Ixigo Shares Drop 13% After Strong Q1 Results Amid Margin Concerns
Traveltech firm ixigo saw its shares fall by 13.6% following robust Q1 FY27 earnings, as investors reacted to increased investments in hotels, technology, and AI, impacting near-term margins.
ixigo, the Indian online travel company, experienced a significant drop in its share price, falling as much as 13.6% to an intraday low of ₹174.15 on the BSE. This decline occurred despite the company reporting strong financial results for the first quarter of fiscal year 2027 (Q1 FY27).
Investors appeared concerned by the company's increased investments in its hotel segment, technology infrastructure, and artificial intelligence initiatives. While consolidated net profit surged 81% year-on-year to ₹34.2 crore and operating revenue rose 13% to ₹356.8 crore, total expenses climbed 15% to ₹337.8 crore due to these growth-oriented expenditures.
Following the earnings announcement, financial services firm JM Financial maintained its 'Reduce' rating on ixigo stock. The firm also cut its 12-month target price to ₹200 from ₹220, citing that sustained investments in hotels and AI capabilities are likely to delay margin expansion.
Despite an 18.9% year-on-year growth in gross transaction value (GTV) to ₹5,524 crore, driven by its bus and flight segments, ixigo's adjusted EBITDA margin contracted by 177 basis points year-on-year to 8.2%. This contraction was attributed to higher employee costs, branding expenses, and ongoing investments. The company also made strategic acquisitions during the quarter, including a 54.66% stake in Brevistay and an increased stake in the train food delivery platform Zoop.