© The Indian Express Pvt Ltd
Tags:
Journalism of Courage
Just over a decade ago, if you asked someone from a smaller Indian town how they booked their train tickets, the answer was almost always IRCTC. Flights? Maybe MakeMyTrip or a local agent. Buses? Mostly offline.
But today, millions across India open one app for all of it: Ixigo.
What started as a utility tool for checking PNR status and train delays has quietly morphed into India’s second-largest online travel agency by gross bookings. And it’s not just surviving among the giants like MakeMyTrip and EaseMyTrip; it’s outgrowing them.
In FY25 so far, Ixigo grew its booking value by 34 per cent, far ahead of its peers. It dominates train bookings, is gaining ground fast in flights and buses, and generates the highest user engagement among all Indian online travel agencies (OTAs).
But here’s the twist: 94 per cent of Ixigo’s users are from tier-2 and smaller cities, a market that’s growing faster than metros and remains underserved by the big players.
With a differentiated strategy, a sharp focus on execution, and projected growth in the coming years, Ixigo is shaping up as a dark horse in India’s travel-tech race. For retail investors, the key question is: Is the market underestimating what this company could become?
Let’s break it down.
To understand what makes Ixigo structurally different and potentially more resilient than most online travel agencies, you need to look closely at the three core verticals that power its business: train, flight, and bus bookings.
Each segment caters to a distinct use case and audience, but together, they form a self-reinforcing ecosystem that builds scale, repeat usage, and margin strength.
Train bookings are where Ixigo found product-market fit, and this continues to be its largest and most defensible vertical. Unlike flights, which are high-ticket but low-frequency, train travel is a habitual activity for millions, especially in tier-2 and tier-3 towns, where alternatives are limited and affordability matters.
In 9M FY25, Ixigo processed 69.85 million train passenger segments, compared to 57.29 million in the same period last year, a growth of over 22 per cent. This scale translated to Rs 5,303 crore in gross transaction value (GTV) from trains alone during the period.
Yet the more important story lies in retention and monetisation. The company earned Rs 330 crore in revenue from train bookings during 9M FY25, with a gross take rate of 6.10 per cent and a contribution margin of Rs 113 crore, or 34.36 per cent.
While the take rate is lower than that of buses, the user frequency is unparalleled. Train users are far more likely to return every month, sometimes weekly, to check PNR status, view train routes, or rebook journeys.
This repeat usage provides two crucial benefits:
● It keeps customer acquisition costs low, since the platform is already embedded in the user’s travel habits.
● It creates organic cross-sell opportunities into higher-margin verticals like flights or buses—especially for last-minute or overflow travel.
Unlike other OTAs that need to constantly “re-acquire” their customers via marketing or discounts, Ixigo enjoys built-in stickiness with its train audience, largely driven by utility features (live train status, PNR prediction, alternative route recommendations) that are unique to its ecosystem.
Flights are where Ixigo is building monetisation depth. While it does not yet dominate this vertical in absolute terms (MakeMyTrip remains a leader), Ixigo has been aggressively gaining ground by tapping into a relatively underpenetrated flyer base—those upgrading from rail travel or booking air tickets for the first time.
In 9M FY25, Ixigo facilitated 6.03 million flight passenger segments, a sharp increase from 4.38 million a year earlier. The segment generated Rs 166 crore in revenue, with a GTV of Rs 3,941 crore.
The gross take rate here stood at 7.94 per cent, and the contribution margin was Rs 76 crore, translating to a strong 45.76 per cent margin.
While the margin dipped slightly from the prior year (due to market normalisation and competitive pricing), flights remain a critical part of Ixigo’s strategy for two reasons:
● They raise the average revenue per user, as air ticket values are 10x those of trains.
● They allow Ixigo to sell ancillary services—like baggage protection, seat selection, travel insurance, and ‘ixigo Assured’, which guarantees no-questions-asked refunds. These not only enhance user experience but also contribute meaningfully to margin expansion.
Unlike older OTAs that often win customers on pricing, Ixigo’s flight business wins on trust and flexibility. For new or cautious flyers, the ability to cancel or reschedule with no penalty is a decisive factor—and Ixigo has made this experience seamless through AI-driven service and simple refund workflows.
Buses are often considered the poor cousin in the OTA playbook, but for Ixigo, they are arguably the most profitable and underappreciated vertical. Through its acquisition of AbhiBus, Ixigo now operates one of the top three online bus ticketing platforms in India, with a deep presence in states like Andhra Pradesh, Karnataka, and Telangana.
In 9MFY25, Ixigo facilitated 13.03 million bus passenger segments, up from 9.34 million in the previous year. The segment generated Rs 131 crore in revenue, with a GTV of Rs 1,248 crore. Most importantly, it delivered Rs 89 crore in contribution margin, a staggering 68.46 per cent margin, the highest among all verticals.
This is a rare case in digital commerce where a category traditionally seen as low-tech and price-sensitive is generating high returns, thanks to:
● Direct integrations with operators.
● Pricing control via owned inventory (especially during peak demand).
● Cross-sell from train users facing last-minute unconfirmed tickets.
Ixigo has also layered value-added services here: ‘Abhi Assured’ allows for no-fuss cancellations or re-bookings, and features like real-time bus tracking, ratings, and digital boarding passes make it a modern, app-first experience in a segment that’s still largely offline in many parts of India.
Each of these verticals serves a strategic function in the broader Ixigo ecosystem:
● Trains create scale and engagement. They are Ixigo’s moat, the gateway to user trust and frequency.
● Flights drive monetisation. They expand Ixigo’s share of wallet and help shift the perception from utility app to premium travel platform.
● Buses deliver margin. They add contribution-heavy volume and help Ixigo tap into routes and regions where air and rail coverage is sparse or constrained.
Together, they give Ixigo a multi-modal advantage that’s hard to replicate. Most competitors excel in one area: MakeMyTrip in flights, RedBus in buses, IRCTC in trains, but Ixigo offers all three in one integrated platform, with superior mobile UX and local-market tuning.
In doing so, it becomes more than an OTA. It becomes the default travel layer for India’s next billion internet users, particularly in the fast-digitising non-metro markets.
Ixigo’s competitive advantage does not come from discounts or brand ads. It is built around product depth, intelligent automation, and a laser focus on user trust, especially for India’s non-metro travellers. These aren’t just features; they are profit-generating levers that make the platform scalable and sticky.
Ixigo has built high-margin ancillary offerings like ixigo Assured (free flight/train cancellations), Abhi Assured (bus bookings with refund flexibility), and Travel Guarantee, which refunds users up to 3x the fare if train tickets remain unconfirmed. These services don’t just boost convenience; they have become a meaningful revenue stream.
In Q3 FY25, the ancillary attachment rate was nearly 30 per cent, meaning almost a third of all bookings included a paid add-on. These services improve monetisation per booking without needing to cut prices or increase acquisition costs, something most OTAs struggle with.
Ixigo handles over 92 per cent of customer service queries via AI chatbots, with minimal human intervention. Refund turnaround time has improved dramatically from 49 hours in FY21 to just 3 hours and 39 minutes in Q3 FY25.
This matters because customer support is a major cost driver in OTAs. With automation, Ixigo keeps service quality high and costs low—essential for maintaining earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins as volumes scale.
Ixigo’s features like Price Lock, alternate train combinations, and a Generative AI trip planner move the user experience beyond just listings. Instead of forcing users to compare hundreds of options, Ixigo helps them make decisions faster, especially in uncertain or low-infrastructure routes.
These tools are especially relevant in tier-2 and tier-3 cities, where trust, simplicity, and flexibility matter more than a sleek interface.
For Ixigo, these are not cosmetic features—they form the foundation of its platform-level moat. They:
● Increase repeat usage and retention.
● Boost margins through premium services.
● Allow the company to scale without proportionate cost increases, a key reason behind its improving EBITDA and PAT trajectory.
In a market where most platforms chase growth through cash burn, Ixigo’s model is different: it grows by being useful. And that utility, now enhanced by AI and automation, is proving hard to copy.
For a high-growth digital platform like Ixigo, valuation is not just about today’s earnings, as it’s about how efficiently the company can convert scale into profits over time. With profitability already achieved and margins expanding across business lines, the market is beginning to take notice. But the key question is: how much of this is already priced in?
As of Q3 FY25, Ixigo trades at around Rs 153 per share, implying a market cap of approximately Rs 6,000 crore. On trailing 12-month earnings, the company’s valuation implies a P/E multiple of ~127x FY24 earnings.
That may seem high at first glance, but consider the context:
● Ixigo is profitable, unlike many internet peers at similar stages.
● Revenue grew 42% YoY in Q3 FY25, with GTV up 48%.
● Adjusted EBITDA for 9M FY25 stood at Rs 656 crore, already exceeding FY24 full-year EBITDA.
● Contribution margin across segments has improved without relying on aggressive discounting.
This makes Ixigo one of the few Indian tech companies demonstrating both growth and margin expansion, which can justify premium multiples if sustained.
While valuation today looks rich, several operational levers could support further upside if executed well:
Exporting train-scale playbook into buses and flights: Bus segment already has the highest contribution margins (~68 per cent), while flight volumes are scaling with ixigo Assured and other ancillaries.
Expansion into hotels and holidays, hinted at in Q3 investor commentary, could open new revenue streams.
Export growth through inbound travel or SaaS-style B2B segments could provide non-linear upside.
However, these are long-term bets, and the stock’s near-term movement is more likely to be earnings-driven rather than multiple-driven from here on.
Ixigo’s core strength, train ticketing, is also its concentration risk. The platform relies heavily on its partnership with IRCTC, which, while stable for now, remains non-exclusive and subject to renegotiation by 2028. Any changes in API access or commissions could impact volumes and user experience.
There’s also increasing competition from MakeMyTrip’s return to the budget segment, and a rise in regional aggregators targeting Ixigo’s tier-2 base. Moreover, if marketing intensity spikes in this space, Ixigo’s lean cost structure could come under pressure, especially in flights.
On the financial side, while EBITDA margins have crossed 10 per cent, they are still modest relative to other digital winners. If operating leverage stalls, valuation compression could follow.
Ixigo is not in its early innings anymore. Its model has scaled, profitability has kicked in, and user engagement is proven. Yet it remains a transition story, moving from being a high-frequency utility app to a full-stack travel monetisation platform.
For investors, the stock today represents a bet on continued execution. Much of the initial re-rating has happened. The next leg will depend on:
● How well Ixigo deepens its revenue per user.
● How it manages competitive intensity.
● And whether it can build additional high-margin services beyond tickets.
At current levels, it may not be undervalued, but nor is it wildly overpriced, as it reflects optimism with a demand for delivery.
Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting.
Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He holds an FRM Charter along with an MBA in Finance from Narsee Monjee Institute of Management Studies.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
