Letter to Shareholders
Dear Shareholders,
As we sit down to write this first shareholder letter after our successful stock market
listing, we're filled with a deep sense of gratitude and pride. FY24 will always hold a
special place in our hearts - a year marked by resurgence, growth, and unforgettable
milestones. It was a year that created memorable milestones for our company and also
inspired us to sharpen our focus and strengthen our path forward.
Our journey of becoming India's leading online travel agency for the "Next Billion
Users" has been fueled by the trust and support of millions of travellers who've
chosen apps from the ixigo group as their trusted travel companion. We've poured our
hearts into building platforms that don't just meet the needs of Indian travellers but
truly understand them. From planning to booking and managing trips across rail, air,
buses, and hotels, our goal has always been to make travel smarter and more seamless for
everyone.
At ixigo, we believe in the power of technology to create meaningful connections. In a
world that's rapidly evolving, we see technology as more than just a tool - it's a bridge
that brings us closer to our travellers, especially the ones from Tier II & III
cities, helping them make informed decisions with ease. We see ourselves not just as a
ticket booking portal, but as a travel information, utility, planning and booking platform
that remains contextually relevant before, during and after the trip. Our commitment to
leveraging artificial intelligence pre-dates its emergence as the next big thing, and we
already deploy it meaningfully to make a difference in the lives of the people we serve,
our ixigoer family.
Our mission is to make travel as seamless and worry-free as possible, and that's
reflected in every product we create. Whether it's ensuring peace of mind with the
flexibility travellers need with our free modification and cancellation option,
"Assured Flex," or our smart solutions, such as "Train Alternates,"
designed to help travellers find confirmed train bookings, even when trains on the route
are full.
For us, innovation is never about rolling out features - it's about truly understanding
and addressing the pain points of our customers and launching products with the pure
objective of helping travellers out. This approach not only creates immediate value for
our users but also creates long term value for our shareholders. This playbook is hard as
there are no immediately obvious benefits to this approach, but many years later when the
benefits start accruing, they do so with compounding and deepening our relationship with
our users.
Industry & Company Growth
As the Indian travel market grows, online travel is playing an increasingly vital role.
As per the WTTC, the sector is expected to contribute Rs. 36.8 trillion to the GDP by
2033, about 7% of the economy. With the government enhancing investments in rail, road and
destination infrastructure, the overall travel and tourism sector is expected to continue
growing way faster than GDP growth rates, for the decades to come.
We have set new industry benchmarks for transparency by going beyond the norm in our
disclosures. We're not just reporting our segment revenue and contribution margins with
unprecedented clarity, but we're also leading the way in sharing key customer experience
metrics like the percentage of calls answered within 2 minutes and refund processing
times.
Our goal is to elevate the standard of transparency and responsiveness in our industry,
tackling the pain points that matter most to our customers.
At ixigo, we're deeply committed to making travel simpler and more accessible. Our
diverse range of products and services are designed to meet the unique needs of Indian
travellers, particularly as infrastructure improves in Tier II and III cities, with new
airports, improved railway station infrastructure, more capacity, and better highway
connectivity.
Our strategic acquisitions of Confirmtkt and Abhibus have strengthened our presence in
train and bus travel, allowing us to serve our NBU travellers better across the country.
We have continued to gain steady market share in all three key verticals of flights, buses
and trains during the year. Our focus on creating the best possible customer experience
has driven remarkable growth as reflected in our financial performance for FY24 -
recording
a 38% YoY increase in Gross Transaction Value (GTV), surpassing H10,000 Crore(s). Our
revenue from operations grew 31% YoY in FY24 to Rs. 655.9 Crore(s), and Profit After Tax
(PAT) grew by 212% to Rs. 73.1 Crore(s). Our operating leverage has started to show in
FY24 as we expanded our Contribution Margin to Rs. 293.8 Crore(s) and delivered a robust
Adjusted EBITDA of Rs. 55.3 Crore(s), despite our continued investments for longer-term
growth.
Our large and loyal user base of 480 Mn annual active users cumulatively across our
website and apps has enabled us to introduce new, value-added services, boosting our
ancillary attach rate to 31% in FY24. As of March 2024, our group has surpassed an
impressive benchmark, with over 76.78 Mn monthly active users. The scale of users we now
serve is mind-boggling, with 95.6 Mn passenger segments booked in FY24. Our flights
business has also outperformed with 77% YoY growth in passenger segments, reflecting the
trend of premiumization as more and more travellers move into the air category with rise
in disposable incomes.
Some Thoughts on AI
This year, we also introduced "PLAN by ixigo," our generative AI-based trip
planner which helps travellers with curated personalised itineraries and a new and
improved version of "TARA," our AI-powered customer service chatbot, which
provides realtime support, addressing concerns instantly, on chat, and progressing into
being able to do it over voice.
The AI revolution is one of the most disruptive shifts in human history, with more
progress expected in the next 5 years than the past 500. As AI infrastructure improves
constantly, its integration into operating systems and apps will make customer experiences
seamless, intuitive, and pre-emptive. The ability to get answers to any question in
realtime on your phone using voice and video as input would account for most of such
day-to-day usage. With some open-source models now being as good as proprietary ones,
AI will become more accessible, enabling companies to boost speed, efficiency, and
productivity.
In this new world, even those who don't code can launch apps quickly, with AI, using
just the language they speak. While this simplifies app development, finding the right
problem to solve and building distribution remains challenging. Companies with established
distribution channels and brands will benefit the most from AI-driven innovations, as they
can reach large customer bases quickly.
As AI becomes commoditized, how we use these models to solve customer problems and
personalise experiences will set companies apart. Our strong distribution and
top-of-the-funnel advantages position us uniquely in this evolving landscape. However, as
we embrace AI for efficiency, we must also invest continuously to stay ahead in this
fast-paced environment and build AI expertise within our organisation.
House of Brands Approach
At ixigo, we believe in the power of offering specialised apps that truly understand
and cater to the unique needs of different travellers for their dominant use-case. This
approach, known as the Multi-Brand or House of Brands strategy, allows us to provide a
more personalised and focused experience for each user.
For instance, someone who frequently books bus tickets will find our bus-focused app
AbhiBus much more helpful, as it is designed with those specific needs in mind. Similarly,
the ixigo trains app or ConfirmTkt app will be the perfect choice for avid trains
travellers, offering all the information and services one needs with more localised
content and utility features suited to Tier II / III travellers in addition to an enhanced
and fast booking experience.
We also know that your travel needs don't stop at just one type of transportation, and
people switch modes based on convenience, price and availability. That's why we've made
sure all our services are available within each app. So, whether you're using our trains
app, bus app, or flights app, you can easily book whatever you need - be it flight, bus,
or train tickets - without switching between apps, with hotel bookings available across
all the apps as well.
Our Public Debut: A New Era of Growth
On June 18, 2024, ixigo embarked on a new chapter of growth by debuting on the public
markets.
We were thrilled to receive an overwhelming response to our IPO, with the issue being
one of the most successful ones among new-age tech IPOs, oversubscribed by 98.34 times,
fueled by strong demand from institutional, HNI, and retail investors. ixigo closed its
listing day with a remarkable 78.2% premium over the issue price, making it one of the
strongest openings for an Indian startup on day one as a publicly traded company. This
success is a true testament to the trust and confidence our users and shareholders have
placed in us. The strong public response to our IPO has made us ever more committed to
delivering the best customer experience to every traveller.
Way Forward
We're continuously finding new ways to add value to our growing user base through
innovative services and smart cross-selling within our ecosystem. Over the years, our
efforts have led to the creation and adoption of our value added services and ancillary
products. While we've made significant strides, we know that further growth in this area
will be challenging. From here on, we'll rely on AI-driven optimizations to continue
enhancing user experience and monetization.
In the flights segment, despite the market's slowing growth towards the second half of
the year, we've seen faster-than-market gains in the last two-quarters of FY24. The
domestic flight market faces capacity constraints and high fare levels, and while we
expect continued growth, we may need to invest more in firsttime booker discounts and
branding to keep up the momentum, which could impact our revenue growth in the short term.
On the bus front, there's immense potential, with less than 20% of tickets currently
booked online. Although supply growth is slower than we'd like, the entry of new operators
such as Freshbus,
Flixbus, and Nuego offers hope.
As the second-largest bus OTA, we're committed to enhancing our product, building
trust, and expanding our supply to capture more market share. However, this will be a
gradual process, balancing growth with margin considerations.
For trains, we anticipate steady growth and improvements in market share driven by our
product, word of mouth and focused branding and user acquisition initiatives.
While capacity increases have been modest, we're optimistic about future expansions
with the upcoming freight corridors and new train services such as Amrit Bharat, Vande
Sleeper, and Namo Bharat in addition to the increase in number of Vande Bharat trains,
which will enhance the travel experience for our users. We also launched our hotel OTA
business in December 2023 and have been achieving double-digit monthly growth ever since,
albeit from a low base. With the launch of our hotels OTA, there is further scope to
cross-sell/up-sell to our captive user base over the coming quarters.
In our business, the most important and strategic asset is talent. We wholeheartedly
appreciate and commend our committed team of ixigems for their steadfast dedication and
the resilience they have shown over the years. Their tireless efforts have been
instrumental in delivering exceptional experiences to our users throughout these 17
wonderful years.
We also extend our sincere thanks to all our stakeholders for their continued trust and
support, which have been crucial to our success.
Best Regards,
Aloke Bajpai & Rajnish Kumar