Buy This Small Cap Multibagger Stock For A Target Price of Rs. 335 In 12-18 Months

Easy Trip Planners Ltd is a small-cap company with a market valuation of Rs 3,118.11 crore. The company's distribution channel includes B2B2C (business to business to customer), and it allows customers to buy travel tickets in India. The shares of the company have climbed from Rs 52.12 on 19 March 2021 to Rs 287.00 as of 28 Feb 2022, 3:30 pm IST on the NSE resulting in a multibagger return of +234.89 (450.71%) in 1 year. On a year-to-date (YTD) basis the stock has also given a multibagger return of +152.39 (113.20%). In the last six months, the stock has given multibagger return of +166.46 (138.10%) and in the last 1 month, the stock has surged +135.18 (89.03%). In the last 5 days, the stock is up by +149.05 (108.05%) and in the previous closing session, the stock is up by +12.35 (4.50%). On January 12, 2022, the firm announced the issuance of bonus shares at a ratio of 1:1. Following this announcement, ICICI Securities has issued a buy call on the stock with a target price of Rs. 335 over a 12-to-18-month timeframe.

Key investment rationale for Easy Trip Planners or EaseMyTrip.com (EMT) as per the brokerage

• Online travel market in India is set to double over the next five years to $31 billion in FY25E, growing at 14% CAGR from FY20 levels.
• Lean cost model and no convenience fee strategy remain key pillars supporting such rapid, profitable growth. This has also led to stickiness by customers with a healthy repeat transaction rate of ~86% in the B2C channel.
• Now, with airlines allowed to operate with their full capacity, we expect further traction in the company's revenues and profitability, going ahead.
• Further benefits would accrue from segments like international air, hotels and bus booking over the next three to four years, which are high margin business but currently having online penetration below 20% levels.

Buy for a target price of Rs. 335

ICICI Securities has claimed that "The company made an announcement of bonus shares on January 12, 2022. The ratio was one bonus share for every one equity shares, 1:1. The record date for the same is March 2, 2022 while the ex-date for the same is today, February 28, 2021 (March 1 being a holiday). Consequently, Easy Trip Planners share price, as per previous closing price, has adjusted to Rs 274/share from Rs 549/share. Accordingly, our target price stands revised to Rs 335/share. We maintain our BUY recommendation on the stock."

According to the brokerage, any further imposition of restrictions on travel and companies adopting work from home policy beyond FY22E could further delay recovery in the business travel are the key risks of the stock which investors should be cautious of.

Disclaimer

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.