Buy RateGain Travel Technologies; target of Rs 1150: ICICI Securities

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Organic growth was 14% YoY in Q2 and 15.7% in H1, above the 12–15% guided range, driven by Properties and Destinations growth.
  • Sojern's corporate business is a weak spot, but management is taking steps to reset the business, including new leadership and a signed TikTok agreement.
  • Distribution was stable YoY and is guided to single-digit growth in FY27, with a 'hockey stick' ramp expected in Smart Distribution.
  • H1 adj. EBITDA margin of 23.7% is above the band, driven by Sojern–Adara single-platform savings, shared services, and AI productivity.

Thesis Validation Checklist

  • Watch for a sequential DMO rebound through Q3–Q4, driven by new budget cycles and the corporate business moving from decline to flat.
  • Monitor the growth of AirGain, DaaS, and Smart Distribution, as well as the company's ability to maintain its EBITDA margin above 20%.
  • Keep an eye on the debt repayment progress, with a goal of being net debt-free by FY28E.
  • Track the recovery in the Middle East revenue and the growth of new contract wins and the total order pipeline.