In the previous two to three years, the Indian stock market has given fantastic results, with most stocks providing multibagger returns to stockholders. In the last 1 year, Easy Trip Planners (EASTRI) have delivered multibagger returns. Easy Trip Planners Ltd's stock has climbed by 174.20 percent on the NSE in the last 1 year. ICICI Securities, a domestic brokerage company, is bullish on this stock, assigning a buy call rating with a target price of Rs 640.00 for Easy Trip in the next three months.
Investment rationale for Easy Trip Planners according to ICICI Securities
- With the unlocking of economy, Easy Trip remain best proxy play vs airline companies to play on the travel recovery. The stock underwent slower pace of retracement as in the past five months it retraced 50% of preceding five month's rally (Rs 161-718), indicating robust price structure. Hence, it offers fresh entry opportunity with favourable risk reward set up.
- We expect the stock to resolve out of ongoing consolidation (Rs 600-480) and eventually head towards Rs 640 in coming months as it is the 123.6% external retracement of February decline (Rs 620- 541).
- The 100 days EMA acted as strong support as on multiple occasions dip towards 100 days EMA offered an incremental buying opportunity since May 2020.
- While air ticket continues to occupy the larger revenue share, the recent acquisition in the high margin business segment like hotels (Traviate - B2B tehnology platform, Spree Hospitality - hospitality management company) and bus booking segment (Yolo - intercity mobility platform) would help bolster margins and become fully integrated player in the tourism space, going forward.
- At net take rate of ~5.5% (on net basis), we expect revenue and PAT CAGR of 53.8% and 44.3%, respectively, during FY21-24E. We believe the low cost model and no convenience fee strategy would strongly support the company in gaining market share further from competitors, going ahead.
Buy for a target price of Rs 640.00
As per the brokerage, over past five months stock retraced 50% of the preceding five months rally (Rs 161-718). A slower pace of retracement augurs well for next leg of up move.
On the NSE, the stock is now trading at a market price of Rs 285.80 as of 3:30 pm IST on March 10, 2022. Within a three-month target period, the brokerage has set a target price of Rs 640.00.
The stock has been picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.