ixigo, an online travel aggregator platform (OTA) is set to increasingly focus on growth over enhancing contribution margin percentage, according to Aloke Bajpai, Managing Director and Group CEO, ixigo. The company plans to expand its geographical presence and focus on the underpenetrated markets for its bus segment to drive this growth.
In the first quarter of FY25, the bus segment contributed 12.6 per cent of the group’s gross transaction value (GTV), down from 13.8 per cent in Q1FY24, though the group contribution margin share of the business increased from 33.2 per cent to 33.9 per cent.
Currently, only 20 per cent of bus bookings are made online, indicating that a large majority (80 per cent) of bus bookings are still handled through offline methods. Given the substantial opportunity to attract first-time online bookers, particularly in the north and east where online bus booking penetration is lower compared with the south and west, it plans to expand its geographical presence.
“Buses will be one of our fastest-growing verticals in the coming years,” he told businessline, highlighting the significant potential in these underpenetrated markets.
The company’s passenger bus segment has recorded a growth of 16 per cent year-on-year (y-o-y) in the first quarter of 2024. “This quarter, we are expanding geographically using our distribution strength pan-India across the group and we have signed up more operators for our Abhi Assured programme,” he said in an investor-earnings conference call.
Additionally, Bajpai noted that the company is focusing on maintaining a balance between onboarding newer operators and service standards than increasing its fleet numbers. “We avoid onboarding operators who lack consistent schedules or who may be unreliable, often referred to as “fly-by-night” operators”, he explained.
ixigo acquired the bus ticketing and aggregation platform AbhiBus in 2021. Recently, Abhibus launched its edge app at the Prawaas 4.0 event, which aims to streamline communication by providing a single point of contact between customers and bus operators.
ixigo recorded a 78 per cent rise in its profit after tax (PAT) to ₹14.85 crore in the first quarter of FY25 compared with ₹8.36 crore in the year-ago quarter. The company also registered ₹1,000 crore of monthly gross transaction value (GTV) for the June quarter. The revenue from operations increased 16 per cent to ₹181.87 crore in Q1 FY25 from ₹156.55 crore in the corresponding quarter last year.