Shares in Ixigo fell nearly 13% after the travel tech firm reported robust quarterly earnings amid concerns over its rising spending on hotels, AI, and expansion initiatives, prompting a cautious outlook from analysts.
Ixigo shares slumped on Monday after investors digested a strong first-quarter update alongside fresh concerns that heavy spending on hotels, artificial intelligence and other growth bets could delay margin expansion. The stock fell as much as 13.6% to ₹174.15 on the BSE before recovering some ground to trade 12.9% lower at ₹175.70 by 14:10 IST. Market reaction came even though the travel technology company reported sharp profit growth and higher revenue, a reminder that earnings quality is being judged as much by the pace of investment as by headline growth.
The company said consolidated net profit rose 81% year on year to ₹34.2 crore in the June quarter, while operating revenue increased 13% to ₹356.8 crore. Total income came in at ₹385.9 crore, EBITDA climbed 65% to ₹53.5 crore and contribution margin rose to ₹144.9 crore. Even so, expenses increased 15% as ixigo stepped up spending across growth initiatives. Gross transaction value advanced 18.9% to ₹5,524 crore, helped by a 39.1% increase in the bus business and a 26.7% rise in flights, but adjusted EBITDA margin slipped 177 basis points to 8.2%.
JM Financial remained cautious. The brokerage kept its “Reduce” recommendation and cut its 12-month target price to ₹200 from ₹220, saying higher spending on hotels and AI-linked capabilities is likely to put off a more meaningful margin recovery. It also trimmed its FY27-FY29 EBITDA estimates by 11% to 15% and lowered EPS forecasts by 5% to 9%. That marks a clear shift from January, when JM Financial had upgraded ixigo to “Buy” with a ₹275 target after a stock correction, arguing that valuation had become more attractive.
The broker’s latest note also pointed to the changing shape of ixigo’s business mix. In May, JM Financial had already flagged that consolidation of Trenes and losses at associate Freshbus could weigh on earnings, even as bus and flight demand stayed resilient. In the latest quarter, ixigo deepened its push into hotels by acquiring a 54.66% stake in Brevistay for ₹65.7 crore and expanding direct hotel partnerships to more than 10,000 properties across nearly 700 towns. It is also building its AI-native ixigo NEXT platform and approved an additional 11% stake in train food delivery platform Zoop for ₹36.4 crore, taking its holding to 73%. Separately, the board cleared a €219,200 investment in its Singapore unit, ixigo Pte Ltd, which will extend an optionally convertible loan to Sqaas.
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