ICICI Securities has upgraded Le Travenues Technology, the owner of Ixigo, to a 'Buy' rating, while lowering its target price to ₹180 from ₹200. The decision follows mixed quarterly results, where strong growth in train and bus bookings was offset by a slowdown in the air ticketing segment. Investors are focused on how the company balances heavy investments in new segments against current margin pressures.
Le Travenues Technology, the company behind the travel platform Ixigo, has seen a rating upgrade to 'Buy' by ICICI Securities. The brokerage, however, has revised its target price for the stock to ₹180 from the earlier ₹200. This update follows the company’s recent earnings, which highlighted a divergence in performance across its travel segments.
The company reported a 13.5% year-on-year revenue growth in the second quarter of fiscal year 2027, though revenue dipped 10% sequentially. The primary pressure came from the air ticketing division, where flight volumes fell 10% quarter-on-quarter. Reduced airline capacity and higher ticket prices have acted as headwinds for the aviation sector, impacting the company's air revenue, which dropped 7.5% year-on-year.
In contrast, the ground transportation business remained a key growth driver. Revenue from train bookings expanded 16% year-on-year, while the bus ticketing segment posted a 24% revenue increase. The company is also scaling its hotel segment, where the Gross Transaction Value rose 2.6 times compared to the previous year. While these areas are growing, the firm’s aggressive investments in artificial intelligence and its hotel expansion have led to a 17% contraction in EBITDA, excluding employee stock option expenses.
Following these results, ICICI Securities has lowered its financial projections. Revenue estimates for FY27 and FY28 were reduced by 7.1% and 6% respectively, and EBITDA estimates for the same period were cut by up to 22.9%. Despite these downward revisions, the upgrade to 'Buy' signals analyst confidence in the company’s underlying business model and its ability to monetize segments beyond air travel over the long term.
The Indian online travel aggregator sector remains intensely competitive, with major players like MakeMyTrip and EaseMyTrip holding significant market presence. Ixigo’s business model depends heavily on its dominance in train ticketing, which is closely linked to IRCTC. Investors typically watch for risks related to this dependency, as well as the high cost of acquiring customers in the fragmented hotel booking space. Managing these cash outflows while maintaining profitability will be a critical monitorable for the firm.
Moving forward, the key factor for investors to track will be the company's ability to improve its profit margins as its new business initiatives mature. Analysts will also look for signs of recovery in air traffic volumes, which would support the company's core revenue streams and help balance the investments made in other segments.