Category
đź—ž
NewsTranscript
00:00Hello and welcome you watching the small and mid-cap show. I'm Mahima Vachrajani and with
00:04me is Harsh Saita. Well, we have two very interesting managements lined up for you today.
00:09The first one is Ease My Trip. Well, lots happening with this company and we are joined
00:12by Mr. Prashant Pitti, who is the co-founder at Ease My Trips, who joins us now. Welcome
00:17to the show, Prashant.
00:19Prashant, a lot is happening when it comes to, you know, Ease My Trip. A lot of multiple
00:26acquisitions. So, you know, all over, we want to know, you know, in terms of what's happening,
00:34what are the kind of acquisitions that you're doing? I'll start with, you know, the recent
00:39investment in Rollins and FLED, which is, you know, into medical tourism. So I want
00:43to understand that, you know, what are the kind of synergies that you're trying to build
00:48in this particular acquisition?
00:49No, firstly, happy to be on the show and provide the explanation for the things which are happening
00:55at Ease My Trip. Firstly, I would like to set the context. The company has been growing
01:00ever since. We were a bootstrap company till the time we got listed. And from the listing
01:06till today, our business has grown by almost four times. The travel, the co-travel business
01:10has grown by four times. The profitability has almost grown by about five times over
01:15the period of last three years. So the company is in very well in solid position to continue
01:19and grow the travel-related businesses. However, at the board level, we have also recently
01:25decided that we are going to be a bit diversified. And the idea behind that is that, you know,
01:30as you would know, that there are very few companies who have been extremely disciplined
01:34and have been bootstrapped. Internet companies to become a bootstrap listed company is a
01:39very, very rare phenomena. And from that, you should understand that the promoters probably,
01:45you know, possess certain knowledge, which are not very common. And for that, the board
01:50has decided that we will basically find another level of, find another kind of companies like
01:56Ease My Trip in different domains who are bootstrap, but could potentially be a listed
02:01company in the next three to four years time. And we would be basically funding them and
02:06helping them with our advisory, with our technology, with our consumer base and help them grow
02:10faster than before. And for this, we are taking minority stake in those companies and
02:16a couple of acquisitions, which you have seen in the recent in respect to that.
02:21Right. Prashant, Harsh also joining in. Is this collaboration of sorts only India-centric
02:29or is it with regard to more geographies outside of India as well? Because medical tourism,
02:37of course, is a growing sector in India. It's also a niche. So I want to try and understand
02:44as to how this play is going to work for you. So with respect to medical tourism, it cannot
02:50be just India specific. For example, the PFLEDGE company is actually a Dubai based company.
02:56They already 30% of their business right now is actually allowing people whom they have identified
03:01problems and can be solved in India related to surgeries. They're actually sending those
03:06passengers to India. They have tie-ups with various hospitals and they can directly contribute to
03:11E-Smart Dubai business. E-Smart Dubai business is growing rapidly. Last quarter, we did business
03:16of over 126 odd crores. And we believe PFLEDGE can help E-Smart Dubai business monumentally
03:25by contributing to it. So by the nature of medical tourism itself, which is growing really rapidly
03:29and India is becoming a very hot destination for medical tourism,
03:34we believe that it has to be at the global scale. All right. And Prashant,
03:38what are the kind of revenues that you're expecting from this particular acquisition?
03:43And secondly, the margins in the medical tourism business are much higher. So are
03:50you expecting your blended margins to go up? Absolutely. And more than that, but however,
03:56these are minority acquisitions. So they will not directly play a role onto E-Smart's margins
04:02since they're on the minority side. The high-level understanding is that in the future as well,
04:08we might do a playoff in 4-H and grow the company in various other domains as well,
04:16probably looking for more asset-line technology-driven companies, which are something
04:20like E-Smart Trip, Bootstrap. And for this, we are going to very shortly start a website as well
04:25to allow people to apply their companies to become a part so that E-Smart Trip can invest in them.
04:32So this is the larger play which we are looking at. EV is a whole different game. We already have
04:37a company called YOLO Bus, and YOLO Bus is operating about 80 odd buses across India right
04:43now. When we acquired the company, it only had 2-3 buses. Now it is about 80 buses. We really
04:48look forward for YOLO Bus to grow, to become 2000 plus buses in the next couple of years.
04:54And for that, we found out that the best unit economics is actually in the EV buses space,
04:59not the diesel buses. And with respect to that, we started searching for
05:04EV buses, but we couldn't find many suppliers. There is a huge shortage over there.
05:08And that is when we decided that we will basically start manufacturing of EV buses ourselves
05:14for YOLO Bus, the operating arm to consume, and also for other government agencies or other
05:21agencies to buy from us. Got it, Prashant. Prashant, how quickly are you able to set this
05:26business up? How quickly does the ball start to roll, especially on the EV bus side of things
05:32and with regard to YOLO Bus? So YOLO Bus is already an operational
05:36company doing wonderfully well for us. In terms of the EV manufacturing unit,
05:42we have identified the right person to become the CEO, Mr. Manoj Soni, who is a veteran in the
05:46industry. He comes from Ashok Leyland. We have appointed him as the CEO of the company and
05:51he's rolling the ball right now. We are in the phase of doing the R&D and figuring out the right
05:56product. And then the next phase will come is basically to set up the manufacturing unit.
06:00I believe in the matter of 2 years, we should be able to launch the manufacturing unit and
06:07which would have the capacity of rolling out 2000 to 3000 buses on an annual basis.
06:12All of those buses will be used by you, by EaseMyTrip or would you also be selling them
06:18outside, maybe to the government etc.? Correct. So not necessarily all of them
06:25will be used internally by YOLO Buses. Yes, first demands for YOLO Buses will be fulfilled
06:29and any extra capacity. There's a huge shortage of EV buses. There is a very high demand from
06:35the government sector to log in EV buses for intra-city and inter-city travel.
06:40We would look forward to fulfill those demands as well.
06:42And that will shrink your margins, that part of the business?
06:47Not really. That's also as I said that there's a huge supply
06:51crunch in the market and hence the demand could pay pretty well.
06:57What will your margins on that particular business be? What are you anticipating
07:01that number to be around? Around 10 to 15% while our current
07:05margins are at about 8%. Got it, got it. With regard to your
07:10incubation business, now that's something which is differentiated because you spoke about InfoEdge
07:15and how InfoEdge has done. That's going to be unique. So how much in terms of cash flow do you
07:20all do, free cash flow do you all do annually and how much of that will you be putting to use
07:27for your incubation business and how much for your current business of EaseMyTrip which you
07:32are already venturing into several businesses? So as you would know, EaseMyTrip is a free cash
07:38flowing company where we have a positive cash flow. Last year, we did a cash flow of about
07:43130 or 124 crores. So as a profitable company, we will utilize our free cash flow to basically
07:51invest in these young companies which potentially can become a listed company.
07:57Very shortly, we are also launching a platform called RaiseOnce.com. RaiseOnce basically means
08:03that just raise once to be able to get to a listed space from bootstrap to listed just by raising
08:09once. And hopefully that RaiseOnce will come from EaseMyTrip and we're looking forward to
08:15help those companies to grow faster and get to a listing space.
08:19Right. So Prashant, you talked about this RaiseOnce thing. So I want to understand more
08:24on that as well as you've also introduced ScanMyTrip. So I want to understand both
08:29of these businesses first and then get into the financial aspect of that.
08:33Sure. ScanMyTrip is basically in collaboration with ONDC. This is first of its own kind
08:39where EaseMyTrip has become a seller and as well as a buyer of travel related services.
08:45We have co-jointly created the APIs and on the basis of this, we will be able to sell
08:52and buy on ONDC. ONDC is picking up really well and we want to be ahead of the curve,
08:56which is why EaseMyTrip is the first OTA which has launched ScanMyTrip, which will allow various
09:03lakhs and lakhs of buyers and suppliers on ONDC to utilize our services.
09:08All right. So this is targeted more towards companies per se, companies and corporates?
09:14Not necessarily. There are a lot of MSMEs which are already using ONDC. So for MSME bookings,
09:21for individual bookings, ONDC is a platform, it's a protocol basically in exchange of an API and
09:29ScanMyTrip has basically become one of the buyers and the suppliers both on ONDC.
09:36Okay. And then what is the kind of revenues that you're expecting from this particular
09:43ScanMyTrip introduction and what are the kind of margins there?
09:47So again, it's too early for us to say all this because we are the pioneers in the industry.
09:53This is the first OTA which is getting launched on ONDC platform and hence it would be difficult
09:59for me to predict what kind of volumes we should expect. However, we already know that ONDC is
10:05highly, highly successful in basically getting the adoption. And if the adoption has come for
10:10non-travel usage, I'm assuming that the adoption will also come for travel usage.
10:15And hence I'm looking forward to see numbers grow rapidly on ONDC.
10:19Will that affect your business Prashant because isn't that in some form competition for your
10:25business? Not really because besides the flight booking, there are various other bookings
10:30for which E-SmartTrip does not have very high market share. For example, in the holiday space,
10:35for example, in the transfer space, E-SmartTrip does not have a very high market share and
10:42ONDC, I believe will actually add a lot of value in such spaces.
10:47Got it. And Prashant, with regard to quantum, is there a particular ballpark number that you all
10:53will be looking to invest through your new platform, which you all are putting up into
11:00companies, raise once as you call it? How much would that quantum be?
11:06There is no quantum which we have set right now. Both the deals which have happened are actually
11:10equity swap at the moment, the ones which is with the Rollins and the PFLEDGE.
11:14And hence there is no cash outflow, which is happening for this 90 crore deal.
11:18Okay. So Rollins is part of these acquisitions, which are going to be making these minority
11:23acquisitions. Correct. Rollins and PFLEDGE,
11:26both are part of this minority acquisition, which we are making. And I'm looking forward to
11:31more such companies which are basically doing wonderfully well and could become the next E-Smart.
11:36Got it. And how is the medical tourism vertical going? Sorry, I'm coming probably back to where
11:42we started. But how is that one going? So how does that start contributing both to top line?
11:50Are you doing it standalone by yourselves? Are you all doing it in partnership with someone?
11:55And what are the target geographies that you have?
11:58So medical tourism is actually a very, there are a lot of nuances around it. It's a beautiful
12:05industry, rapidly growing. India is becoming a hot destination for medical tourism,
12:09and which is why we have forayed into it along with PFLEDGE. PFLEDGE is one of the
12:14leading service providers for people in Middle East and CIS countries and help them to come to
12:20India for their medical needs. And we expect that this business is going to ramp up pretty rapidly.
12:26And we look forward to become part of it as a shareholder and as well as travel service
12:31providers to the people who are coming to India for medical tourism.
12:35Are you going to do it only through PFLEDGE? Is that how one looks at it, Mr. Pitti?
12:42For the countries which are in Middle East and CIS, yes, we will do it through PFLEDGE because
12:47they need to be the originator, the customers. And we don't know those customers. PFLEDGE,
12:54what it does is it provides home care to people in Middle East. Now, when they are providing home
12:59care to people in Middle East, they are already in touch with customers and hence they know people
13:02who need medical tourism to come to India to get their ailment right. And hence,
13:07they become the source of the origin of the customers who are coming to India and hence,
13:10we would work along with them. And do you all get a revenue share as part of this? Of course,
13:1430% is your ownership in that company, but do you all also get a revenue share out of this?
13:19Does it contribute to the top line? Absolutely.
13:22And what is that percentage, if at all? That is not something public. In future,
13:26we probably will disclose more. And outside of these geographies,
13:30would you also be exploring US? Absolutely. So, wherever there is medical tourism,
13:36we are looking for companies like PFLEDGE based out of those countries who can basically do
13:41origination for medical tourism to create demand for India. And have you all tied up with partners
13:47in India correspondingly because that's something you all will need? So, PFLEDGE already has multiple
13:53hospitals with whom they are working along with. Our responsibility will be to take care of the
13:57travel part. Understood, understood. That makes sense. Got it. And with regard to the 1000 crore
14:04fundraise, of course, you've also suggested 200 crore to be invested in your manufacturing
14:11facility. Just one quick clarification. So, where does that 1000 crore go or where does
14:17the balance 800 crore go? And is the capacity going to be at 4 to 5000 buses or 2 to 3000 buses?
14:24Annual capacity is going to be 2 to 3000 buses. And the fundraise, we have taken a board approval
14:30to raise up to 1000 crore rupees. We are speaking to a few investors to see if we can,
14:36if there is a demand. Right now, there is basically, we are behind the pace of understanding
14:41the demand. But the board approval is already there. And as and when any next steps happen,
14:47we will be informing you. Got it. Thank you so much, Prashant. It's been a pleasure chatting.
14:55Of course, lots happening with Ease My Trip. Wish you all the very best. And
15:00we'll chat with you very, very soon, of course, post the Q1 numbers,
15:04or Q2 numbers, I beg your pardon, to get better stock of what's happening. Thanks so much.