Le Travenues Technology Limited, the parent company of the traveltech startup ixigo, reported a consolidated net profit of INR 23.4 Cr in the fiscal year 2022–23 (FY23), indicating a sharp decline. This showed a robust post-pandemic comeback in the tourism industry and was a major improvement from the INR 21.1 Cr net loss in FY22. Let’s go into the details and find out what makes ixigo tick.
Credits: Inc42
Financial Rejuvenation:
Ixigo had a considerable increase in its consolidated net profit in FY23, going from INR 21.1 Cr loss in the prior fiscal year to INR 23.4 Cr profit. Travel demand has rebounded, as seen by the operational revenue, which jumped by an incredible 32% from INR 379.6 Cr in FY22 to INR 501.2 Cr in FY23.
As a travel aggregator, Ixigo’s main source of income is from the selling of travel-related services. The main sources of income are the convenience fees from bus, train, and airline ticket reservations as well as money from advertising services. From INR 369.3 Cr in FY22 to INR 487.9 Cr in FY23, domestic revenue grew significantly. ‘Export revenue services’ also experienced a roughly 30% YoY growth, reaching INR 13.3 Cr in FY23. Including interest income, excess provisions written back, and other non-operating income, ixigo’s total revenue stood at INR 517.6 Cr in FY23, a notable increase from INR 384.9 Cr in the previous fiscal year.
Operational Achievements:
Ixigo’s operational effectiveness was demonstrated in FY23 when it attained an EBITDA margin of above 7%. The company’s goal is to double the gross transaction value run rate to INR 10,000 Cr in the next two years, having attained that level in May 2023. As of March 2023, the ixigo group—which includes the ixigo, ConfirmTkt, and AbhiBus platforms—had more over 66 million monthly active users, demonstrating the strength of its user base.
Spending Breakdown:
Ixigo’s total expenses surged 1.2 times to INR 484.3 Cr in FY23, with employee costs being the largest contributor. Employee benefit expenses rose 1.3 times YoY to INR 126.3 Cr, of which INR 102.6 Cr was allocated to salaries and wages. Advertising and promotional expenses increased to INR 93.1 Cr, partly due to a new ad campaign featuring actors Jackie Shroff and Suniel Shetty. IT expenses also rose to INR 22.3 Cr.
Strategic Moves and Future Outlook:
Ixigo hopes to develop its business to INR 700 Cr this fiscal year, with a 40% revenue growth target in FY24. Even though SEBI approved Ixigo’s INR 1,600 Cr IPO in December 2021, the instability in the global equity market caused Ixigo to delay its listing plan.
Impact and Industry Dynamics:
The remarkable financial return of Ixigo is indicative of the travel industry’s resiliency in the aftermath of the pandemic. The company is well-positioned for long-term growth thanks to its emphasis on growing its user base, broadening its revenue sources, and optimizing operations.
Ixigo is in competition with MakeMyTrip, EaseMyTrip, and Yatra, three significant competitors in the travel sector. The company is well-positioned in the fiercely competitive market thanks to its ability to both recover from the obstacles provided by the epidemic and post a sizable profit.
Innovation and Future Prospects:
Ixigo’s introduction of the ChatGPT-powered ‘intelligent’ trip planner, PLAN, in July 2023 showcases its commitment to innovation. PLAN provides personalized recommendations, suggestions, and itineraries to travelers based on their current locations, enhancing the user experience and setting ixigo apart in the market.
Conclusion:
Ixigo’s financial recovery in FY23 is evidence of its flexibility and strategic acumen in negotiating the intricacies of the travel sector. Focusing on user experience, technology, and a variety of income streams, ixigo is well-positioned to thrive in FY24 and beyond. Ixigo’s success story is a source of hope for the tourism industry as a whole, as the sector continues to revive.
