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Even though 2021 was a blockbuster year for tech companies’ initial public offerings (IPOs), the party didn’t last too long. In some cases, it never started. Multiple companies made their debut on the bourses—PayTM, Nykaa, Zomato, EaseMyTrip, CarTrade, Policybazaar—but most of their stock prices have been free-falling over the last two quarters. Except, maybe, for EaseMyTrip (EMT).

The online travel agency (OTA) has bucked the trend and then some, offering investors nearly 4X growth since it listed in March 2021. Over the last few months, brokerages have also ramped up their coverage of the company, with one clear message—buy. Upsides range from 10% to 75%.

The rally has been bolstered by EMT’s performance in the OTA sector. Currently sitting in second place with an 18% market share, EMT trails only MakeMyTrip (MMT). The latter is a Nasdaq-listed behemoth that controls more than half of the entire market, according to industry sources. Since it listed, EMT has turned in profits every quarter—a feat that none of its competitors, including the 22-year-old MMT, have managed. In 2018, EMT only had an 8% market share. Today, it has managed to double that. 

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Yatra disputes the B2C share given above.

When the pie is broadened to include corporate and travel-agent businesses, Yatra is almost neck and neck with EMT in the year ended March 2022 (11,413 and 11,706 gross bookings, respectively). Additionally, the share of other players such as Ixigo will also accordingly change.

When asked about operating profits, a spokesperson from MMT said, “We have reported operating profits in five of the past six quarters. The only negative quarter, in-between, was due to the second wave.”

It’s a good spot to be in for the entirely-bootstrapped EMT. “When it entered the OTA space, EMT took on giants like MMT and [Flipkart-acquired] Cleartrip heads on. Other players were largely backed by VCs and were PE funded; EMT was bootstrapped. The company’s focus was always to run a lean and profitable organisation,” Rahul Dani, research analyst at brokerage Monarch Network Capital, told The Ken. Now, these other players—Cleartrip, Booking.com, Yatra, and Ixigo—have settled into their roles as supplementary players. 

Humble beginnings

Established in 2008 by brothers Nishant, Rikant, and Prashant Pitti, EaseMyTrip (EMT) started out in the Pitti family garage. To go from that to a listed entity is a story fit for Bollywood, which isn’t lost on EMT—it produces movies, and even dabbled in coal for a while.

But EMT didn’t get to the top of the table just by sheer dint of its hard work. The company managed to carve a chunk of the OTA pie for itself by using a mix of innovative pricing and questionable user acquisition tactics—like the one where it exploited a loophole to redirect customers to its app on Android phones. 

AUTHOR

Shashwat Mohanty

Shashwat covers cleantech and internet. An alum of St. Xavier's College (Bombay), SCMC, and ACJ, Shashwat has previously worked at The Economic Times and Meesho. When he isn't missing deadlines, Shashwat likes attending live music gigs, discussing baseball, and watching Parks and Rec with his partner 🏳️‍🌈

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