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Travel Boom Fuels OTA Revenue
India's outbound tourism is surging, with 3.3 crore Indians traveling abroad in 2025, signaling a shift in spending where travel is becoming a regular expense, not just a treat. This trend boosts the revenue of online travel aggregators (OTAs). These digital platforms manage bookings for flights, hotels, and trips. As they handle more transactions, their operational efficiency and cost management are key. The sector's success now depends not only on capturing this demand but also on showing a clear way to grow profitably.
Margin Squeeze Despite Volume Growth
Easy Trip Planners (EaseMyTrip) highlights the sector's margin pressure. In Q3 FY26, revenue rose 0.7% year-on-year to ₹151.7 crore, and gross booking revenue grew substantially to ₹2,213.2 crore. However, net profit dropped sharply by 90% year-on-year to ₹3.4 crore. This happened because costs increased faster than revenue, severely squeezing profit margins. While flight bookings are its main business, an 84% YoY jump in hotel and holiday bookings shows a shift towards offerings with better profit potential. International operations, especially in Dubai, grew revenue by 133.2%, suggesting future profit recovery. Still, the stock price has fallen 45.2% in the past year.
Le Travenues Technology (Ixigo) reported strong profit growth of 54% to ₹24 crore on a 31% revenue increase to ₹317.6 crore in Q3 FY26. Its gross transaction value reached ₹4,902.9 crore. This growth was driven by solid flight bookings and increasing use from Tier II and III cities. Ixigo's strategy combining trains, flights, and buses diversifies its revenue and reaches a wider market. International flight bookings now make up over 20% of its flight GTV. Despite this progress, Ixigo faces a high valuation challenge, trading at a Price-to-Earnings (P/E) ratio of roughly 139.5x. This is far above the Indian Hospitality industry average of 26.7x and its peers' average of 32.5x.
TBO Tek saw revenue surge 85.8% year-on-year to ₹784 crore in Q3 FY26, helped by acquiring Classic Vacations and expanding into North America. Net profit grew 8% to ₹54 crore. The B2B platform is focusing on direct sourcing for better margins, and expected operational efficiency could boost EBITDA. However, TBO Tek's P/E ratio is around 48.69x as of March 27, 2026, higher than the industry median. MarketsMojo rates it a 'Sell' due to valuation concerns and past regulatory scrutiny.
Indian Railway Catering and Tourism Corporation (IRCTC) posted steady results with revenue up 18.2% to ₹1,449 crore and net profit up 15.5% to ₹394 crore in Q3 FY26. Its internet ticketing segment remains dominant, handling nearly 89% of reserved rail tickets booked online. IRCTC is expanding revenue from other services, with UPI transactions now over 50% of its payments. The company trades at a P/E ratio of about 29.34x, considered reasonable for its sector and lower than some peers. It also shows strong return ratios (ROCE 49.0%, ROE 37.2%).
Valuations and Competitive Landscape
Valuations for these travel sites vary widely, reflecting different views on their growth and profit potential. Easy Trip Planners trades at a trailing twelve-month (TTM) P/E ratio of about 81.6x, a high premium for a company with recent net losses, suggesting investors are betting heavily on future growth. Le Travenues Technology (Ixigo) is valued even higher, with a TTM P/E around 139.5x, making it one of the most expensive stocks in the hospitality sector. TBO Tek trades at a P/E of approximately 48.69x. In contrast, IRCTC has a more moderate P/E of about 29.34x, supported by strong profitability metrics like ROCE of 49.0% and ROE of 37.2%. This shows the market is focused on sustainable profit over sheer volume growth.
Globally, the travel industry faces challenges like geopolitical tensions and possible flight disruptions, which could affect travel costs and demand from key markets. In India, while domestic tourism is strong, especially in smaller cities and religious destinations, inbound travel is still recovering. This global backdrop adds risk, particularly for companies heavily dependent on international outbound travel or facing fierce local competition. The industry is also seeing a trend towards more flexible and convenient trip planning, favoring platforms that offer integrated booking solutions.
Risks and Concerns for Leading OTAs
Despite the travel boom, significant challenges remain for several companies. Easy Trip Planners' negative TTM earnings and high P/E of 81.6x are concerning, particularly after MarketsMojo downgraded it to a 'Strong Sell' rating due to weak financials and poor technical indicators. The company's push into higher-margin hotels and holidays is vital but hasn't yet boosted profits, contributing to a 45.2% share price drop over the past year.
Le Travenues Technology (Ixigo), while growing profits, carries a heavy valuation. Its P/E of approximately 139.5x is very high, exceeding industry averages and its own estimated fair value. This suggests it's priced for perfection and could be vulnerable if its aggressive growth strategy falters, especially in the bus segment where it prioritizes market share over immediate profit.
TBO Tek faces its own risks despite optimistic growth forecasts. Its P/E ratio of 48.69x is high compared to industry peers. The company has also faced regulatory scrutiny, including a notice from the Enforcement Directorate. MarketsMojo rates it a 'Sell', citing expensive valuation and worsening technicals. Integrating Classic Vacations adds complexity and longer booking cycles that might delay full benefits.
IRCTC, while appearing relatively well-valued at a P/E of 29.34x with strong fundamentals, isn't risk-free. Its growth is tied to the established rail ticketing market. Future gains depend on successfully monetizing extra services and cross-selling, which are still developing. The highly competitive online travel market means that if overall sector profitability doesn't improve alongside volume, a wider valuation correction could occur.
Future Outlook
Moving forward, the travel sector's path will depend on how well platforms balance aggressive growth with strict cost control and margin improvement. Outbound travel should remain strong, but global tensions and changing visa rules could create near-term issues. For domestic operations, continued investment in technology and offering more products, especially in profitable areas like hotels and holiday packages, will be crucial. Analysts are cautiously watching highly valued companies, favoring those showing consistent profitability and efficient operations. IRCTC, with its strong market position and sensible valuation, and TBO Tek, by focusing on higher-yield services, seem best placed to handle competition, provided they can execute their plans well.