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Profit Surge Bolstered by AI Investments
Ixigo's stock rose 4.43% to ₹171.05 on Friday following strong Q4 FY26 financial results. The travel platform achieved an all-time high profit after tax (PAT) of ₹32.1 crore, a 91% increase from the previous year. Revenue grew 34% to ₹1,228 crore, and Gross Transaction Value (GTV) increased by 25% to ₹18,692.7 crore. Adjusted EBITDA also saw a healthy 28% year-on-year rise to ₹120.9 crore, with cash flow from operations jumping 60% to ₹195.7 crore. Both flight and bus segments demonstrated resilience, exceeding 50% year-on-year growth in FY26.
Analysts Temper Outlook Despite Growth
Despite the solid financial performance, analysts at JM Financial have maintained a 'Buy' rating but reduced the target price to ₹200 from ₹250. This adjustment reflects the consolidation of Trenes, which led to a lower P/E multiple of 50x from 55x. Although consolidated revenue estimates for FY27E–FY28E were slightly increased by 1-5% and adjusted EBITDA margins improved, adjusted EPS estimates were lowered by 11-12%. This revision is due to the amortization of significant AI investments and expected higher losses from Freshbus.
Growth Moderation and Margin Concerns
Consolidated GTV growth moderated to 8.6% year-on-year in Q4 FY26, down from 21.5% in Q3 FY26. This slowdown was influenced by a high base effect from the Maha Kumbh event last year and disruptions in Middle East travel. The bus and flight segments continued to perform well with GTV growth of 26.1% and 18.1%, respectively, while Train GTV saw a 5% decrease. Trenes' integration is anticipated to help manage EBITDA margins.
AI Investments and Future Profitability
Ixigo's strategy includes leveraging AI through initiatives like "ixigo NEXT" to enhance user and operational experiences. Management aims to use AI to drive future growth and capture more market share. While analysts recognize the company's revenue and GTV expansion, the key focus is on how effectively Ixigo can convert this top-line growth into sustainable profits. The revised analyst targets acknowledge the potential for growth while also factoring in the financial impact of strategic investments in technology and market normalization.