Ixigo's Q1 profit rises 81%, revenue grows 13% to ₹357 crore amid aviation and train challenges

Online travel platform ixigo reported its highest-ever quarterly profit in the June quarter, aided by strong growth across its bus, flight and hotel businesses, even as the company continued to invest heavily in hotels and artificial intelligence and navigated a challenging operating environment for trains and aviation.

Gross transaction value rose 19% year on year to ₹5,524.33 crore in the first quarter of FY27, while revenue from operations increased 13% to ₹356.75 crore. Contribution margin also grew 13% to ₹144.94 crore. EBITDA jumped 65% to ₹53.52 crore, while adjusted EBITDA stood at ₹29.24 crore. Profit before tax increased to ₹48.14 crore from ₹28.66 crore a year ago, and profit after tax surged 81% to an all time high of ₹34.24 crore. 

The strong financial performance came despite industry challenges that affected key travel segments. The company said it deliberately chose to reinvest operating leverage into building its hotel business, expanding AI capabilities and strengthening its brand rather than maximising short term profitability.

"This quarter, there were three primary areas of investment. The first is Hotels... Second is technology and AI... Then there are brand and marketing investments," CFO Saurabh Gupta said. He added that investments in hotels include customer acquisition, technology and supply capabilities, while AI spending is currently directed towards ixigo NEXT, the company's AI native platform. 

Co-founder Rajnish Kumar said the AI investments include engineering talent, infrastructure and training of the company's own small language models, with costs expected to normalise over the next few quarters as efficiencies begin to emerge.

"The costs of these AI initiatives naturally show up before the productivity benefits do, and I expect that we will see tech costs normalize within the next few quarters," he said. 

Founder and group CEO Aloke Bajpai said the company was consciously prioritising long term market leadership over short term margin expansion.

"Our view is that we are still in a phase where the returns on incremental investment are exceptionally attractive. It is slightly premature for us to optimize only for profitability, since we need to establish our market share in categories such as hotels," he said. 

Hotels emerge as the next growth engine

Hotels remained ixigo's fastest growing business for the second consecutive quarter, with the company putting half a million guests across its hotel network during the quarter. It now has direct partnerships with more than 10,000 hotels across nearly 700 towns and is adding several thousand properties every quarter through its AI powered hotel platform, HELLO. 

The acquisition of a 54.66% stake in Brevistay is expected to accelerate this strategy by strengthening hotel supply and flexible stay offerings. However, the aggressive push came at a cost. The contribution margin of the "Other" business, which includes hotels, slipped to a loss of ₹3.06 crore from a profit of ₹1.86 crore a year earlier as the company stepped up investments in the category. The financial impact of the acquisition will begin reflecting from the second quarter. 

Bajpai said the company aims to become the largest player in India's budget hotel segment over the next four to five years. 

While hotels gathered momentum, trains continued to face policy related headwinds. The company said changes to Tatkal access for online travel agencies, lower waitlist inventory and additional authentication requirements have constrained growth across the category. Even so, ixigo increased its share of the OTA train market from around 62% to 63% during the quarter while focusing on preserving margins. 

The aviation business also operated in a difficult environment following the Iran conflict, which pushed up oil prices and airfares. Domestic average transaction values increased 22% year on year, while international average transaction values rose 38%. Passenger growth remained muted and airline capacity cuts by Air India and IndiGo are expected to keep conditions volatile in the near term. Despite this, ixigo reported 27% GTV growth in its flights business and said it continued to gain market share. 

Meanwhile, buses continued to be the company's strongest performing vertical, supported by higher demand, expanding highway infrastructure, new product launches and wider geographic reach, giving ixigo confidence that it can continue growing faster than the broader market.