EaseMyTrip profit dips, but bold acquisitions hint at a larger transformation in the making

Easy Trip Planners Limited (NSE: EASEMYTRIP, BSE: 543272) saw its shares climb over 4 percent to ₹9.22 on Thursday after unveiling a dual-pronged update that combined its Q1 FY26 earnings with news of three strategic acquisitions. The announcement underscored the company’s intent to deepen its foothold in both domestic and international travel-related sectors, with a particular focus on hospitality, premium commercial real estate, and lifestyle-linked diversification.

The acquisitions include a 50 percent stake in Three Falcons Notting Hill Limited, the owner of the luxury boutique Three Falcons Hotel in London; the full acquisition of AB Finance Private Limited, which owns a prime commercial property on Gurugram’s Golf Course Road; and an in-principle agreement to invest in Vashu Bhagnani Industries Limited, a diversified player in entertainment and real estate. All three deals are structured as share swap arrangements and remain subject to board, shareholder, and regulatory approvals.

How do the new acquisitions align with EaseMyTrip’s long-term strategy in hospitality and infrastructure?

For EaseMyTrip, the London investment marks its first foray into the global hospitality market at the ownership level. The Three Falcons Hotel, located in the St John’s Wood area near Lord’s cricket ground, is positioned to serve high-value business and leisure travellers. Management indicated that the entry into the London market would help the company offer curated, experience-driven stays that align with its brand’s end-to-end travel positioning. The timing is significant: the global hospitality industry, valued at USD 5.71 trillion in 2024, is projected to grow to USD 7.23 trillion by 2029, with boutique hotels increasingly capturing market share from standardised chains.

The Gurugram acquisition adds a strategic domestic asset to EaseMyTrip’s portfolio. Situated in a premium corporate corridor, the property offers the flexibility to house expanding operations, particularly in high-margin corporate travel, MICE (meetings, incentives, conferences, and exhibitions), and ancillary service lines. Given the company’s steady expansion into business travel solutions, the asset is expected to serve as both an operational hub and a tangible balance sheet strengthening move.

The potential stake in Vashu Bhagnani Industries Limited offers another layer of diversification. While primarily engaged in entertainment and real estate, the business has synergies with travel marketing and event-based tourism — areas where EaseMyTrip has room to innovate. Analysts noted that cross-promotions between film or live events and travel packages could drive incremental revenues, especially among younger, experience-seeking demographics.

What did Q1 FY26 results reveal about EaseMyTrip’s operational performance and revenue mix?

For the quarter ended June 30, 2025, EaseMyTrip reported gross booking revenue (GBR) of ₹20,658 million, down from ₹22,745 million in the same quarter a year ago. Revenue from operations came in at ₹1,137.9 million, representing 5.5 percent of GBR compared with 6.7 percent in Q1 FY25. The drop in contribution margin reflected a challenging airfare environment, competitive pricing pressure, and increased spending on customer acquisition.

Net profit after tax fell sharply to ₹4.4 million from ₹339.3 million a year earlier. This decline was attributed to higher marketing spend, operational expenses tied to expansion, and lower yields in the air ticketing business. However, non-air segments offered a strong counterbalance. Hotel and holiday package bookings surged 81.2 percent year-on-year to 3.3 lakh room nights, while trains, buses, and other bookings rose 41.4 percent to 4.3 lakh transactions.

Internationally, the company’s Dubai operations delivered a standout performance, with GBR jumping 151 percent year-on-year to ₹3,180.6 million. Management attributed this growth to rising outbound demand, improved distribution partnerships, and an expanding footprint in the Gulf region.

How might institutional investors interpret the earnings alongside the acquisition announcements?

Institutional sentiment is likely to weigh the mixed signals. On one hand, the significant drop in quarterly profit raises near-term concerns about margin resilience and the cost of expansion. On the other, the acquisitions reflect an asset diversification strategy that could reduce dependency on the cyclical air travel segment. The London and Gurugram properties introduce relatively stable, potentially appreciating assets into the mix, while VBIL offers an option on higher-margin experiential and event-linked travel products.

Investors who have followed EaseMyTrip’s trajectory since its IPO in 2021 will note that the company has consistently pursued an asset-light operational model, yet has not shied away from opportunistic acquisitions when they reinforce its ecosystem. The 2021 purchase of Spree Hospitality, the 2022 acquisition of YoloBus, and the 2023 majority stakes in Dook Travels, Guideline Travels, and Tripshope all illustrate a pattern of building adjacencies to the core OTA business. The current acquisitions fit squarely within this playbook.

How does EaseMyTrip compare to MakeMyTrip and Yatra in the current competitive landscape?

MakeMyTrip remains the market leader in India’s OTA segment by gross bookings, with a strong position in international outbound travel and deep hotel inventory partnerships. It has also been aggressively expanding its experiences and activities vertical. However, MakeMyTrip’s profitability profile has been more volatile, with heavier marketing spends relative to EaseMyTrip’s historically leaner cost structure.

Yatra, on the other hand, has maintained a stronger B2B travel business, particularly in corporate travel management, but has lagged in consumer-facing brand growth compared to the other two players. EaseMyTrip’s steady build-out of non-air verticals, combined with its new London and Gurugram assets, could help it straddle both the high-volume B2C segment and the stable-margin B2B corporate travel segment more effectively than Yatra in the medium term.

Analysts suggest that if EaseMyTrip can sustain its higher growth rates in hotels and holiday packages — a segment that typically offers better margins than flights — it could close the gap with MakeMyTrip’s revenue diversification profile while retaining its cost discipline advantage.

Can these strategic moves materially change EaseMyTrip’s revenue structure in the next three years?

EaseMyTrip’s revenue has historically been dominated by flight bookings, which accounted for nearly 80 percent of its operational revenue mix in Q1 FY26. However, with hotel and holiday package growth accelerating and the company deepening its asset base in both India and the UK, there is scope to increase non-air revenue contribution towards 30–35 percent within three years.

The London hotel acquisition offers a unique selling proposition for outbound Indian travellers who want curated packages with stays in a premium, owned property. The Gurugram asset provides operational leverage and brand visibility in one of India’s wealthiest business corridors. Coupled with VBIL’s entertainment portfolio, EaseMyTrip could offer bundled travel-plus-event packages that competitors might find hard to replicate without similar owned or affiliated assets.

What are the key risks and forward-looking considerations for investors?

The main execution risks include integrating the new assets without disrupting the existing cost-efficient model, navigating foreign regulatory environments in the UK hospitality sector, and managing currency fluctuations that could impact the London property’s returns. There is also the challenge of sustaining high growth rates in non-air segments while maintaining customer acquisition efficiency.

From a macro perspective, the Indian online travel market is projected to grow to USD 31.38 billion by 2030 at a CAGR of 10.5 percent. This expansion will be driven by rising incomes, increased digital adoption, and government initiatives to promote domestic tourism. EaseMyTrip’s diversified footprint across India, the Middle East, and now the UK gives it a multi-market growth profile, but also exposes it to region-specific shocks, from fuel price volatility to geopolitical tensions.

In the near term, the company’s focus will likely remain on scaling its Dubai operations, accelerating the hotel and holiday vertical, and preparing the London and Gurugram assets for integration into its sales and marketing ecosystem. Investors will be watching for early signs of revenue synergies, such as bundled London travel packages or corporate event hosting in Gurugram.

Will EaseMyTrip’s asset-backed expansion and non-air growth strategy redefine its position among India’s top OTAs over the next three years?

EaseMyTrip’s Q1 FY26 update shows a company in transition — willing to sacrifice short-term profit margins to secure long-term, strategically aligned assets. While the acquisitions introduce new operational layers and integration complexity, they also provide levers for revenue diversification and customer engagement that could strengthen competitive positioning against both MakeMyTrip and Yatra.

If management executes effectively, the next three years could see EaseMyTrip evolve from a flight-led OTA into a broader travel-and-hospitality ecosystem player with tangible assets anchoring its brand in both India and key international markets. For investors, the stock now offers a blend of growth potential in high-margin verticals and asset-backed value creation, albeit with the usual integration and market risks.