Easy Trip Planners (EaseMyTrip) share price drops 10% due to co-founder stake sale and financial performance decline.

Easy Trip Planners Shares Fall 10% Due to Co-Founder Stake Sale and Weak Financials

Shares of Easy Trip Planners Ltd, also known as EaseMyTrip, saw a sharp decline of 10% during early trading today. The stock dropped to Rs 15.42 on the National Stock Exchange (NSE), a decline of 9.51%. In total, the stock saw a turnover of Rs 127.43 crore during the session. This decline came amid news that the company’s co-founder, Nishant Pitti, is planning to sell his remaining 14% stake in the company.

Easy Trip Impact of the Stake Sale

As per reports, Pitti intends to sell 50,37,21,910 shares at Rs 15.60 per unit, which is an 8.45% discount compared to the stock’s previous closing price. This follows his earlier stake sales in the company over the past few months, further raising concerns among investors. This significant stake reduction has resulted in a wave of selling, contributing to the recent drop in EaseMyTrip share price.

In September, Pitti sold 1 crore shares at Rs 38.28 each, 16.91 crore shares at Rs 37.22 each, and 6.73 crore shares at Rs 37.42 each, totaling 24.65 crore shares (or 14% of the company), worth around Rs 920 crore. Prior to that, in June 2023, he sold another 6.25 crore shares at Rs 42.60 per share. As the stock continues to face downward pressure, EaseMyTrip share has fallen 16.56% in 2024 and has dropped 23.78% from its 2024 highs.

Ex-Bonus Effect and Institutional Interest

Another factor that contributed to the fall in Easy Trip share price is the stock turning ex-bonus in a 1:1 ratio on November 29. This event had an impact on its trading behavior. Despite these declines, there is some optimism as institutional investors are expected to participate in a fresh block deal. Funds such as CRAFT Emerging Market Fund PCC – Elite Capital Fund, Multitude Growth Funds Limited, and Nexpact Limited are reportedly among the interested buyers in this deal.

Financial Performance and Declining Profitability

The recent financial performance of EaseMyTrip has also played a role in the drop in its stock price. For the September quarter, Easy Trip Planners reported a 45.16% drop in profit, which fell to Rs 25.87 crore compared to Rs 47.18 crore in the same period last year. Revenue growth was modest at just 2.1%, reaching Rs 144.67 crore compared to Rs 141.69 crore in the same quarter of the previous year.

The company’s EBITDA also took a hit, falling to Rs 42.29 crore from Rs 67.65 crore year-on-year. The EBITDA margin dropped significantly to 28.2% from 46.8%. However, not all news was negative. The company’s gross booking revenue (GBR) for the quarter stood at Rs 2,075.64 crore, driven largely by the growth in its non-air business segments.

Hotel Segment Shows Strong Growth

One area where the company saw notable improvement was its hotels segment, which experienced remarkable growth. The GBR for the hotels segment stood at Rs 241.40 crore, showing a significant 178.4% year-on-year increase. This performance helped offset some of the weaknesses in other areas of the business and showed that EaseMyTrip is successfully diversifying its revenue sources.

Conclusion: Easy Trip

While EaseMyTrip shares have faced a sharp decline, the company’s growth in its non-air business segments and the strong performance of its hotels division offer some hope for the future. However, the ongoing stake sale by the co-founder and concerns about the company’s financial performance are likely to continue weighing on the stock in the short term. Investors will be watching closely for any updates on the stake sale and how the company navigates the current challenges. As of now, EaseMyTrip share price remains under pressure, with uncertainty looming over its immediate future.

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