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Easy Trip Planners Ltd
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Good evening, ladies and gentlemen. Welcome to Q1 FY '23 Earnings Conference Call of Easy Trip Planners Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]
I now hand the conference over to Mr. Prashant Pitti, Co-Founder and Executive Director of Easy Trip Planners Limited. Thank you, and over to you, sir.
Thank you. Thank you, moderator. Good evening, everyone. My name is Prashant Pitti, Co-Founder of EaseMyTrip. I hope that all and all your families are in safe and healthy state. On behalf of EaseMyTrip, I send a warm welcome to all of you for quarter 1 of FY '20 Financial Results Discussion Call. Today on the call, I'm joined by Mr. Nishant Pitti, Co-Founder and CEO; Mr. Ashish Bansal, Chief Financial Officer; and Ms. Priyanka Tiwari, Company Secretary and CTO.
I hope everyone has had an opportunity to go through our investor deck and [indiscernible] that we've uploaded on exchanges and on company's website.
Before starting with our quarterly discussion, I'd like to inform everyone that this year EaseMyTrip has commemorated its 14th anniversary and this milestone was a testament of our customer journey that this company has received over the [indiscernible]. Over the last 14 years, EaseMyTrip has grown exponentially to become second largest OTA in this country and on the way of becoming one of the largest travel tech organizations globally.
During the quarter, we continued to focus on investing in new business segments, make new acquisitions and expand overseas to start air-ticket businesses. I'm pleased to announce that with an intent to operate in all key activities within domestic, outbound and hotels, this company has set up a wholly owned subsidiary EaseMyTrip New Zealand Limited within New Zealand.
With this, the EMT will capture international air tickets and hotel segment business and strengthen its position as a global travel and tourism company. Also, we have witnessed remarkable performance in our first-ever corporate assisting device. With the aim to increase our penetration across [indiscernible] international travel market, the company has reported an astonishing performance from [indiscernible]. In quarter 1 of FY '23, the GMV reported from megaline profits stood at INR 7 crores. From this Middle East operation, we started with April month GMV of INR 84 lakhs which jumped to INR 1.2 crores in May.
And in the third month of June, we saw GMVs cross INR 5 crores. This signifies that the company has successfully managed to get this foothold in Middle East by providing hassle-free booking experiences and increased its penetration in [indiscernible] international travel markets. With the constant change in rules and current travel uncertainties across the world, we continue to create notarized travel search engines for each global subsidiaries. With our various initiatives to attract customers and drive growth, which includes full different medical policy, a special related discount on [indiscernible] partnership with [indiscernible] et cetera, and through partnerships and agreements with [indiscernible] other brands.
EaseMyTrip is saving its path towards a strong recovery for the industry and ensuring the current kind of demand is relied efficiently by engaging in operational and performance experiences and winning at the economies at last with new avenues of growth from non-[indiscernible] segments and the company's continued focus on financial and operational efficiencies.
The company will focus on continuing to generate long-term sustainable value for customers, partners and investors. We believe that the best time for the travel and tourism industry in India is ahead as we witness a rapid increase in demand across business segments. With the emergence of new airports and new airlines, OTAs are being preferred more compared to the direct capacity of the off-line travel agents. As we have mentioned in the previous calls, that COVID has positively impacted OTAs.
This continues forcing people to book online rather than go to travel agents off-line. We expect EaseMyTrip to post strong gross booking revenues growth over the coming quarters, supported by airline of trading at full capacity, paths of the international flights and increase in ASAF. Let me speak about our performance and highlights for the quarter.
We had a remarkable quarter for FY '23, result is profit jumped in by 125% to INR 33.7 crores against the net profit of INR 14.9 crores in the corresponding quarter last year. For the quarter 1 of FY '23, gross booking revenues stood at INR 1663 crores, generating strong and sustainable growth for its stakeholders. While on an annualized basis, with the current quarter run rate, we can expect our GBR, gross booking revenue, to touch around INR 7,000 crores for FY '23. In the air, quarter 1 FY '23, our air segment network calculations grew by 212% on Y-o-Y basis.
We have been able to sell 22.4 lakh air segments bookings in quarter 1 of FY '23. We have witnessed strong demand and with our constant current customer engagement, customer acquisition and focused market initiatives, in air, we will be present in some of the market in air segment comfortably. The hotel [indiscernible] and consolidation level has seen a jump of 409% to around INR .71 lakhs in quarter 1 of FY '23 as compared to INR 0.14 lakhs in quarter 1 of FY '22.
We are confident of future growth in this segment with our competitive pricing and wide offering across the hotels. Our trade book on other club services together grew by 132% in quarter 1 of FY '23 as compared to the same quarter last year. Given the recovery in travel and tourism sector, it has delivered high growth in bookings in trains and bus segment. Existing revenue for quarter 1 of FY '23 stood at INR 132 crores, up by 69% against INR 49 crores in quarter 1 of FY '22.
EBITDA for quarter 1 of FY '23 stood at INR 45 crores as compared to INR 21 crores for quarter 1 of FY '22, again, up by 114% on a Y-o-Y basis. And profit after tax for quarter 1 of FY '23 stood at INR 34 crores as compared to INR 15 crores for quarter 1 of FY '22, again, up by 125% on Y-o-Y basis. With this, I open up the floor for discussion. Thank you.
The first question is from the line of Praveen Sahay from Edelweiss Wealth.
Many congratulations for a good set of numbers. So the first question is related to the take rate. So if I look at on the sequential basis from 8.4%, now it's 7.9%. So should we believe that the normalization in the traffic and also the higher fare, this take rate to be maintained over here or there is a further room, it will go down from here onwards?
So Praveen, thank you for the question. The take rate which you have mentioned are on existed revenues. Now, if you look at the take rate which are on the basis of our net revenue, you would find that we have been able to maintain it compared to the last quarter. Last quarter, our take rate was somewhere around 5.2%, while at this quarter, the net margin is somewhere around 5.3%. The difference which we have seen on adjusted revenue is coming from because of the discount.
We have reduced our discount considerably compared to the last quarter. In last quarter, the discount was around 3.2%, while at this quarter, it was at 2.6%. And as you are very well aware, whenever we're not giving discounts, we are also not taking convenience from the consumers. So that is why the convenience fees and the discounts are able to balance it off very perfectly and the net margin has remained the same compared to the last quarter.
But if you look at the industry, if you look at the competitors and the industry for this particular quarter, the overall industry take rate has declined by around 0.9%, while we have been able to maintain our take rate, given the chance which we took the last quarter.
Second question on the GBR. Can you give the air contribution in your overall GBR for a quarter?
To that, I think we have presented another presentation as well, which is either uploaded already or is about to be uploaded. The contribution overall on the GBR basis from the air ticketing is somewhere around INR 1,580 crores from the air ticketing and from the hotel, it is around INR 35 crores, so [indiscernible] it is INR 35 crores.
And on your international business, as the Dubai has done very well on a month-on-month basis and also you had opened some subsidiaries, so in the going forward like this year or the next year, how big or a percentage contribution terms you are expecting to become the international business?
So Praveen, overall, the expectations are very high. We have formed multiple subsidiaries but Middle East is the first one where we have actually started the operation. You can go and check out EaseMyTrip.me which is basically the website where people from the Middle East region can go and make their bookings. We are yet to start similar operations in the other parts of the world. But overall, the results have been more than exciting for the company, as we have mentioned in the starting statement, and we are looking forward to see a significant contribution coming from our international operations, given our lean and efficient organization structure and cutting-edge technology, we wish to become the global ticketing company [indiscernible] India.
And related to that, like INR 7 crores, is it all from the air or it's a mix of segment?
Majority of it is from the air right now.
And some bookkeeping questions. The other expenses for the quarter has jumped on the Q-o-Q significantly. Can you give some details like INR 13.7 crores for this quarter versus INR 5.6 crores last quarter. So what's related to that?
So our B2B business has also increased during this particular time and the commissions which we get to be within come under other expenses. Because of this, we are seeing that the other expenses have swelled up by a bit in this particular quarter.
And also, I had observed that the EBIT margin you had given for across the segment is the same, is it like your air segment or hotel segment and others [indiscernible]
No. I think we gave a combined number. Ashish, please correct me if I'm wrong. I remember we gave a combined number for EBIT margin.
Yes. Yes, it is the combined.
We'll move on to the next question that is from the line of Saurabh Shah from AUM Advisors.
Sir, just following up from the earlier questioning line. I just wanted to get a sense of, as you expand into other markets like Dubai, I think in New Zealand and other places as well, how do you see the profile of the profitability going forward? These markets, I'm sure you would have studied them. Do you still provide the same kind of profitability dynamics in India does? How do you see your growth from over the next 3 [indiscernible] looking at other markets as well? Or do you think the growth will be dilutive to the margins?
So currently, we are, of course, content, meaning the reason why we entered Middle East market is that we are able to do business at a positive run rate. So the other markets as well, we are working, we are contemplating. To provide the exact nature of profitability is going to be tough at this particular time. However, as a company, we stand by being a PBT-driven company rather than [indiscernible] companies, so you can expect the company to do whatever they just need to do a profitable basis. So this is the endeavor of the company and we look forward to take time, wherever we find more low-hanging fruits rather than at the top of business. So in Middle East, we found the business to be slightly more completed. And that is why we have started that business first and now, we are planning to expand in the other geographies. But given the nature of the company, which is PBT-driven company, we believe that we will continue to grow our business profitably.
And in terms of scaling more both in India and elsewhere, any other kind of expenses? In the past, I think you have spoken about technology costs or other thing, do you expect any disproportionate change over there? You might have to invest in something new to get people to kind of connect with more of the networks, more regions, more systems and which may have different technologies, so do you anticipate any change over there?
We do not anticipate a huge change in cost structures, specifically given from technological perspective. In terms of ILD costs, there might be some costs, but those are not disproportionate again. They will be proportionate to the business, which that continue geography is building. Most of the cost structure will continue to be born out of India. Only 2 people would need to be added in each geography. So I do not see any huge CapEx requirement or even, for that matter, even OpEx requirement for the company to grow in the other part of the world. Whatever expenses related to marketing, sales will happen, they will happen in proportionate to the GBR, which those countries are bringing in.
So in the past, you have mentioned that largely around the [indiscernible] platform is, you expect them to be adequate for you as you scale up for the next 1 or 2 years as well?
That is correct.
The next question is from the line of [ Parag Dey ] from JM Financial.
As there is no response from the current participant, we'll move on to the next one from the line of [ Vedic Bafna ] from Monarch Networth Capital.
Yes. So congratulations on the good set of numbers. I just had a question regarding the revenue split between international airline travel and domestic airline travel. So what would be that in the percentage point?
Ashish-ji?
[indiscernible] significantly increased in this quarter as compared to previous one. And I think around 30% of the air flight travelling we are getting from the international.
Sorry, I couldn't hear you. Can you please repeat?
We are getting 30% volume from Intra-Asia business in this quarter.
30%?
Near about 30% in [indiscernible]
And the next question is on the payment gateway charges side. I can see that the payment gateway charges has increased a lot. If you compare it Q-o-Q in Q4 '22, it was 12.2% of sales, whereas in Q3 FY '22, it was 10% of sales and this quarter, it was 13.7% of sales. So any reason being for this?
The payment gateway should be looked as a percentage of GBR. And as a percentage of GBR, they are actually quite standard. They're very linear between 0.6% to 0.7%, not existing because you pay gateway payments charges at the total transaction level.
And also, it's the customer choice to whether they are paying through credit card, UPI, [indiscernible] sometimes vary?
But overall, on the overall basis?
On overall basis?
It is pretty much the same. The last quarter, it was around 0.6% and this time, it's somewhere around 0.7%. So I do not see any significant change as a percentage of GBR.
The next question is from the line of [indiscernible] Capital.
Prashant, what would be the take rate in the international business?
So those will be in line. I do not see a significant change in the take rate for domestic and international. What happens is, at the ticket level, since the amount is bigger, we are able to make much more but at the overall gross level, I do not see take rate to be much bigger except whenever there's a business class booking, and there are more business class bookings in international travel, we are able to make better margins.
Which geographies are largely driving this international business? I mean, can you please elaborate on that?
So right now, as the borders are very recently opened up but not all the flights have started. The borders actually opened up on 27th of March, if you remember correctly but most of the flights currently are in the vicinities of Dubai, Singapore and some other destinations. So right now, it has not come back to the standard numbers which we have seen in the past. The other thing which has happened is that there has been a huge delay in visa process for the long-haul destinations specifically. So I do see a lot of seeding issues are happening post pandemic, which will be sorted out very soon and we will be able to see the normalized version of air ticketing on international basis as before.
And regarding this hotel segment, how is the recent EBITDA profile for hotel? I mean, in terms of unit economy, is it deteriorating or improving and what is the outlook going forward?
So as I mentioned in my previous calls, our endeavor is to grow our hotel business at a breakeven pace, and that is what we are focused on. And the results are also the same. Our hotel segment hotel bookings have gone up quite dramatically compared to the last quarter and also compared to the last year of the same quarter. See, at EaseMyTrip, we have also been able to increase our business dramatically. If I could share, in January month, around 5.5 million total visits happened on EaseMyTrip on our desktop, mobile and app put together and in June, that number was somewhere around $7.5 million for desktop, mobile web and application put together. So our constant focus is to get more visitors on our website and then convert them by selling them various cost selling activities like most of the people are coming for flight but our endeavor is to sell them hotel bulk, [indiscernible] services. And that is what our focus is. But the focus is definitely not only grow the business profitably but [indiscernible]
And regarding this recent acquisitions of hotel, I mean how is that going on?
I mean the acquisition of 3 hotels is doing pretty well for the company. They have also been given very strong targets, and they are able to meet those targets. The company is running profitably. And we wish to continue to grow that organization and expand it to 200 hotels in the next 5 years, which stands at around 22, 23 hotels at this minute.
The next question is from the line of [ Jatin Jadhav from Sahasrar Capital. ]
First of all, congratulations on the good results. My first question is regarding the Yolo acquisition, which was done, how is it going? And regarding the total of [indiscernible] do you see a huge chunk of your revenue pie to be constitute of these 2?
So Yolo acquisition has happened in the month of March 2022, the entirety happened in March 2022, if I remember correctly. So the deeper integration is happening. And from this month onwards, I see significant upside coming from the Yolo side, where the business has really picked up. We have been able to put the pieces together back again and restart the company post the pandemic.
And we believe that overall, the company could do dramatically well for EaseMyTrip as a brand. The endeavor of Yolo is very simple, basically, it's creating the premium segment of the bus, which is very well required. In India, there are something around 15 million buses, which are on the road every day and most of these buses are in shambles.
Yolo basically worked along with bus operators to make those buses in better conditions, put the GPS tracker in those buses and create the environment which people need to be able to travel in bus comfortably. So overall, there's a huge market out there and Yolo wishes to capture that market and we are working along with them. The revenues basically have started coming in from this particular month onwards and I expect them to do pretty well going forward.
And my second question was regarding the international business. After Dubai, from where can we see revenue coming? And will it be just from the air segment or will you be using the same strategy in India like Stay or Yolo or any other good acquisitions outside also?
See, we are open for the acquisition. There are few companies where due diligence process is already going on from the last couple of months. Acquisitions out of India, it's not something which we are not contemplating but again, the DNA has to match. I think EaseMyTrip, we are a very efficient organization which is dissecting in one particular still very well. We are looking for acquisitions of the company which are somewhat of EaseMyTrip nature and if the DNA makes, we could be more than happy to acquire someone outside India as well. And we have [indiscernible] for the company.
And just one small question. The back-end operations would be handled from India itself for the international business or will we be hiring talent outside like in the local...
Move to the back end will continue to operate out of India, however, where there is a language barrier, we may have to set up a small call center. For example, in Dubai, we have set up a call center for [indiscernible] people over there. So wherever there is no language barrier, most of the operations will continue to exist from India but wherever there is requirement, we will have to work according to the nature of this country.
The next question is from the line of Madhuchanda Dey from MC Pro.
Congratulations on very strong results. I have 3 questions. The first one is number related and the other 2 are a little long term. So my question is, I mean, if I look at the segmental results, although I mean, hotel is very, very small at this stage but the segmental margin is a tad lower than your air ticketing business. So as we are moving into newer geographies, which is international and into newer segments like hotel, then buses, et cetera, et cetera, what do you think would be the trajectory for the margins? Do you think we will settle a percentage or 2% lower than the current level or do you think that in the initial stages, margin could take a bigger hit?
So Madhu, basically, the idea to grow our hotel and our non-air businesses right now is to grow at [indiscernible] because while it is already known that at the gross level, we make around 12% to 15% on total bookings but then we are getting back to the consumers in the format of discount and that is why the total business is at breakeven.
The endeavor is to continue to grow at breakeven for certain amount of time till that number becomes substantial and then thereafter, we would consider looking on other things. However, at the hypothetical level, the margins which we can make on hotels would be higher than air ticketing margins because the overall, the gross margin itself is higher at the hotel business.
So there, the business margins [indiscernible] business, depending on where do we want to start to make some money out of it. Right now, the endeavor is to grow that business and not to make money out of it. That's the call which company has taken. And in the due course of time, we will get to see how much money we are making in the total business. For the international business as well, I believe that the overall margins can be in line with what the margins which we are making in India.
Even in developed markets?
Well, right now, we are contemplating. For Dubai, we are seeing a somewhat similar number. But again, for the other specific markets, I will have to skip that. However, we believe that the margins can exist, specifically given that our operations will continue to happen out of India. And since we are one of the most efficient organizations in India, we should show you fare is much, much better than the incumbent players out there. So the idea is to grow out of India and grow our business. Right now, we are not too much worried about the margin part, and we know how to squeeze in the margins as what we have done at these markets. And that part can be taken on because right now idea is to get our foothold in most of the markets.
My next question is a little long term. So we have been reading and hearing a lot about ONDC. So would someone like you be interested to join a platform like ONDC? If yes, why and how do you think that would impact your business? And if no, why not?
So we are in actually 3 states with the ONDC team, we have had a couple of meetings with them. There has been no conclusive yes or no from our side. So far, we are just trying to understand their technology, their platform and what kind of services are they providing. It's a platform where we can enlist ourselves both as buyer and supplier. And we are trying to understand more and deeper understanding. As of now, they are more focused on the grocery shopping or the e-commerce shopping path rather than the air ticketing path but we will get to know more about it as the time comes. However, the discussions have already begun from our side.
Do you think that in a platform where there will be multiple players, you will stand to gain because you have the cost efficiency as an edge or do you think...
Anything which provides EaseMyTrip visibility helps our organization. Since our pricing is better compared to a competitor, we have an edge wherever we get more visibility. That's something which we mean because then there is a lesser amount of money which you have to spend on marketing and everybody is basically standing at the same level. So yes, at the theoretical level, ONDC could help companies like EaseMyTrip because it normalizes the cost of marketing as everybody will be listed on that but again, it is too early for me to say anything. We are in the accelerating stage right now.
And my very last question is from a 5-year time horizon, what is that aspirational company that you would like to be compared with?
So I do not think that we have to think of any company as an aspirational company. I believe that at EaseMyTrip for the last 14 years, what we have done, with very limited amount of capital and on this call, I'd like to share the details, which I don't think we have mentioned before but it is very [indiscernible] out there where the first 5 years of running EaseMyTrip, we have totaled only INR 15 lakh of capital, the first 5 years, which was a formidable year of EaseMyTrip.
So we have grown this company [indiscernible] money, only INR 15 lakh was set in the first 5 years of EaseMyTrip and no money from the bank was taken. There's no [indiscernible] I believe that at some level, we might be aspirational to see [indiscernible] out there, I hope I can say that after doing whatever we have done for the last 14 years.
But yes, at the top level, we do see there are some companies like, of course, Zerodha, Zolo, who have again bootstrapped the organizations and have built tremendous amount of businesses, are generating humungous amount of tax, at EaseMyTrip, we would like to see ourselves going in that direction. And we are following the path of doing the right thing for the consumers with the little marketing as we can so that those consumers may [indiscernible] and be able to retain them for longer duration of time. So yes, that's the aspiration which we have.
We'll move on to the next question. That is from the line of Rahul Dani from Monarch Networth Capital Limited.
Just a couple of questions from my end. Just wanted to understand what is the status of the ForEx business?
Well, I believe we have gotten the license for the ForEx business, the business is yet to start. Ashish, do you have anything to add to that?
Yes. So it's the approach. We have applied for license with the RBI, and we are waiting.
And sir, I just wanted to check, we have seen increased advertisement from EaseMyTrip. So do you expect this percentage to kind of start increasing as we are gaining more market share? And just wanted to understand what, according to you, our market share would be right now?
So our marketing and sales promotion as a percentage of GBR has not increased, in fact, it has already gone down. Our entire marketing expenditure for the last quarter, which is quarter 1 of FY '22, was [indiscernible] As a percentage of GBR, I believe it was around 0.6% but if you compare with the last quarter, last quarter, it was 0.8%, last to last quarter, it was 0.8%. So overall, I do not see our marketing and sales promotion has gone up dramatically, in fact, it has only gone a notch-down. The reason why you might be seeing EaseMyTrip increment more often than before is because we're tracking it, [indiscernible] all the social media, which is Google or Facebook, they're very intelligent. If you search EaseMyTrip more, you see the ad of business more, as simple as that. So that might be probably the reason why you're seeing it. I believe that we will hover around between 0.6% to 0.9% as our marketing and sales promotion as a percentage of GBR in the long-term basis.
And approximate market share is what you would think we would be commanding right now?
Market share study, to be honest, has to be done by the third party. We do not know the exact data at any given point of time. However, we believe that the market share does not change that significantly substantially over quarter-on-quarter. It is also a matter of fact of how much discount the company is offering at that particular quarter.
We chose to be a little bit on the conservative side. If you see that our discounting has only gone down. Probably FY '22 to the entire year, our discount was some around 4.4%, while for quarter 4 of FY '22, we reduced it to 3.2%. And for this particular quarter, we have again reduced it to 2.6%. So it is also a matter of matter of the fact that what discount is to given to the consumer.
We believe we are very lean and efficient organization and as much as we care about serving our consumers, we also care about having a very healthy balance sheet. So it is also a matter of fact of bank. And in a particular quarter, if we wish to increase our number dramatically, then we go by providing no discount but we chose to do it in a lean and efficient way and we see our business on a long-term basis. So I believe that the market share currently would still be the same somewhere around 20% on the OTA businesses on year.
And sir, just one last question from my side. Any short-term impact on this SpiceJet ruling from the DGA?
There is no impact as what we see right now. Of course, this is very recent, so in due cost of time, we'll [indiscernible] but so far, I suppose there has been dentition and whichever companies able to handle it pretty well.
The next question is from the line of [ Parag Dey ] from JM Financial.
I basically had a couple of questions. Number one question was with regards to the airline side is shaping up, if I look at the last 2 quarters and the way our GBR has extended both on a sequential and year-on-year basis. On the airline side, we have lost market share, could you essentially help us understand if that will be a right equipment? The second question would be as to how have you seen competition evolving, especially given one of the customized players coming back very strongly backed by Flipkart? And the third question was a practition question with regards to the number of hotel nights that you said in your presentation, is there some realignment of the prior period numbers because I see [indiscernible] FY '22 hotel night numbers in the presentation as compared to last quarter.
So in regards to your first question, I do not see there is any market share loss. As I have said in my answer before that we have chosen to be a little bit consolidated on our discounts, which we have been offering. From quarter 3 of FY '22, I believe the discount was somewhere around 4.6%. Then we took it down to 3.2%, and now it is at 2.6%. So when the business is [indiscernible] when the gross booking revenues are great and the bookings are happening, why do you want to get too much of the [indiscernible] profitability is what the other thought process is. And because of this, some numbers, as you said, that some numbers might not have gone as much as high as we would have expected because we sold to be on the conservative side on the discounting part. That's the answer #1.
So my second question is with regards to the premium [indiscernible] given that...
It is now. We have seen n number of competitive cycles coming in though one as we would have assumed. In fact, honestly speaking, competition intensity has only dried up in the last couple of years, the kind of competition, the kind of discounting which we have seen in year 2013, '14, '15, it's just not sustainable at this particular time, and we have tried even in those environments. So we believe that to do the business sustainably is the right way to do it. If you burn a lot of money in one particular quarter and then also, you do not see needle moving up dramatically, then the next quarter you basically automatically take the route which is right route, which is not to burn too much of money.
And I believe by us being a listed entity and running business profitably, there's enough pressure on the competition's side as well to do business more sustainably and turn profitable funding. In fact, I believe that I've read a couple of messages as well from the company decision we call required that they are actually a lot more focused on the setting the price side. So I do not see a huge quest coming from the company, which is recently priced.
And the third question, which is related to the hotel business, yes, we have added over 3 hotel numbers as well into the business. This is a consolidated number and that is why the numbers might have changed as the deal from the last quarter.
Prashant, my question was with regards to the hotel volumes. 3 would have come in in the second half of the year but I see even first quarter hotel numbers seeing a change in the first quarter FY '21 numbers. So what would explain that? And the second question was in regards to a segmental profitability and which is also asked by one of the other participants, you guys have reported the segment revenues and profitability across air passage and other businesses. When one sees at the segmental profitability, it appears that the segmental profitability is same across all the segments. So what would explain that?
Ashish-ji, can you answer that question?
Yes. For Hotel of Q1, we have to see what the difference we are talking about, right now I'm able to comment on this.
Ashish-ji, about the segmental property, have we reported...
Segmental, yes. We reported segmental profit at the results. So there is an improvement in the quarter [indiscernible] process, there's INR 7 crores of profit in the current quarter as against INR 27 lakhs at loss in the core on the last quarter. So there is an improvement in hotel passage revenue.
But what would explain that if the margins are 47.5% across each of the segments, that is something...
The margin increase is because of the SC basically. So this time, there's a SP number added in the hotel business.
I was just saying that the margins across air package, hotels, passengers and other services show up at 37.5% across each of the 3 segments in this current quarter. That's was the reason why I ask that question?
So basically, we do not segment other employees. And that is why I do not think that it will be a core thing for us to say that the EBITDA is exactly the same for all of them. Is this that you have reported a combined a bit margin.
The next question is from the line of Santosh Sinha from Axis Capital.
My question is regarding the contingent liability that company has. Also, actually, when it comes to litigation with the air both travel and crews and also with the income tax demand from the income tax department, is there any update on these 2 litigations?
As far as [indiscernible], there is no development and there is a [indiscernible] And as far as income tax demand, it is under update authority, so stay stable.
The next question is from the line of Praveen Sahay from Edelweiss Wealth.
So just a clarification. As you had said that the domestic and international bifurcation of 70% and 30%, is in terms of volume?
No, in terms of value, GBR. In terms of value.
The next question is from the line of [indiscernible] Capital.
Just wanted to know your outlook for your airline volume growth for the next 3 years? I mean, for this, I want to rephrase it, support the airline industry grows by, say, 25% over the next 3 years, can you grow by 2X or you can grow much higher than that?
So I will sort of state what is anticipated for the airline industry and then probably comment on what should we expect in airline. Right now, [indiscernible] a couple of dispersals, there are about 710 aircraft, which are used in India. And every year, in India, we are expecting to add between 110 to 120 new airplanes for domestic purposes. This would mean that over the period of next 10 years, that is, the market should go up by 2 and become 3x the size of the market, which it is right now. So on an overall basis, we should expect a CAGR growth of around 14% to 15% on an annual basis. So that is the anticipation at the market level. At these markets, we are gaining the market share and since they are chasing, I believe that we should be able to grow at least 2X to tune of the market and maintain that runback for the next couple of 2 to 3 years. That would be our expectation.
Where do you see this EBITDA margin settling in for the airline business? I can expect around 50% or will it deteriorate going forward?
Right now, it is at 50%. At the peak of it, it was somewhere around 60%. I anticipate this number to settle from there onwards.
The next question is from the line of [ Anshuman from YCG. ]
Prashant, so you mentioned in an earlier interview that the company grew at close to 50% CAGR between FY '16 to FY '20. So what is your outlook on the growth for the next 5 years, even the decade? And I also had another question. So you mentioned that airlines are the bread and butter of the company. Where do you see the revenue mix going forward the next 3 to 5 years?
To answer your question #1, yes, the company grew at tune of [indiscernible] 57% in the past. The pandemic basically, of course, altered the business to marketing. Now the business is actually back on track. If you can see that our GBR for this quarter, if you take an annualized approach on the GBR which we have attained in this particular quarter, on the annualized basis, we are anticipating our GBR to come around INR 6,500 to INR 7,000 crores for FY '23 provided there are no future disruptions related to COVID or any other anomalies.
So at that, if you take that as a number, we are anticipating our business to grow by 90% compared to FY '22. So that should give you some hint on where we are seeing the progress. And on the mix side, the mix can change [indiscernible] Our Middle East business is growing and we anticipate our other operations also to start in the next 4 to 6 months. So the business needs can change pretty dramatically. Our endeavor is to keep adding new business verticals to EaseMyTrip, which are either at even or profitable stage. So it would be very hard for me to comment for the outlook of 3 to 5 years, however, our endeavor remains the same, which is to become a global player and become a travel ecosystem rather than just being the travel platform.
You, in an earlier interview, mentioned about how, when people are booking on websites, they're comparing prices, but when they're on app, they're not potentially comparing prices, which I found to be a great point. So I'm just wondering what's the current split between the website and the app bookings? And how is it progressing forward? Like what does it look like in the future, what's your outlook?
So basically, [indiscernible] that, so people can use that on mobile websites as a substitute of the RP. The business is growing more on the app side rather than on the desktop side. In fact, the desktop numbers are almost 1/4 of whatever total numbers are, 1/5 of our total numbers are mobile, website and app constitutes for the most of the bookings. And this is one group of ours, which I believe the current organization license market has, which is that the more and more we get deeply penetrated on the app side, the better it is for the company, where we become people with all choice, you might part and just make the booking. As you already know that we might have given an option to not charge convenience, it becomes a no-brainer for our consumer to reuse markets over a period of time.
I have one last question. So you made these new acquisitions over the past year in the hotel space. How soon do you believe they'll start paying for themselves for the company?
See, our 3 hotel is already profitable. It's doing well. And however, the endeavor is not to focus on the profitability but to focus on the growth on that side. So there are loss targets which we have set for the company and the company is very well positioned to capitalize the brand name that they have created over the last 10 years for their operations and the know-how and use that to grow the organization to become a 200 hotel organization in the next 5 years.
I have just one last question. In terms of expanding to new markets, what are the inputs that are required to create a foothold in a new country in terms of CapEx and strategy?
So strategy is basically to partner with the local low-cost airlines, which we may not have partnered for that particular country. Most of the other areas are labeled on the GDs but low-cost airlines is something which we have to partner on. And also we have to partner with the bank and the local payment gateway provider so that we can take money in their currency. These are the 2 big requirements to start the business. Of course, we have the former company but besides that, these are the 2 big requirements. So they're not easy CapEx patent business, the money is required to do the advertisement in those countries and at least myself, we wish to grow our business at breakeven or profitable space. So whatever moneys are required, it is required for sales and marketing promotions. And that then can certainly be provided by EaseMyTrip.
The next question is from the line of [ Aditya Krishna, ] an individual investor.
I'm an undergrad student, very early investor of EaseMyTrip. My question is regarding cash on books of EaseMyTrip. Look, I've been very interested with the cash that you guys sit on and also, you have been using the cash for a slew of acquisitions which you're undergoing, maybe YoloBus or St. But now my real question is, as you enter into global markets, I mean that to competitive markets like Dubai, [indiscernible] and New Zealand now, what is going to be the cash deployment strategy to acquire? Is it going to be to acquire international companies to generate further cash or is it going to be the home grow the business from scratch outside?
So the answer is simple. Firstly, we believe that we are very well poised to grow organically in this country. As much as [indiscernible] we grew very patiently, we grew in a correct manner. And we actually exhibit the same ideology given outside where we would want to grow at unit level profitability in other parts of the world.
And given the current situation of the company, it could be far, far easier to do it now that we to do it 10 years ago, where we were not brand at that time period. So now, having the capital and having the branding, having the technology, it is much easier task than what it was done earlier, 10, 15 years ago by EaseMyTrip. So the idea is to surely grow organically but if there is an opportunity which is presented to EaseMyTrip where an acquisition could be made but the beginning of the company has to match, it's a company which is presented to EaseMyTrip acquired is not in profitably, does not have a very strong unit economy, we will shy away from that company and rather grow by our own.
But there are some companies which we are contemplating outside India. We believe that the unit economics and everything matters. We may look at those acquisition as an opportunity.
Just to add up to that, in just some of the previous question, you answered saying you would want to focus on growth in these emerging markets or upside or global markets to that stay but now you say that you want to grow organically, I get that, but how will you grow organically and fast, right? I mean that's my real question.
So it's a fair question to be honest. We are also talking about it ourselves at the moment. We have started our miles operation only 3, 2 months ago. The wages are very, very encouraging. The same kind of structure which we have followed in EaseMyTrip which is not having any kind of offering which we are offering in the other countries. We wish to continue on that back. There might be some money which we will utilize to do marketing a bit in those countries but the idea would be to grow in sentinally rather than burn the money marketing in these geographies. So our approach will remain the same because we grow patiently. If it can happen organically in a great sense, great, otherwise, the fundamentals for EaseMyTrip is the same. material.
One last thing, because we are, as a company, are entering into global markets, and that's probably we'll see a massive revenue stream going ahead, what should be our edge? Are we going to grow with the same that we are no convenience, possibly the best platform to use out there and we are customer-centric, et cetera, et cetera or we are going to have developed some new edge in global markets, which convince users to beat other players and come to EaseMyTrip to book everything?
No, I think what you have said is right. Whatever the sense this organization has, we will continue to use those sense, not to say that we don't want to innovate. Depending on the country, depending on the geography, whatever is the requirement, we will try to suit our sales, we will try to hold ourselves to those geographies to serve those people better. However, at the core, we believe that this business is very simple at the level where if you provide better service and better prices to the consumer, sooner or later, they will jump to start looking at it. And then that core remains the same, whether it is India or UAE or US, we just have to focus on providing great service at a great price to the consumer. And I believe that EaseMyTrip is very, very well suitable to do both in any geography.
Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to Mr. Prashant Pitti for his closing comments.
Thank you. To conclude, I'd like to highlight that the huge runway for growth, increasing wallet share from existing customers for hotel and holiday segment, addition of new customers and of efficiencies are leveraged now, we believe we are well positioned to capitalize on the growth opportunities and improve profitability in the future. Well, thank you, everyone, for joining us. I hope we have been able to answer all your queries. In case if you require any further clarification, please feel to reach out to us or Orion Capital, our Investor Relationship partner. Thank you, everyone, for joining us on the phone.
Ladies and gentlemen, on behalf of Easy Trip Planners Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.