Easy Trip Planners Ltd
NSE:EASEMYTRIP
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
28.89
52.7
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Easy Trip Planners Ltd
You don't have any saved screeners yet
Good evening, ladies and gentlemen. Welcome to the Q3 FY 2023 Earnings Conference Call of EaseMyTrip. Today in this call, we have Mr. Prashant Pitti, Co-Founder and Executive Director; Mr. Nishant Pitti, Co-Founder and CEO; Mr. Ashish Bansal, Chief Financial Officer; Mr. Basavraj Shetty, Head of Investor Relations; and Mr. Rajat Gupta from the Investor Relations.
The results for the Q3 FY 2023 for the company, the investor presentations and the press release have been uploaded on the stock exchange and on the company website.
Before we start the call, a disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance, and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Prashant Pitti, Co-Founder of EaseMyTrip. Thank you, and over to you, sir. Mr. Prashant?
You have to unmute everyone.
Sir, I have unmuted everyone. You can go ahead, sir.
Okay. I hope I'm audible now.
Yes, sir, please go ahead.
Thank you. Good evening, everyone. In the previous quarter, that is quarter 3 of fiscal '23, we delivered yet another solid performance, driven by our customer first strategy, long-term investment in people and technology and by focusing on our growth priorities for FY '23 and beyond.
During the quarter, we booked record gross booking revenue of INR 2,270 crores, an increase of 76% year-on-year; and 9 monthly gross booking revenues of INR 5,911 crores, 132% increase year-on-year. We have already surpassed our full year FY '22 gross booking revenue by 59% and up to setting up a new level for the current fiscal.
In doing so, we apply the same disciplined approach to efficiency that has produced consistent and predictable earnings for us in the past. During the quarter, we saw increased volume in our Air Travel and Hotel segment, which benefited from our superiority of brands, our investments to our marketing and promotions in the last quarter and the festive seasons in India, which is regarded as one of the busiest travel periods in the world.
Our core segment, which is Air Travel booking, grew by 31% in quarter 3 of FY '23 year-on-year, whereas Hotel segment grew by 88% year-on-year. We have heavily benefited from being a customer-first company. Building on our core customer-centering approach, we concluded our Travel Utsav Festival Sales exceeding INR 555 crores between October 16 and 23. The success of festival season demonstrates the appeal of our value proposition to our customers.
Recently, the company introduced a robust referral program reward system, EMTPRO that aims to reward loyal customers when they refer now and they can earn forever. In order to further accelerate the adoption of B2E offerings, which is business to enterprise offering, our company launched 2.2 self-booking tool for the corporate. The tool uses AI, machine learning and data mining technologies to become more efficient and resourceful.
In the journey of creating our customer experiences, we have also built several trusting, respectful and complementary partnerships. During the quarter, the company collaborated with MobiKwik Zip, India's leading buy now pay later platform to enable users to book their travel today and pay later date, all this while gaining attractive discounts.
Your company has also signed a GSA with Go First to exclusively sell, promote and market passenger tickets to passengers in Saudi Arabia. Over the past month, we have also become official travel partners for the first World Tennis League held in Dubai and the official travel partner for IIFA Awards 2023 to be held in Abu Dhabi.
We are very optimistic about future levers of growth, both inorganic and organic. We continue to execute our previously announced portfolio expansion strategy during the quarter and acquired Gujarat Gift City based, Nutana Airway. Nutana Aviation leases, charter aircrafts, enabling operators to run efficiently, along with providing air charter booking services to the client. The acquisition will add new revenue stream to the company's well-diversified business model and will help developing EaseMyTrip into comprehensive travel ecosystem.
In order to further strengthen our Hotel Booking portfolio, we recently acquired a majority stake in cheQin, which is first of its kind, real-time marketplace for hotel booking, which allows travelers to bargain directly with the hoteliers over prices of the room. These acquisitions, we are prudently investing in our capabilities for the future growth and returns.
Building on sustained growth, the industry has witnessed during FY '23 with domestic travel almost touching the pre-pandemic numbers. The budget announced last week, reiterated the government's continued focus on developing tourism in India. The revival of 50 additional airports, heliports, water aerodrome and other advanced landing grounds would most certainly help in improving regional air connectivity, developing 50 cities across India, as a complete package for tourism, could work well with Dekho Apna Desh initiative, which is aimed to promote domestic tourism among the youth of the country. The government's push to set up Unity Malls in the popular tourism destinations in all states could enable the state to promote their rich culture and history, which also is promoting Make In India products.
We strongly believe all the government efforts to promote tourism in the country, backed by the proposed increase in capital investment in infrastructure would be key in driving long-term growth for all the stakeholders in the industry.
Now moving to the financial performance highlights. As highlighted earlier, gross booking revenue, the GBR for quarter 3 stood at record INR 2,270 crores as against INR 1,290 crores in the corresponding quarter, representing industry growth of 76% year-on-year. The growth is the testament to our unique business model and solid industry positioning.
The robust growth resulted in strong seasonal push, vigorous festival spending and packed by magnitude of marketing strategies deployed across these segments. The GBR for 9 months stood at INR 5,911 crores as against INR 2,544 crores in the corresponding period, a growth of 132% year-on-year.
The adjusted revenue for this quarter stood at INR 196 crores, growing 29% year-on-year; and the 9-month adjusted revenue was at INR 496 crores, growing at 65% year-on-year. The revenue from operations for quarter 3 stood at INR 126 crores as against INR 86.6 crores in the corresponding quarter, again registering a sharp growth of 46%.
The manpower cost as a percentage of GBR has slightly increased to 0.6% of GBR as compared to 0.5% of GBR as we continue to invest in our workforce. Marketing and sales promotion as a percentage of GBR were at 0.9%, which is slightly down as compared to 1% of the previous fiscal.
EBITDA for the quarter stood at INR 58.9 crores. For 9 months of FY '23, the EBITDA stood at INR 144 crores, an increase of 28% as compared to INR 112 crores in the corresponding quarter. EBITDA margin for quarter 3, FY '23 was at 45.4% and for 9 months was at 43.4%.
We have consistently delivered profits since inception. This quarter was no exception. During the quarter, profit after tax was at INR 41.6 crores. The PAT for 9 months stood at INR 103 crores as compared to INR 82.6 crores in the corresponding period, making a growth of 25% year-on-year. The PAT margin for quarter 3 stood at 32.1% and for 9 months at 30.9%.
In terms of volume, this quarter, we sold 32 lakh air tickets, net of cancellations, 96,000 hotel nights and 1.74 lakh tickets in the other segment, which primarily consists of bus and railways.
During the quarter, 84% of total volumes were sold in our B2C segment, 14% in B2B2C segment and remaining in our B2B segment. Our endeavor to grow globally is also taking into fruition, as we are able to grow our Middle East GBR from INR 8 crores in quarter 1 of '23 to INR 24 crores in quarter 2 of FY '23, and in the last quarter, it stood at INR 44.4 crores.
Now I request moderator to open the line for the questions.
[Operator Instructions] Our first question is from HS AUM.
Sir, firstly, I have this question on employee expenses. Employee expenses on quarter-on-quarter basis have increased by around 17% to 18%; and Y-o-Y it has more than doubled. So what might be the reason for it?
One of the biggest reasons is that we have also acquired companies. And in consolidated view, their numbers have also added up. But otherwise, of course, there is an increment and push towards increasing the head count, as we are growing globally.
So going ahead, should we assume that 14.5 crores should be a constant number now with no new acquisitions?
Well, I would not be able to say that. Of course, there is an appraisal process as well, which happens on regular basis. But otherwise, you should say that there was onetime big shift because of the new acquisitions, Spree Hospitality entire staff also got added into our numbers. But otherwise, there should be a reasonable growth, not the kind of numbers. As of Y-o-Y, you have said the numbers have doubled that is not what should be expected from hence forth.
Okay. So can you give break up to how much would be the revenue which has due to acquisitions in organic terms and how much did we grow organically and the breakup of expenses also in the same way, if possible?
Ashish-ji?
Look, currently our majority of the revenue are coming from the EMT India. And from the subsidiary, there is no significant volume, but they are growing quarter-on-quarter basis.
Sir, your voice is a bit muffled. If you can come closer to the speaker phone if possible.
You are asking about our subsidiary numbers?
So I just want a break up of how much would be the organic revenue numbers and employee cost...
More than 95%, if you say the number is organic, and less than 5% are inorganic, which is to overseas subsidiaries and the acquisition. So you can say the majority number is coming from stand-alone financial earnings.
Okay. Sir, my second question was on other expenses. So as other expenses has nearly tripled on a Y-o-Y basis from INR 7 crores to around INR 21-odd crores. So can you just help us understand the breakup of expenses, how much would be due to commissions and how much would be corporate or admin expenses in nature?
So most of the other expenses increase has happened because of the commissions, which are going to B2B2C segment. The corporate expenditures, there isn't that much of a shift, except that the B2B2C is growing as we have mentioned that right now, 84% of business is B2C, 14% is B2B2C. And commissions are going on those B2B2C business, and that is why the other expenses have gone up slightly.
Should we understand other expenses to remain stable as a percentage of revenues itself at 0.8%, 0.9%, going ahead?
That would not be correct because the admin expenditures would not change as much, but yes as B2B2C business growth, that percentage will probably remain the same. So hence, you can assume that overall on a percentage basis, it might go slightly lower. But again, there is a component which goes up as the business grows in the other expense.
Our next question is from the line of Swapnil Potdukhe with JMFI.
So just wanted to check on the current competitive intensity, how is that playing out, given the recent quarter, we seem to have held up our market share. But at the same time, we are not -- we have -- our discounts have also come down, and EMT spends are also down. So just wanted to understand like how are you looking at this space right now. Are you -- do you intend to hold on to the market share? Or do you -- are you aggressively looking to increase your market share?
In the last couple of quarters, you could see that we have gained market share in Air Travel. You should be able to compare it with the other players, and you should be able to see that the Air segment, our market share has only increased while we have reduced our discounts dramatically. And that is why this company is growing profitably.
What is exactly playing out over there? If you can elaborate a bit more?
Sorry, what is?
What is helping you gain market share while you are reducing your discounts -- so what are the factors...
The first and foremost is our brand acceptability. After being listing, we have lakhs of people who are our shareholders right now. We have also opened up -- we have also started one promotion scheme for our shareholders to thank them back for putting trust in EaseMyTrip, which is EMTFAMILY, in which they basically get subsidized rate compared to the other people. By the virtue of being the only OTA, which is listed in India, surely the brand validation and acceptability has increased. And also we have put in decent amount of efforts in building brands by partnering various events and various cricket matches, which is also helping the company to grow faster.
Right. Understood. And my second question is with respect to your acquisitions. So can you just help us understand the business models of this newly acquired company, Nutana and cheQin, a bit more in detail would help?
See, Nutana is recently -- it's a recent company where we have taken 75% stake in the company for the consideration of INR 1.5 crores, which is a primary capital. So there's no secondary purchase. We have increased INR 1.5 crores in the company and we have taken 75% stake in the company.
The business model of Nutana is fairly straightforward. It basically leases out the air charters to various corporates, individuals and even various OTAs. It could even lease out to various OTAs. At EaseMyTrip, we look forward to grow the air charter business, which is highly segmented right now between $2 billion to $3 billion at the moment, and it's highly fragmented. And using Nutana's capability, we would want to grow our organization for the nonscheduled air traffic as well. Right now, majority of our business is scheduled air travel. We would want to grow our nonscheduled air travel as well.
And if you want, I can talk a little bit about cheQin as well, which was the second acquisition.
Yes. Just before we go to cheQin, just wanted to understand will the nonscheduled listings will be available on your platform going ahead? Or it would be a completely different platform?
No, no, it will be listed. In fact, you can even see it right now. Air charter's option is available on EaseMyTrip. Of course, a lot of work needs to be done on that, and we are working on it as we speak. But this would also become -- see, we already have a very good amount of demand between 10 to 12 lakh people visit our website on daily basis.
Now for many of them, non-schedule air charter might actually make a lot of sense. Right now, when people travel via air charter, they have to actually pay for both ways. At EaseMyTrip we can democratize it by actually fragmenting it where you can just buy the seat and also just for the one way, rather than you have to buy for both way fare.
So a very solid demand exists at EaseMyTrip platform, we want to capture the market of another $2 billion to $3 billion, which exists for nonscheduled aircraft. And that is why -- that was the rationale behind Nutana and acquiring 75% of the stake at INR 1.5 crores for the consideration of INR 1.5 crores, which was issued timely.
Right. And a few words on cheQin, please?
Sorry?
CheQin, CheQin acquisition also.
CheQin. CheQin, of course. CheQin, again, is the first one of its kind business models. We see a very, very -- we see a tremendous hope and faith in what cheQin can do. We have acquired 55% stake of cheQin in consideration of INR 3 crores, which was again also primary investment in the company.
It's a newly formed company. What it does is, it allows travelers to negotiate directly with the hoteliers. And we really believe that this technology could be of tremendous use, specifically for the last minute booking. When a hotel is occupied at 80% to 90% and if they can get additional last minute booking at substantial price, substantially lower price as well, they might still also be willing to take that provided because the rates are not public. And that is what cheQin does, it allows people to quote the price and hoteliers to accept the price.
Hence, their published price actually does not change. And because of which it might be a win-win for everybody, for the large minute booking. CheQin also has provided a web platform to hoteliers, not just the app. And majority of the hoteliers prefer the web platform. And we have had about 60,000 hoteliers who have actually created the log-in on cheQin, and customers can basically bargain for those hotels with the hoteliers.
And what would be the volumes right now that we are doing over here?
The volumes have just begin. Both of these companies are newly formed companies. We have acquired these companies, not on the basis of their past record, but on the basis of what the future could look like, and that is why the acquisition amounts are also significantly lower.
Our next question is from the line of [James Verghese] with Tavasya Capital.
Prashant, see 2 new line items have been added on the expenses side: service cost and cost of materials. Can you please elaborate on that?
Well, service cost is basically the cost which is related to group movement. We have recently started doing group movement, MICE movements in which we get the entire package to corporate, and then the entire servicing is done by us. So yes, there is a revenue as well which comes along with that, but there's also a service, and that is the service cost. That is one line item, which comes along with the group bookings and the MICE bookings. Which was the other line item you mentioned?
Cost of material consume?
Cost of material -- [Indiscernible]
This service cost will also include the incentives that you are getting from the group airlines -- group...
That comes in revenue. It's the cost...
Yes, that will come in revenue, okay. And one more question with regards EBITDA margin, do I expect this to settle around 40% or it can go further down from here?
Since last 3 quarters, our EBITDA percentage has only gone slightly up. It started with about 40%, now I think it is about at 45%. I believe that as an Internet company, we are, overall, the EBITDA margin should only go up. And if you see -- if you just not -- the last year was an exceptional year. But if you start seeing from 2017 onwards, I believe that our EBITDA margin went up from 7% to right now at 45%.
And that is how it should be, for an Internet company, the EBITDA margin should continue to go up because the revenue can increase exponentially, but the cost can only -- cost should only go up [Indiscernible]. And that is why Internet companies are valued...
Increment from here, as you are saying?
Sorry?
So it will incrementally grow from here, as you say?
That is what we expect as our marketing expenditures, our employee expenditures should not go in the direct -- should not grow in the direct proportion to our GBR. It would be a slow and steady increase, but we are looking forward to keep bettering our EBITDA margin.
Our next question is from the line of Madhuchanda Dey with MC Pro.
I have 2 questions. So far, we have seen smaller acquisitions from you. That has actually so far, I know it will take time, not move the needle away from our dependence on the air travel -- air ticket segment. So I mean, what is holding us back? Is it the lack of availability of the right candidate? Or is it the pricing? Or is it our management backed with in expanding into other segments? I mean what is basically holding us back from doing something which is you...
So Madhu, I would actually like to reiterate the fact that at the time of listing, at the time of IPO, 97% of our business was basically flight business and 3% was everything else, which is bus, train, hotel, holiday. Now that number is somewhere around 89% and 11%, 89% is slight and 11% is everything else put together.
So that clearly demonstrates that the number is changing. And also for the matter of fact, that since our flight business is doubling -- almost doubling, this becomes even -- this change becomes even more harder. And for all the others, you have to actually quadruple to be able to get till over here. So I would like to reiterate the fact that the company is able to grow our non-air business organically.
Also another thing is that we also come with a thought process that we don't want to grow at every cost. We want to grow profitably. So each of our line items, be it bus, be it train, be it hotel, are either breaking even or are making money for the company. We do not want to burn today to earn tomorrow. That is not the kind of mindset which we have.
On the terms of acquisitions, of course, the company is very cautious and wants to utilize money very judicially, and that is why we are taking a very calculated approach in what we acquire and what we don't. So far, our 2 acquisitions have done fairly well. Spree Hospitality is profit-making, is already profitable. And at the time of acquisition, it had about 12 hotels, and now it has about 28 hotels in its portfolio and many more lining up.
The target is to actually keep adding 5 new hotels every quarter for Spree, and we look forward to grow that company profitably. Yolo has also started doing pretty well. The business has started coming. Last quarter, there was a loss on Yolo, but we are catching up on the profits and the business is also growing pretty rapidly.
For these 2 new acquisitions, as we said that these 2 are basically newly formed company and especially because we want to focus more on the companies which can actually be disruptive in nature. And since we -- let's say, we were not able to find any disruptive company, we thought that, okay, these companies which exist, but have very minimal business, we should back them because overall, the technology seems pretty robust to us. So -- and it's not that the company is not aggressive on the acquisition side and there is an ample amount of management bandwidth as well because there is an endeavor from our side to grow company inorganically as well in the non-air space. So we look forward to continuing our growth on non-air space and will increase it as and more acquisition happen.
My second question is slightly macro. See, post the pandemic, there was a big rush, and that was expected because of this pandemic -- pandemic-induced mentality and then people were trapped in. Could we see that kind of continuing, I mean Q3 has been record quarter for airlines, for hotels, for everyone. So I mean, is -- what is changing structurally? Or is that something you see that -- which is very, very different from what you have seen maybe 2 years back?
So I see 2 macro level big transformations. One is the way how customers think and see, which is I really do not think that there is any revenge travel. It's just a new way of how people live. Pandemic has taught us it's best to live at the moment and travel constitutes as one big portion to live in the moment. So I believe that the expenditures on travel will only continue to go up as the country's GDP, economy continues to do better and people enjoy to live their lives.
But the other big reason why we believe we are very, very bullish on Indian travel ecosystem is that there is no other country in the world which can say that there are 66 new airports which are going to come in the next decade, except for India. In India, the infrastructure development is at record speed. Most of the countries are not developing new airports, except for India. So we really believe that the -- as per multiple projected reports, the entire Air segment, domestic air segment in the next 10 years might go up by 3x.
And hence, the OTAs, which have become a necessity in travel, will only continue to grow. Gone are the days when we were on laptop and we could have opened 10 to 20 airlines sites, 100 different quoter websites to check the prices. Now everybody is booking on mobile. And on mobile, it becomes extremely cumbersome to open up various websites and hence OTA has become part and parcel of the travel industry. And we look forward to continued growth as the Indian macro continues to grow in travel sites.
Sir, do you want to call out any kind -- your expectation about the kind of GBR growth that you expect in the coming 2 to 3 years?
I would say that we are aiming to become an INR 500 crores profit company in the next 3 to 4 years. Given our international impetus, given our growth in India, we are looking forward to become an INR 500 crores profit company in the next 3, 4 years.
[Operator Instructions] Our next question is from the line of Aditya Chandrasekar with UBS.
Just a quick question from my side. So is it possible to kind of give the gross booking revenue breakup between the different segments in terms of air, hotel, bus, train, et cetera? That's the first one.
We will start indicating it from next quarter onwards. This quarter, we have not indicated it.
Okay, sure, sure. But I got your percentage. You said 89% is air, right, currently?
The overall 89%, 90% is something which is at air, the remaining non-air, that is correct.
Got it. Okay. And secondly, can you just -- I mean, qualitatively, can you just talk a little bit about the hotel business on how you plan to scale it both as a percentage of your overall business as well as how do you kind of reduce the gap between you and the market leaders in terms of the gross bookings from hotels? What's the strategy for that segment to grow rapidly?
See, we operate our hotel business in a very unique way through our channel partnerships with aggregators, which enables us to provide the best room rates in the industry. Because of which, our hotel business is already increasing many folds on a year-to-year basis. I'm assuming that you are aware of our aggregator model, which is a huge differentiator between us and the others.
Now this model itself allows us to keep adding more and more aggregators so that our prices keep going down, not because we are heavily discounting it, but because there are multiple parties who are contesting for our business by reducing their price for any particular hotel via the aggregator model. So this model is helping us grow this business [Indiscernible] making some money for the company by other competitors who enjoy a substantial position in hotel industry are still loss-making in their businesses.
So this is the winning strategy which we have with us, and we would like to continue to build on top of it.
Got it. And do you have some kind of long-term target in terms of as a percentage of your overall business, what should Air contribute and Hotels and other segments contribute?
We are -- at the time of listing, we said that within the next 3 to 4 years, we would want to be 70-30, which is 70% air segment and 30% non-air. I think we are getting very closer to that, and we might reach that position even before what we committed.
Our next question is from the line of [Gautam Kotagiri], retail investor.
And congratulations on a good set of numbers. I think this is one of -- this is the best quarter ever for Easy Trip Planners. I have a couple of questions. One, you briefly touched upon this Spree Hospitality. Can you just give the contribution of spread to the bottom line as of now? I think it's already 1 year that we have acquired Spree. How we see gearing on the revenue front and towards the profits that we're making as of now?
And the second question -- go ahead. Yes.
Yes, I'd like to just answer the question because I might even forget this question. So Spree is doing fairly well for the company. I don't think we have given very specific numbers, but I'm happy to give an indication that this quarter in the bottom line, which is profit, the Spree has added about INR 30 lakh for the organization.
Great. And my second question is on the overall marketing strategy for us. I see we are sponsoring big ticket events off late and events that are lined up across the year. In the last quarter, that is Q2, we had about INR 30 crores in marketing and sales promotion expenses. And in the Q3, we have about INR 20 crores. So can you share us some guidance on how this is going to span out in the future quarters that...
Sure. So as you have rightly mentioned, the marketing budget for this particular quarter has reduced substantially as what we spoke in the last earnings call that the Asia Cup sponsorship was one of the event, and which added almost INR 13 crores to the cost of the company on marketing side. However, it is paying off really well for the organization. As we mentioned that despite reducing the discounts, we are still gaining the market share.
I believe that a lot of credit goes to our branding initiatives which we are taking. For this particular quarter, our marketing expenditure actually is in line with what expenditure we have been taking as a percentage of GBR. This quarter, it was around 0.9%. And if you look trial, you would always find our marketing expenditure to be anywhere between 0.1 -- 0.9% to 1%. So for future guidance as well, we would want to continue growing our marketing expenditure as a percentage of GBR, keeping in between 0.8% to 1%. This effort would only help us to grow our GBR even faster, hence, maintaining this space is not a bad deal for the company.
Sure, yes. I just had one more question. Recently, I saw some news about the acquisition of the company called Glegoo?
Sorry?
I heard some news about...
We recently acquired cheQin. I don't...
Glegoo is the legal name of cheQin.
So what was the question around it?
No, I just wanted to know what business is Glegoo into, I got the answer.
Our next question is from the line of [Saket Kapoor] with [Kapoor & Co].
Sir, just a word on this cheQin and the nonscheduled flight, the business model. So if you could just dwell more into the nonscheduled one and the cheQin option, how are the customer is going to experience something better by these 2 line items, sir?
I think I did answer this question. You may not be there at the call at that time, but I'm happy to reiterate. Well, basically, the non-schedule, which is Nutana, would help customers to basically book nonscheduled air flight tickets on EaseMyTrip and also corporates and individuals who would want to basically lease out the charter or the airfare on EaseMyTrip metric, we already have a decent charter for scheduled travel. Nonscheduled air travel could also be utilized by the help of Nutana for EaseMyTrip.
For cheQin, it would enable customers to basically bargain for the last-minute booking for the hotel rather than if a hotel is showing a price of INR 6,000 everywhere, including at EaseMyTrip, a customer who wants to check in, let's say, 3 hours from now, might quote a price of INR 4,000 for a night and hotel actually might accept it because that's an additional revenue which they are getting. The reason why hotels do not publicize the price of INR 4,000 because that decrements their brand value. But in this particular case, the deal came from a customer who's willing to pay INR 4,000 and hotel accepting that deal that means that price was not published publicly.
And that is why hotels could be very eager to take the last minute booking at a cheaper discounted price, which is not available anywhere, including at EaseMyTrip, and hence cheQin can build the graph of last minute booking. It already has about 60,000 hotels, which has logged in into the platform. And we're looking forward to grow that number and offer cheQin using their mobile web and application to our customers.
So sir, this cheQin option is only subject to the hotel booking? And will this go down for air tickets also? Because we find the same rationale applicable even for last minute air ticket booking where the prices are significantly higher than what the average being for 10, 15 days, the last minute travel.
I might not be able to comment on that. Currently, the business model of cheQin is basically last minute booking for hotels. Let me this way, I might not be able to comment whether airlines will or will not be willing to accept this kind of business model. But for hotels, it's a very surely win-win situation. As they do not -- they can continue to increase their price on OTAs for the last-minute bookings, but for check-in, they should be happy to get a discounted price for the last minute as otherwise, the inventories are going unsold.
Right. But the rationale still remains for the air ticket also because the seat will remain vacant because of the high prices.
The rationale might change. Because the hotel -- the number of hotels are in millions, while the number of airlines are in numbers of tens and hundreds, if you look at international as well. So there might be a change in rationale behind it. But again, I would not like to speculate either way. It might or might not work.
Right, sir. And one more point I want to understand is, what are the key entry barriers in the business model set up by EaseMyTrip, looking at the type of valuations the people are commanding today? And definitely, you have guided for a significantly higher percentage in EBITDA terms in terms of the percentage, even higher at 50%. So what are the key entry barriers you feel in the business that you will not attract bigger competition going ahead, the type of numbers now we are showcasing?
See, we have dealt with competition ever since we were born. It's been 14 years, and we have had 6 or 7 heavy players who all have raised a significant amount of capital, while we grew bootstrapping even till to date. To all of our investors, I would like to share one fact, which is in the first 5 years of EaseMyTrip, we only put in INR 15 lakh, 1-5, INR 15 lakh of our own capital in the company. That's the only amount which went inside the company for the first 5 years. And hence, company actually grew while having very strong fundamentals, not by throwing money as a problem.
It would be very, very hard for you to find a bootstrapped consumer take unicorn in India. I believe there are only a couple of them, and EaseMyTrip is one of them. So the foundation of the company is extremely strong, and we look forward to utilize our strong foundation of being extremely high cost-efficient company and by growing via word of mouth and also running -- being the only OTA in India who runs our own call center.
We believe that we are poised to continue our growth, not just in India, but worldwide, as we have mentioned that we have opened up 3 offices. And our Dubai business is going really, really strong; and so is our U.K. business and Thailand business. And we look forward to become the OTA for the world, not just for India, and we really believe that the world is our oyster, given the extremely competitive cost advantage, which is EaseMyTrip has, and on top of that, which India has compared to the developed nations.
We really believe that we can beat a lot of incumbent players across the world by not charging convenience fees where they are charging anywhere between INR 500 to INR 2,000 per passenger as convenience fees because their business model requires so. So these are the significant advantages of our organization has, and we look forward to grow and to create value for all of our shareholders, customers and everyone.
Just a small chip in question, sir, when are the lock-in of shares for the promoters, the deadline getting over?
I would not be able to comment on that. I mean I think this probably would be a public information. I'm also not sure myself.
And sir, I congratulate you especially for the -- not only for not charging the convenience fee, but also for the total refund which your customers are getting in case of [Indiscernible]. And that is really a game changer for air tickets. So kudos to the team and for the ideas also...
Thank you. We have heard this multiple times that having an extra insurance that people would get their money back, if they fall sick, 100% money would be refunded by EaseMyTrip. It's absolutely a big reason why people are switching to EaseMyTrip over others.
Yes, sir. And sir, for this shareholder promotion scheme, what kind of -- what is the amount we are spending? And if you could give the advantage pertaining to -- who would be the section of the shareholders who will be benefiting from this scheme and the amounts we are going to spend?
This scheme is basically for the retail investors who would basically be able to book their flight, hotel, buses at a discounted price because they are the shareholders of EaseMyTrip by using EMTFAMILY as a code. I believe more detailed information is available online.
But any amount you can give that we are sacrificing on? Or we are just trying to bring the brand for -- we will be spending annually on the same?
I do not consider that as an expense. That's a value which we are adding to the life of the shareholders who have added tremendous value at the life of EaseMyTrip. So it's only going to the family. This is how we see that. And I would not be able to give you the exact amount, but it is going back to the family.
Correct. And one more on the hotel package part. For this quarter, I think so this is the seasonality factor because of which the revenues and the profitability has been there? Or what should we look -- what is the understanding for hotel packages on an annual basis? What kind of revenue and the bottom line are we looking from [Indiscernible]?
It's very difficult for me to predict the numbers because the numbers are growing so rapidly for the hotel and non-ASV. And we look forward to continue growing this particularly without burning any holes in the company. As we -- as I said before that we truly believe that businesses are done only for 2 reasons. One is to basically add value to your customers' life; and second is to do it profitably so you can do it consistently.
On VC money, PE money, you cannot do -- you cannot get discounts for a really long period of time. And consistency can only be done if you are doing anything profitably. So we really believe in consistency, and we look forward to grow our hotel and non-air business as we have grown our air business over the due course of time.
But sir, lastly, sir, on the valuation front, what kind of comfort should investors have at -- the type of valuations currently commanded. I think we came with bonus issues, there's a lot of floating. And then again, if you look at your numbers and the type of fees, which we are commanding today, what kind of annual compounded growth can we look to sustain these valuations there? If you could...
I would not be able to comment anything on valuation part. That is for markets to decide. As you can see that last year, we have done our gross booking revenue of INR 3,700 crores. And in this year, in the first 9 months, we have touched almost INR 6,000 crores. This should give you enough comfort of where the company is heading towards and that to doing it profitably.
So again, on the valuation part, I may not be able to comment anything at all beyond this.
Okay. And for the 9 months, the cash generation, can you give the number? In the cash flow, how are...
We report cash flow once every 6 months. So we did report during the quarter 2. And in the next quarter, we will be reporting cash flow again.
Right. Thank you, Prashant-ji, for all the elaborate answer. And truly doing a commendable job in terms of how the best the technology can be used for the benefit of your consumers.
Thank you.
Our next question is from the line of HS with AUM.
Going ahead, would we be able to see any operating leverage with kind of the employee cost not growing in line with the revenues and same holds for other expense?
For employee expenditures, I think you should be able to see some leverage in the next couple of quarters. There was a heavy investment on the employee side, especially since we are growing internationally. But overall, I think, yes, you should be able to see leverage coming in the next couple of quarters.
Okay. And for other expenses also?
As I mentioned about other expenses, some portion of other expenses would basically be -- will grow in accumulation with the GBR as it is a percentage of commissions which we give to B2B2C clients of our own. Hence, some percentage, just like discounts to customers, some percentage of other expense will also be part of the equation.
But again, yes, you're absolutely right, the admin costs and the other costs should not increase as much as we grow over GBR. So yes, there will be some level of operational efficiency, which will come along the way.
Okay. Going ahead, sir, I had one more question. So quarter-on-quarter, our hotel segment revenues have increased from around INR 5.5-odd crores to INR 24 crores and which was negative in the last year. So can you just give clarity on the same?
The numbers have increased. As we have mentioned that we have also started the group bookings and the MICE movement. So certain percentage is coming from the group bookings and MICE movement, and that is why you also see a new line item, which is service cost to the company, which is around INR 10 crores.
So a good portion of increase has happened organically, but there's also one big -- one portion, which is of this new line item, which is the group and MICE booking because of it, the numbers have substantially jumped up.
Okay. And any reason why would it be negative for the same quarter last year, so as given in the results?
Ashish-ji?
Yes. Now as Mr. Prashant said now, all segments are profitable. But last year, it was a discount which we gave in this segment more than the revenue. That's why it was negative.
It was slightly -- I mean, what you're saying is around that INR 50 lakh, right?
Yes. Yes, so it was basically we are trying to breakeven our total segment by whatever commissions we are getting from the aggregators by passing it back to the consumers and grow our hotel business as we are seeing in the results. INR 50 lakh is basically a breakeven according to us.
Okay. And sir, I had this last question. So what kind of EBITDA margins would be a sustainable number going ahead?
As I mentioned earlier, at the current level where we are at that 45%, I believe this number should be sustainable and should only go up as operating levels will continue to exist as we continue to grow our business. I believe that this number should only go up slowly and steadily.
Our next question is from the line of Swapnil Potdukhe with JMFL.
So just wanted to get a sense on your take rates. They seem to be holding up well. But what we have seen in one of the competitors' numbers is that the airline take rates have come off in the recent quarters. So I just wanted to understand...
I'm sorry, on the competitive side, what the airline take rate has?
Airline take rates have come off sequentially. So I wanted to get a sense on like how the take rates are playing out for us on the airline side? And is it a fact that the increase in revenue or GBR share of hotels and tours business helping us maintain our take rates -- at a flattish level or slightly bit up?
No, I don't think so that the 10% of business could impact the take rate of airlines as much. And if you are seeing in the last 3 quarters, our take rates have been pretty stable anywhere between 8.5% to 8.7%. It has only gone up slightly. We do business slightly differently compared to our competitors because of which things might not directly be correlated with what they are seeing. And we are happy to continue enjoying the take rates, which we are enjoying right now. It is pretty stable since last 3 quarters, as you can see.
Can you call out a few factor that were helping you get better take rates than the competition?
Those are industry trade secrets, something which we would not like to describe.
As there are no further questions from the participants, I now hand the conference over to Mr. Prashant Pitti for closing comments.
Thank you. Well, to conclude, I would like to highlight that in our recent acquisition, ongoing brand building investment and our unique no convenience fee model, we are positive that we will continue our exceptional growth journey and remain the fastest-growing OTA in the industry. We will continue to operate with the same disciplined approach that has helped us to deliver profit.
The tourism industry is expected to get a lot of traction in the next coming years, on the back of various projects and schemes undertaken by government towards the development of travel infrastructure in the country. We firmly believe that EMT is best placed to capture the growing opportunities in the periods to follow.
Thank you all for attending today's call. We hope all your queries were answered. Feel free to reach out to us if you have any other further queries. Thank you so much.
On behalf of EaseMyTrip, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.