---|
| Revenue | ₹282.70 crore | ₹206.35 crore | +37.00% |
| EBITDA | -₹3.60 crore | ₹17.87 crore | -120.14% |
| Net Profit | -₹3.46 crore | ₹13.08 crore | -126.45% |
Despite the strong revenue growth of 37% year-on-year, Le Travenues Technologies faced challenges in maintaining profitability. The company swung from an EBITDA profit of ₹17.87 crore in the same quarter last year to a loss of ₹3.60 crore this quarter. Similarly, the net profit turned negative, with a loss of ₹3.46 crore compared to a profit of ₹13.08 crore in the previous year.
Operational Highlights
The company's operational metrics showed positive trends:
- Gross Transaction Value (GTV) increased by 23% to ₹4,347.50 crore
- Flight GTV rose by 29%
- Bus GTV surged by 51%
- Train GTV grew by 12%
Le Travenues Technologies also reported improved contribution margins and a positive operating cash flow of ₹91.50 crore, indicating some operational efficiencies despite the bottom-line challenges.
Market Reaction and Stock Performance
The market reacted strongly to the financial results:
- Shares fell by 20% following the announcement
- Closing price: ₹268.50, down 17.32% for the day
- Year-to-date performance remains positive, with the stock up 50%
Strategic Investment
In a significant development, Prosus, a global consumer internet group, has shown strong interest in Le Travenues Technologies:
- Recent investment: ₹1,295 crore for a 10% stake
- Investment price: ₹280 per share
- Future plans: Prosus intends to increase its holding to 16%
This strategic investment by Prosus, despite the current quarter's losses, suggests confidence in the company's long-term prospects and business model.
Looking Ahead
While the September quarter results have raised concerns about profitability, Le Travenues Technologies' strong revenue growth and operational improvements indicate potential for future recovery. The company's ability to grow its gross transaction value across various segments demonstrates its strong market position in the travel aggregator space.
Investors and analysts will likely closely watch the company's performance in the coming quarters, particularly focusing on its ability to convert top-line growth into profitability. The strategic investment by Prosus could provide additional resources and expertise to help navigate the challenges and capitalize on growth opportunities in the dynamic travel tech sector.
As the travel industry continues to recover post-pandemic, Le Travenues Technologies' performance will be a key indicator of the broader trends in the online travel booking market in India.
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