Online travel booking platform Ixigo, which went public last month, reported a 20% year-on-year (YoY) increase in its operating revenue to Rs 164.8 crore for the quarter ending March 2024. During this period, its net profit rose by 55% to Rs 7.3 crore.
For the fiscal year 2024, Ixigo’s net profit more than tripled to Rs 73 crore, up from Rs 23 crore in FY23. Revenue from operations grew by 31% YoY in FY24, reaching Rs 655.8 crore.
“Our growth strategy relies on our ability to monetize our large user base incrementally every year through innovations in our ancillary/value-added services and better cross-selling and upselling within our ecosystem,” said Aloke Bajpai, Ixigo’s cofounder and group CEO.
Bajpai also pointed out the slowing growth in the flight booking segment over the last two quarters of FY24.
“Currently, the domestic flight market is capacity-constrained, operating at very high fare levels. The last couple of quarters have seen single-digit year-on-year growth in passenger capacity as well as take rate compression to levels seen only pre-Covid,” he said.
The company’s revenue growth in the fourth quarter was slower due to the slowdown in air travel and reserved train ticketing segments. However, Ixigo’s group chief financial officer, Saurabh Singh, said, “We were one of the faster-growing players in the OTA (online travel aggregator) space that quarter, so we don’t see 20%+ growth as slower growth in the OTA space, which is projected to grow at around 18% CAGR over the next five years.”
“Having said that, we must remember that for flights, the market grew at single-digit percentages during this quarter, and take rates contracted due to supply constraints and higher airfares. Additionally, there was hardly any growth in the reserved train ticket market,” he added.
The company’s management also noted that during the fourth quarter, they compromised on margins to prioritize growth.
“There is a fine balance between making more margins and taking more market share in cyclical businesses like ours. Depending on seasonality and overall market growth potential at that time, that call could be different. During that particular quarter on both flights and trains, we prioritized growth over contribution margin expansion and managed to grow much faster than the market,” Singh said.
Looking ahead, Bajpai said that the company would continue its strategy of inorganic expansion and would be on the lookout for acquisitions. Ixigo has so far acquired the train ticketing platform ConfirmTkt and the bus reservation app AbhiBus.
“In addition to the organic growth of our OTA platforms, we have a track record of inorganic growth through strategic acquisitions that supplement our business verticals and strengthen our leadership in the ‘next billion users’ market segment,” Bajpai said.
“We intend to focus on identifying founders and teams who are keen on customer satisfaction, have crossed the product-market fit stage, demonstrated sustained growth and resilience, built companies with technology intensity and capital efficiency, and whose offerings either strengthen one of our existing verticals or add a complementary vertical for our future objectives,” he added.
