Le Travenues Technology Limited (NSE: IXIGO) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Aloke Bajpai — Chairman, Managing Director & Group Chief Executive Officer
Rajnish Kumar — Director & Group Co-Chief Executive Officer
Saurabh Devendra Singh — Group Chief Financial Officer
Analysts:
Rohit Thorat — Analyst
Swapnil Potdukhe — JM Financial
Anmol Garg — Analyst
Gaurav Rateria — Analyst
Saksham Savernya — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Ishigo Q3FY25 earnings conference call hosted by Access Capital Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Thorad from Access Capital Limited. Thank you. And over to you.
Rohit Thorat — Analyst
Thank you, Steve. Good evening everyone. On behalf of Access Capital, I welcome you all to ixigo’s Q3FY25 earnings call. We have with us Mr. Alok Bajpayee, Chairman Managing Director and Group CEO, Mr. Rajneesh Kumar, Director and Group Co CEO and Mr. Sourabh Devendra Singh Group CFO. Before I hand over to Alok, I would like to highlight that the safe harbor statement on the second slide of the earnings presentation is assumed to be read and understood. Over to you, Anok.
Aloke Bajpai — Chairman, Managing Director & Group Chief Executive Officer
Thank you Rohit. Good evening everyone and welcome to our Q3 FY25 earnings call. We are very happy to report a super strong quarter in Q3 on the back of acceleration in our flights and buses business and a gain in market share in every line of business adding more fuel to our outperformance. The market was also stimulated by the rise of spiritual tourism, a stronger wedding season and addition of some capacity. Though I will still give most of the credit for this growth to the superb execution by our team. We have broken all records on almost all fronts this quarter with overall gross transaction value or GDV crossing rupees 4036.3 crores this quarter. A 48% increase YoY and our overall revenue from operations reaching 241.8 crores, a 42% increase YoY for Q3 and a sequential increase of 17% compared to Q2. Our flights and buses business have been the heroes of this growth. With flights GTV growing at over 73% yoy for Q3 and buses GTV growing at over 63% y o y leading to market share gains. In fact, despite the change in advance reservation period from 120 days to 60 days by Indian Railways which had a onetime negative impact on our train segment last quarter. Train GTV has still grown at 27% YoY in Q3 and train revenue from operations has grown by 26%. Y O Y I’m glad to also share that. We have gained market share within the rail segment among With our estimated share now standing at about 58% as of end of December 2024 as against 52.4% in H1 of FY24 and 42% at the end of FY21, implying steady gains in market share year over year. We’ve also achieved our highest ever EBITDA and profit before taxes in Q3. In fact, our nine months YTD EBITDA has has doubled from rupees 34.3 crores to rupees 68.2 crores for nine months ending December 24, maintaining a double digit EBITDA margin. Saurabh will later elaborate further on our financial performance, but let me talk about the business growth. You may be wondering what has given ICSIGO the ability to grow this fast in the OTA market. Let me remind you that Exigo’s strategy is unique in the online travel space since we started by building a large user base for utility among the next billion users at a time when no one was paying attention to it and we were empathetically solving problems that the next billion users faced. Then we became transactional more recently and started selling tickets, ancillaries and value added services to those travelers. We also started cross marketing and selling other services to those travelers with multimodality of options across rail, bus and flights, thereby deepening our relationship with our customers. This is how the ixigo Group has not only maintained the number one position in India when it comes to user base, usage, penetration and app downloads in the OTA space, but also outpaced all major online travel players in India on growth in both users and gtv, a fact that has been reiterated in some recent investment banking research reports. Our own data shows that we cross 86 million monthly active users across Exigo Confirm Ticket and Abibas and 31 million passenger segments were booked in Q3. We got over 30 million app downloads last quarter with a growing proportion of our users starting to book flights, buses, trains and even hotels with us. In terms of flight transactions and revenue we are the youngest flight OTA and therefore we are growing from a lower market share than the incumbent. But given how fast we have grown in the last three quarters, we are now placed in the top four flight OTAs in India basis are GTV and passenger segments. If we talk about buses, the overall market penetration is still pretty low at around 20%. So it is pertinent that we continue to double down on growth and despite already being the second largest player, we have continued to make steady gains in market share by growing faster than peers by bringing a large number of first time bus bookers online. We’ve also expanded our bus supply with four state road transport corporations or SRTCs and 200 plus private bus operators being added on Abhibas in Q3. And the number of our Abhi assured operators has also gone 3x compared to what it was last year. As for hotels, we are only getting started. We also anticipate our growth there to accelerate with ongoing product enhancement, supply expansion and organic growth initiatives As we mentioned in our previous calls, we have deliberately swung the pendulum towards growth and acceleration in the last couple of quarters, even at the cost of losing a few points on the CM percentage and yet we have managed to maintain double digit EBITDA margin in the business. If you see our track record, most of the growth for Ixigo Confirmed Ticket and Abibas pre pandemic had been organic and when we compared our marketing investments to what many OTAs have spent historically, we realized that there was room for accelerating the organic growth base further without losing out materially on CM growth in absolute terms. It is in this period that we have upped our marketing spends a bit on flights and buses and onboarded Rohit Sharma as our new brand Ambassador for Exigo Trains to launch digital and offline brand awareness initiatives to further build trust and improve penetration of our brands. We’ve also been able to consistently add value added services that have helped us monetize our transacting users better to further enhance revenue. The most recent one being Travel Guarantee where the initial response and uptake by users has been positive since it gives them up to 3x refund to take a flight, bus or alternate train in case their waitlisted tickets do not confirm Solving a real life problem faced by hundreds of thousands of travelers every single day. Even as of January. As we speak, we are continuing to see strong momentum thanks to the Mahakum, the largest congregation of humanity on the planet. Just to share a few statistics with you, our overall passenger segments for Prayagraj in the first 24 days of January alone have grown 4.62 times compared to the same period last year. And within that though, metros are playing a huge role as origin city. Origin towns such as Nagpur, Jaipur, Lucknow, Gorakhpur and Varanasi are also playing a pivotal role. Our flight and bus searches have grown nearly 14 times for travel to Prayagraj and train searches nearly 10 times, reflecting exceptionally when we look at the kind of demographic that’s traveling, the surprising fact we are noticing is that more people in the 20 to 25 age group are going to the Mahakum than in the 46 and above age group, implying that spiritual travel is not just a phenomenon for the older population, but increasingly being embraced by the youth of our country. This is also reflected in solo travelers being the dominant demographic on the train side, making up over half of train bookings to Prayagraj. Having said that, Prayagraj is also my place of birth, so I’ll also be visiting the Mahakund shortly. Even though I’M neither in the 2025 nor the 46 and above demograph myself. If any of you are planning as well, I highly recommend the Mahakun microsite we launched earlier this month, which over the lakh families have already used to plan their journey in Grabbad. We have all the info at one place Ghats, temples, tents, cottages, places to visit, things to do, food recommendations and more. In fact, spiritual tourism as an overall vector for growth has shown remarkable potential for us with many destinations such as Varasi, Gaya, Serji, Puri, Dwaran Recently seeing 100 to 150% growth in train bookings. If one compares year over year with that, I’ll hand it over to Rajneesh to talk more about growth and products.
Rajnish Kumar — Director & Group Co-Chief Executive Officer
Thanks Anuk. Thanks Alok. As Alok was talking about the growth numbers that various lines of businesses have been achieving, let me start by talking about what growth means to us and the quality of growth we intend to achieve for us. Sustainable growth has always been more important than just chasing growth at all costs. Sustainable growth comes from having a good product, providing a great customer experience to our users, and acquiring users at unit economics that are positive over the long term. Once retention and repeat behavior of our customers come in over and above the rapid organic growth, incremental spends on marketing delivers, acceleration as well as better return on capital. As we have seen over the last few quarters, value added services constitute an important part of our business with our attached rate for all value added services at 29.85% last quarter. On that front, we also launched Travel Guarantee last quarter. When people are booking a waitlisted train ticket with a high probability of confirmation and yet do not get a confirmed seat, it is the worst situation to be in as a traveler given one would have typically not made any alternate arrangements. Last minute fares for flights and buses can be quite high on popular routes and even tatkal train fares are typically higher than the regular fares. So when a traveler opts for a travel guarantee ticket, we are not necessarily guaranteeing a confirmed seat on that train itself, but what we are guaranteeing is that if your ticket doesn’t get confirmed, we’ll give you enough money so 3x of fare if you’re booking a flight or bus and 2x of the fare if you’re booking another train to make an alternate arrangement for yourself within the next seven days. Since we have a lot of data on how waitlisted tickets move and get conformed to various trains, we have a reasonable ability to control which tickets we show this option on and how to price it using our proprietary data science and AI models. On our bus business, we have revamped our operator facing interface called Edge and we have launched mobile version of the app for Edge for operators as well to track their performance, understanding their operations and engage with their users. The team has also significantly improved our consumer apps performance and user experience as well as integrated our AI Chatbot Tara on the app as a result of which the Abivas app rating on Android is now 4.8 plus, reflecting a strong improvement in overall NPS for the group, Tara is now handling 1.59 million customer queries per quarter, end to end without any human intervention across the This is almost like 92% of all our customers are post reach outs over chat. Let’s move to the food delivery on trains business. Last quarter we integrated zoop, our latest acquisition across icsigo and confirmed ticket apps enabling our rail users to order food and get it delivered to their boiler seat and we have seen decent growth in food orders. We’re expanding the number of stations of our delivery staff as well as signing up restaurants and chains at most stations. We’re also learning ordering patterns to anticipate demand better and to identify what kind of supply expansion we need to enable more conversions. And most importantly, we are doing this while still maintaining profitability there. Let’s talk a bit about hotels as well, where we are still in the early phase of product market fit and supply build out as we discover pain areas. At Hodel Bookers we are figuring out ways to solve them through better hurdle ranking, NPS measurement and data science in order to surface the right quality of supply to the users quarter. In order growth we are seeing there is a double digit percentage and for now we are only driving growth organically from our own existing user base across flights, trains, buses, etc. Our diversification narrative has become more compelling last quarter if you examine the contribution margin with all three lines of businesses contributing more evenly in the mix, trains constitutes 39%, buses constitutes 33 and flights 27% of the overall contribution margin mix, making ICSIGO a very well diversified ota. I would also like to talk about our technology and AI initiatives across the group. Recent developments in AI, including new Deep SEQ models from China, have shown to the world that more powerful AI models will be available at a fraction of the current cost in the future. For travel companies, this suggests that the race isn’t just about having AI capabilities, but about identifying customer pain areas and solving them with AI capabilities, creating user interfaces that make those capabilities indispensable to the users and to be able to distribute them at scale. At Excel, there’s a transformation going on in how we use custom built AI tools instead of manual operations for many of our day to day workflows. Our vision is to have more AI agents deployed across the organization that help increase observability and makes various operational tasks more automated and efficient. Also, in some areas this requires re engineering of our existing stacks and hence some of these one time investments will show up in operating leverage only over time, while others which are ongoing months will lead to incremental NPS gains or conversion rate improvements for our existing lines of businesses and value added services an interesting observation to end this is that we’ve had in the NGO market which is dominated by tier 2, 3 and 4 travelers, which forms the core of our business. We have also started to see material flight growth starting to come from tier one towns, Tier one to tier one flight passenger segment Segments for us have grown with a similar momentum as our NBU flights bookings over 68% year on year Q3 and we have seen our international flight segments growing at 61% year on year in Q3. With the deepening partnerships with international carriers, we expect improved supply and content even further on international flights in order to serve our Tier one users better. Handing it over to Sourav now to talk about our financial highlights.
Saurabh Devendra Singh — Group Chief Financial Officer
Good morning, afternoon, evening everyone. I truly appreciate your presence today and I extend a special thanks to those joining from time zones where it’s still or already night now, as we come together to reflect on the third quarter of FY25, it’s tempting to get lost in the maze of numbers and percentage, yet we must pause and appreciate the broader journey we are on, a journey defined by empathy, resilience, innovation and a shared vision. This quarter represents both a milestone and a stepping stone in our ongoing journey. It’s a testament to our collective efforts and an indicator of the path yet to be explored. We faced challenges, celebrated triumphs and embraced changes, all the while staying true to our core values. Now, each figure we discuss today is more than just a statistic. It’s a snapshot of our dedication and transformative impact we are making in the lives of our customers and also within our industry. Now for clarity and efficiency, I will use Rupees crore as a unit of reporting unless NEJ said otherwise. Regarding the mention of periods and year over year yoy changes, I’ll be referencing to the year’s shift from Q3FY24 to Q3FY25. Again, unless otherwise specified, at the heart of our journey lies Gross transaction value or gtv, a powerful barometer on how well our offerings resonate with those whom we serve. For a company at our unique stage of evolution, experiencing healthy growth in this metric isn’t just beneficial, it’s vital to our forward momentum. Year over year our GTV has increased by 48% to 4,036.3 crore. Gross ticketing revenue has also expanded in parallel by 49% to 301.3 with a stable cross take rate at 7.47. The average transaction value, which I will define here as ATB per segment is another essential matrix. I see that as an indicator of our share of the customer wallet, ATB improved nearly 15% to rupees12.82 from rupees 1115 year over year Revenue from operations, which is gross revenue after removing the discount and including other operating income, rose by 42% to 241.8 up from 170.5 at the group level. Our contribution margin defined as revenue from operations less direct cost grew to 102.5 up from 77.5, an increase of 32%. However, the contribution margin percentage slightly decreased this quarter from 45% to 42% due to our investment in accelerating growth, something which Rajneesh talked about in detail. Our adjusted EBITDA excluding other income and ESOP expenses increased to 24.3 up from 19.5. Our profit after tax for this period reached 15.5 compared to 30.6 in the prior fiscal year and includes one of an event which I will elaborate on shortly. Let’s go to our three core lines of business and they performed as planned or dare I say even better Train we asserted our dominance again this quarter in Q3FY25 we booked 2.4 crore segments marking a 21% YUI increase generating a GPV of 1828 up by around 20.27%. Revenue from operation reached 119.7 with a contribution margin of 39.9 at a contribution margin percentage of 33%. Now this accounted for 39% of our contribution margin. Our PaaS business continues its encouraging growth churn in Q3FR25. It it booked 0.5 crore passenger segments produced a GTV of 494.6. This translates to a 64% growth in segment and a 63% higher GTV compared to Q3FY24. The contribution margin surged by 48% YoY to 34.3% to 34.3% at a contribution margin percentage of 66% a slight fall from 68% last year as we mentioned and guided to enhancing the bus line share of group GTV to 12% and increasing its share in overall contribution margin to 33%. In flights we invested in growth this quarter we booked 0.24 crore segments at a GTV of 1,682.6 reflecting a 73% yy. The contribution margin for flight grew by 42% to 27.3% at a contribution margin percentage of 40% with flights now contributing 42% to the group GTV And 27% to the group contribution margin. This number has also increased from 24.81% of the group contribution margin last year. Finally, as promised, I want to discuss some unique factors impacting this quarter. Our share of loss from our Associate Freshbas was 1.9 crore compared to a loss of 2.1 crore in Q3FY24. Tax expenses shifted from a credit of 16.7 crore last year to an expense of 5.9 crore this year, largely due to deferred tax credit reversal. Now, while we have achieved significant milestones, as Alok and Rajneesh highlighted in the call today, our journey is just beginning. To quote one of my favorite Urdu poets, Mizra Atabollah Khangale Hazaroo Khaishayathi, over the past year we have fulfilled a number of our dreams. But many, many, many more are yet to be fulfilled. With that, I’ll hand it back to the moderator for Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use answer while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sopnil from JN Financial. Please go ahead.
Swapnil Potdukhe
Hi, thanks for the opportunity and congratulations on a very good set of numbers. My first question would be on your flight side. I would like to know what percentage of your flight bookings are happening through NVIV apps. Right. Earlier that number to be 1/3, close to 1/3. Has there been any meaningful change over there?
Aloke Bajpai
Yeah. Hi Swapnil, this is Alok here. Good to hear from you. So on the percentage contribution from NBU side, I think at the time of the IPO, you know, we had mentioned that it was about 30%. 30, 31%. Right. And I think you, you know, we just tried to maintain it that way. But what has happened, like Rajneesh pointed out, is that in the recent couple of quarters we’ve started to see tier one also starting to contribute. Right. And as our flight funnel has expanded, especially due to the product led growth that Rajneesh was talking about, features like Like Flight Tracker Pro or Pricelog or Assured they’re driving significant word of mouth in people from Bangalore, Delhi, Bombay, etc. The big cities. And we’ve started to see meaningful growth come from that. I think that mix from here on the flight side, how it evolves will be a function of how our Tier 1 penetration goes. So on the Tier 2, 3 side, I think pretty much you can assume that it will grow in line with our MAU growth. But on the Tier 1 side, you know, it’s a function of the product, it’s a function of the brand awareness initiatives that we might choose to do. Right. And you know, that may skew it a little bit towards tier one as we scale further.
Swapnil Potdukhe
Understood. The second question is a bit broad based and I might be jumping the gun and I’m here, I’m assuming 4Q will be decently good quarter in line with our 2Q 3Q numbers because of Kum and the continued festivities there. But if I were to look at from a slightly medium term perspective, FY26, let’s say, given that our base for all the three segments will be very strong, how do you see your numbers panning out next year? Next fiscal year? I mean, yes, you would have this benefit of more, you know, customers coming from tier one cities, but still the base would look very, very high to sustain momentum.
Aloke Bajpai
Yeah, great question. I think, look, if you had asked this question one year back and you know, I don’t think I would have told you that we would grow flight GDV at 70% plus. So I think we’ve managed to surprise ourselves and I think I give a lot of credit on that to the hard work of the team, the product, the tech behind the scenes, which I mean small things like how fast our search results load or how fast, you know, your booking confirmation comes, or the fact that your boarding pass comes seamlessly, you know, on WhatsApp and you get checked in automatically and bunch of things that we’ve done there, you know, which are pretty much industry first. Right. I think, you know, I think, I think the impact of those is harder to sort of preempt and talk about because you know, we invest in these initiatives not with some kind of explicit growth assumption around them, but essentially implicitly assuming that it will improve the experience and therefore the NPS and the rating and therefore will accelerate the organic growth. So you can assume that we continue doubling down on such product initiatives and I’ll let Niche talk more about this, but the base, if That you’re talking about. Right. I think if you zoom out and see today, our market share is still, you know, you know, we are the fourth largest OTA from GTV or passenger segment perspective. So I think our market share is still not that big compared to some of the incumbents and on the flight side. So I think there is still scope to continue accelerating this growth. Given that, when you compare our Maus with any other OTAs. Right. We are the number one on Mausoleum, but not yet, let’s say in the top three. On the flight side, can we get there faster? I think we can because we have the kind of. We have the kind of growth in terms of quality of growth. Right. Which allows us to also sell flights, also sell hotels and other meaningful products, and not just trains and buses. Right. So, Rajneesh, if you want to add anything to that.
Rajnish Kumar
Yeah. I mean, I’ll just reiterate the fact that, you know, for us, you know, we’ve always thought about growth as something which should be sustainable. And we’ve never chased growth at any cost. Otherwise, you know, we would have always done this process of raising a lot of capital, spending that on building a brand too early. But what happens is that when you reach that natural progression of a point when your product maturity level has reached a certain tipping point, that is when customer stickiness and word of mouth starts to have that multiplier effect. And then when the bang for the buck that you get for every dollar that you spend, the marketing is significantly higher. And that’s where we feel that we have kind of hit that sweet spot now. And which is why we are seeing this growth happening. I mean, obviously, you know, you’ve seen that our growth has been there even on a segment like trains where we already enjoyed decent market share. Right. We’ve still grown there, but on segments like buses, you can see that the penetration is still 20%. So there is still a lot of room for everybody to grow. And if you have a product which is rated 4.8 and which solves customer pain areas, I don’t think you need to spend a lot of money to grow there. Flight side is still too early because we are very small when it comes to market share. So there, I would say we still have headroom for growth. And I think, like I said, we won’t spend money to grow there by spending money on marketing, but we’d rather spend money on technology, product, and AI to create a customer experience which should then fuel and enhance and have a multiplier effect on our marketing spend.
Aloke Bajpai
Just At a risk of sounding repetitive, I would say something I said in the previous quarters. What makes our moat slightly different from most of the other people is a We are multimodal b There is a product superiority c We have an ability to get a product out at a much better economic just because of our frugal DNA. So all of it combined, I think it’s a Going forward, you talk about a year. I think even three years from now, we’ll still be scratching the surface of what we can be
Swapnil Potdukhe
Understood. So just a related question to that. You touched upon some investments towards technology and I can clearly see that your technology costs have grown more than 50% this year on year, if you look at that way. And then. So can I just call out any specific investments that you are making on that side? I mean, I understand AI chatbots and those things are definitely one of them. But in particular, any cloud related investments or any other to better help us understand the investments you’re making on technology.
Aloke Bajpai
Yeah, sure. I mean like see some of these investments in technology and AI initiatives, it’s hard to figure out what kind of impact it will create in the future. Because if you think about what’s happening today in terms of technology, this world is sitting at an inflection point. And I think with all these advancements that are happening, if you do not invest in this technology, if you do not protect yourself from that disruption, I think the risks are much higher than that. So these investments that we are making in AI and technology, I think these would probably have a much, much bigger upside in the future than you see right now. And we talked about these things like our vision is to create internally we have AI efficiency as a focus area where we are creating the vision of having agents across the organization that help increase observability and efficiency across all the operational tasks that people are performing and make them automated and efficient. I mean, obviously all these things will require us to completely re architect the way we have been conducting business and operations in the past and do that on the back of this new tech that has come. Right. So this investment is what will show up obviously as a cost item. And obviously there’s investment that is happening on a new vertical which is still in build out phase, which is hotels. So I would still guide for this investment to be there for the next few quarters. And it might take a few percentage points away from, you know, the CM that we are generating. But I think this is for the greater benefit in the future.
Swapnil Potdukhe
Understood. Just a last question. So we had acquired Zoop, you know, last quarter you mentioned about that. So any first of all I would like to understand like how do we consolidate Zoop’s numbers? Do you consider any trend segment or you show it in others and any benefit that you would have got in this particular quarter.
Aloke Bajpai
So Swapnil, it comes in others at a point of time when it’s big enough, we’ll move it Out and it’s a different segment and we feel that it’s early days as of right now, what we are seeing in terms of the integration, the response initially has been very, very impressive. Even though remember when we see of it as a product, we are just about starting starting it. So the thing is not just having it in our funnel, the thing is about finding the user issues, solving those problems, trying to predict this better. So it’s still early stages but yes, it shows another.
Swapnil Potdukhe
Thanks a lot and all the best guys, very solid numbers. Hope you continue to do so.
Aloke Bajpai
Thanks a lot.
Operator
Thank you. The next question is from the line of Anmol Kara from DAM Capital. Please go ahead.
Anmol Garg
Yeah, hi, thanks for the opportunity. A couple of questions. Firstly, if I look at our monthly 9 monthly active users for 9 months, then that has not increased much. However, our monthly transacting users have increased very strongly. So what did you understand that going ahead would have marketing spends would be targeted more towards conversions or would we want to have more broad based marketing trends to increase the number of active users?
Aloke Bajpai
Hi Anmol, excellent question. I think, you know, if you think about our annual active users, right, you look at last year’s numbers, right, that was, you know, almost half of all the Internet population of India, which means almost one out of two people who are on the Internet use at least one of our services or one of our websites at least once. And so we are already at a point where like 80 plus million MAUs, I don’t know how many Internet properties would have that kind of scale. And we are not a horizontal property, we are a vertical property in that sense. And I think our focus as a team is because a lot of this is coming organically. So our focus as a team when we do marketing is not as much as driving MAU growth as the output metric, but really about seeing how we can drive up conversions, how we could look at app installs from the relevant user base. Those are the kind of things that we optimize our campaigns for. And I think broadly in the long term you want to acquire high quality users who come and do high frequency repeat purchases right with you. So in any of the verticals where we spend money on marketing, that’s the kind of approach that the team follows. And we are very pertinent about looking at CAC and LTV and making sure that more Most of the marketing acquisition we do right from the second transaction itself we are able to get back the kind of money that we are spending to acquire those users. So in that sense we will keep scaling those initiatives in line with where we see better bang for the buck when it comes to online spend, when it comes to offline spend, it’s very discretionary. So there could be some, you know, kind of quarters where we choose to spend more or when we, let’s say last quarter when we took on board Rohit Sharma as a celebrity and we started doing some 360 degree campaign in certain regions. Right. I think again there could be some offline, some online in that mix but the objective there is to stay within the guardrail and maybe Saurabh, you want to talk about what kind of guardrails we maintain.
Saurabh Devendra Singh
Hi. Hi. I just want to say that is that we are extremely prudent in our approach and usually when we see customer inducement costs so this is not a guidance, this is how we think of it internally we would look at it as wanting it to be around 3.5% which is a combination of discount plus branding plus performance and what we are also doing, what we would also do is that we would have metrics to check the return on each kind of investment and remain around that. So we would be cautious on that too.
Anmol Garg
Understood. So if I have to think more from a broader perspective, should we assume that our ad spends which are currently at around 8 and half percent of revenues would increase and we’ll get maybe leverage benefits from employer, maybe other expenses.
Saurabh Devendra Singh
So anmol, how you should look at this, how we look at it internally and when I look at it so when I’m talking about a combination. So every line of business has a flexibility on which of the three customer inducement he wants to spend on or also at times one becomes costlier than the other. So we play around, we are strategically looking at it. But how I would look at it if I was you was taking it as a percentage of GPV and saying that broadly the combination of three should be around 3.5%. Again I’m saying that this is not a guidance, this is how we think and there might be opportunities where we might go one way or the other. But broadly this is the number unless we find something extraordinary either way where we would want to be
Anmol Garg
Understood. Understood. Secondly, wanted to understand our overall strategy on the bus business. So while we have done excellent growth in this This quarter just wanted to understand that how should we, how are you looking this business in terms of our market share expansion, particularly in the northern and western part of western part of the India and how do you see, I mean what I wanted to understand is that in this particular business, should we expect higher ad spends going ahead or what is the other strategy that you are building up?
Aloke Bajpai
Yeah, so I think, look, just zooming out again, right? Like if you look at online penetration in this space, it’s somewhere between 20, 22% as we speak. Right. And I think the big opportunity we see on buses is how can we bring those people online to book buses who are today not booking them online at all. Right. That’s the largest opportunity because that’s let’s say close to 80% of the market. Right. And then step two is, you know, those people who may not be using us if they’re online, can we make them aware that, you know, we are a great product for, I mean the highest NPS product, no doubt, 4.8 app rating with that scale of reviews and downloads is very, very hard to do if you ask any practitioner in our space. But essentially to do that A, we have to have obviously selection which means we need to have all the operators that matter. And let me assure you that, you know, on that we would compare with anyone out there in terms of the kind of supply that we’ve built and we keep expanding that. I just mentioned that last quarter we’ve added 200 more private operators and a bunch of more SRTCs. So our objective is to have all the supply that is possible to have in terms of bringing them online. But we have again a guardrail around quality. So what we don’t want is to bring on an operator who’s not able to service our customer with the kind of expectation of customer service and quality of bus etc that we desire. Right. So we will be very prudent about not bringing on operators who will reduce our NPS and making sure that we onboard operators who are likely to bring on better quality assets, etc. Now two things are driving the growth there. One is there’s a proliferation of new age bus operators out there, multiple of them and we could name a few. But freshbus, which is doing EV buses, which we also have a minority investment in players like Zingbus or Intercity, all these players obviously are growing and expanding and some of them have raised more capital. So I think in that sense. And then flixbus entered the market. So in that sense supply expansion is happening. And similarly SRTCs are also upgrading the quality of their assets And bringing on new assets. At least three SRTCs in South have started adding electric vehicles as well. So you know, all that is helping with this growth. Last but not the least spiritual tourism which I mentioned earlier on that I just wanted to share that the sat on buses was most staggering. Prayagraj, which again is in the north. Right. I mean we saw an almost 14 times increase in bus booking yoyo, you know, towards Prayagraj thanks to the Mahakum. Right. But those kind of spurts we are able to do also because look, a lot of the people go to check for a flight and then the fare is too expensive and then they go for a train and the train is, you know, you don’t get a confirmed seat, you have a wait listed seat. So then bus becomes the only viable option for, you know, hundreds of thousands of Indians every single day. And tapping into that demand is easier for a player like Icsigo to do. And that is why you see us growing faster than the overall market, you know, probably growing twice the velocity of the incumbent here.
Saurabh Devendra Singh
What also many people don’t understand and which is where the uniqueness and I think what Alok had mentioned in his speech about the searches becomes very important because what happens is there are a lot of people who don’t realize how good buses have become now as compared to say 10 years earlier. So what say products like TG do for us is they allow people to experience buses if they don’t get a particular mode of transport. So what you have is you can, we are exposing people to newer ways. And the other thing is, as Alok mentioned, you’re talking about north, you’re talking about a route and not doing well and that helping buses.
Aloke Bajpai
Yeah. And Rajneesh, maybe you want to add something there.
Rajnish Kumar
I mean I think there are two things here. One is like obviously like we said, there is a lot of room for everybody to grow, right? 20% penetration, etc. But the other thing is that most of the growth that we expect should come mostly from investment in product and solving customer pain areas. I think you would have seen, you know, we announced recently, I mean in this call itself I mentioned about 4.8 plus rating on the NPS side. It’s not so easy to achieve a rating of 4.8 on Android as a travel app with that scale of users, et cetera. And this is a testament of how good the customer experience has to be to reach that kind of NPS levels. And I think this is where the word of mouth growth, that kind of aids organic growth. And kind of accelerates your spreads on marketing as well. Happens. And I think this is the most sustainable way of growing. Obviously, you need to make sure that you have the right kind of product supplies and relationships at the back end, which our team is working on. And we are making sure that we have the right kind of Suppliers. But I think just to underline this one key point, which is that we will continue to keep customer experience at the center of everything and we keep solving core customer pain areas, and that would be probably the key thing which will drive growth for us in across all segments.
Anmol Garg
Understood. Thanks for answering my question and congratulations for a very, very good set of numbers.
Aloke Bajpai
Thanks a lot, Anmos.
Operator
Thank you. The next question is from the line of Gaurav Ateria from Morgan Stanley. Please go ahead.
Gaurav Rateria
Hi. Thanks for taking me and congratulations on superb execution. I have three questions. First, if you could lay down, you know, what’s happening on the competition side in the flight ticketing business in terms of competition from airlines, Competition from other OTAs. Who’s losing share? Who’s gaining share? Just the landscape part of it. The second question is if you could help us understand your strategy around hotel business, how you’re gonna build that business. And lastly, you did touch upon the technology investments, especially in AI. If you could peel off some of the layers of what these investments are looking like and you know, what it will mean or how will it manifest in the form of product enhancements, etc. Will it be more like an incremental change? Will it be more like a dramatic change on product so that those color will be very helpful? Thank you.
Aloke Bajpai
Yeah. Hi. Hi, Gaurav, good to see you on the call. Alok here. Just on the first question, which was around flights, look, we have a very different philosophy with respect to how we look at competition because I don’t think we’re tracking like who’s gaining share, who’s losing share. I think we’re just trying to do a decent job at getting the product experience right and trying to expose flights as an option to millions of users out there who still don’t look at that option. I mean, 4% of Indians fly, right? And, you know, I think if that number has to move up, it has to come from people who today are taking a train or a bus instead. And, you know, just on that singular insight, we still have a lot of work to do as a company. I mean, the blessing we do have is that we have a lot more users than any other company in this space. Right? So if there’s a company which has a right to grow faster, it has to be us because we are sitting on that large user base that may still not be flying yet. Right. And of course, even in tier one towns, there’s some spillover growth coming, largely. Not that we are doing anything beyond building a great product. Right. Like in that sense You know, none of our marketing initiatives are, you know, particularly targeting tier one towns, etc. But we are seeing, you know, I keep meeting people at industry events who are using us because they love the product. Right? So in that sense, we are seeing people, you know, move to us just because of certain things on the product that they love or certain things on our customer service that they love. I mean, look, our refund times, we believe, are one of the best. We don’t know what the others actually have because nobody discloses that. But if you look at our average refund time of just over three hours, that’s one of the big pains. We keep hearing time and again from people and then we keep hearing that it’s hard to get through to call centers for OTAs. And again, we decided to publish what percentage of calls we pick up within two minutes. And in that sense, again, we are disclosing that every quarter and that numbers keep moving up. Right. So I think the last we disclosed is around 94%, which is up from 92%. So I think these are the things we worry more about. I think if we keep executing well, hopefully we do keep gaining share on flight side on hotels. You know, like Rajneesh and I mentioned, I think it’s very early days. Right. So I wish I could talk a lot about it, but honestly, like, we’re in the product market fit discovery phase and getting the supply right, getting a lot of the content right, understanding how the ranking works. It’s a complex space, right. It’s not as simple as transportation. So we know it’s going to be a long journey. I mean, trains took us 10 years to crack. Right. I don’t think we’re going to crack hotels in a year. Right. So in that we are seeing month on month growth, we are seeing quarter on quarter growth there, but also a much smaller base, obviously. But it’s going to take a few quarters to start talking more about this. And the last question, I will defer to Rajneesh on the tech and AI piece.
Rajnish Kumar
Yeah. I mean, just to, you know, close out the hotel’s question, like, you know, we mentioned that, you know, we will solve it in the exact same way like we solve the other problems of train travelers and flight travelers and bus travelers. So which is by understanding their pain areas and creating a product which solves those pain areas. So we’re still in that product market fit phase, build out phase, where we’re building the right product, right supplies, et cetera. The advantage we have, and that’s the only thing I wanted to highlight here before I move to the next question, is that we have back Passive distribution. And I think this is one of the advantages of introducing a product that is out there for users who can just need to be introduced to these products, like entering into a mall and discovering a new section. So coming to AI, I mean it’s very hard to predict what’s going to happen because if you can see every week things are changing and what was making sense in the previous month is not making sense right now. But if you look at some of the current developments around OpenAI’s, operator or deep Seq, et cetera, you’ll see that it’s like a full circle moment. For those of us who’ve seen the travel tech space for a while, we had demonstrated Tara at FocusRide in 2017 that we envisioned a future where voice interfaces would seemingly connect with AI seamlessly and create a customer interface which would remove all the clutter of travel complexity. Right now Operator is doing the same thing with a different approach that you would have seen. They are kind of working with e commerce companies to kind of create a place where people can book their travel seamlessly. And obviously this is kind of a classic innovators dilemma for OTAs to whether they should move on this platform and create new intermediary or create, you know, all the risk of missing out, etc. But ultimately, if you look at whether it is ChatGPT or Deep seq, et cetera, like all these guys, the underlying AI capabilities for most of them were very similar. There were a lot of companies out there who had similar capabilities. But the reason why ChatGPT became big is because they figured out user interface lock in much earlier. They were more customer centric in their approach and so they were the first ones to launch an app for an AI driven technology. And so they created massive distribution with a product which was not too superior compared to some of the other products out there. Now what this suggests is that just the technical capability is not enough to create market dominance by creating distribution. What you need to have is the ability to understand customer pain areas and problems and create interfaces and create interface lock in which makes those capabilities indispensable for users. And that’s how you create massive distribution and moat in the process, not by having a technology.
Gaurav Rateria
Right. Thank you very much.
Aloke Bajpai
Thanks.
Operator
Thank you. The next question is from the line of Shaksham from. Please go ahead.
Saksham Savernya
Yeah. Hi, good evening. Thanks for the opportunity. Congratulations on good set of numbers. My first question is just a follow up on one of the initial questions. So within flights the growth has come in the quarter from T over newsers as well, where some of the drivers has been growth from international markets. So maybe can you give some more colors on some of the initiatives that the company is doing within this space to expand international and And do we see this growth being sustainable coming from tier one space as well as well as international market? The second question is around, you know, we keep talking about exigos having the highest user base in terms of targeting the next billion users and expecting the next billion users to incrementally increase travel spend and the company benefiting from there. Sort of. What are some of the key challenges that the company sees in this space? Maybe is it a case of, let’s say in the longer term perspective, if you zoom out some of the competition also targeting the same space. So what are the some initiative, strategic thoughts that the company is doing to maybe keep those customers some color on that would be really helpful.
Aloke Bajpai
Sure. Saksham, the first question which was around international flights and the ability to sort of grow in tier one markets, if I read the question correctly, I think on that, like if you just look at, you know, like if you rewind a few years, right. Like we started first as a train utility app and then became a train OTA and then flight ota we became much later, right? And just after Covid is when we actually got started on the flight OTA journey. So in that sense you can say that we are a four, four and a half year old kind of a flight ota. Right? And in that obviously domestic was the early focus and but international, where you need GDS integrations and multiple international airlines to, you know, sign up commercially with you. It’s something that we’ve been obviously doubling down on in the, in the last, you know, couple of years, I mean in last couple of quarters even more so. The other thing is that we’ve been obviously enhancing some of the features that make more sense for international travels. For example, Icsigo Assured is now available on international routes as well. Similarly we have other such features. For example Flight Tracker Pro right. Price Lock. These kind of features are also now being exposed to international users, right. And I think as we roll out these features, some of which are industry first or better than what’s out there, I think we are seeing, you know, the word of mouth and what Rajneesh talked about, right, Product led growth, word of mouth growth sort of kicking in. And once you hit a critical mass, right, with this, we saw this in trains, right? Like you hit a critical mass of users and you know, you suddenly have people sitting opposite you in the coach actually talking about what app they use and you know, you start seeing the trickle down of that also accelerating your growth, right. So Some of that we’ve started to see very recently on the flight side where a few people were talking to each other, might say, hey, this is an app that I’ve switched to now because it’s way better and it does create that buzz. And that’s happening now in tier one. So tier two, three, because we already had the reach, was not a big challenge for us to grow in. But tier one is exciting to see and obviously we’ll see how we could continue growing that again. Competition, you know, like we don’t really spend too much time thinking or worrying or looking at because ultimately, right, if we treat our customers well and you know, we give them a great post booking experience, there’s no reason why they would switch out, you know, from us. Only if you, only if we let them down will they actually do that. So I think we just focus on not screwing up, if I had to put it that way. And you know, that’s, that’s pretty hard to do in this vertical as you would have seen as a end consumer. Right. So. So I think we just focus around that and maybe radish, if you want to add anything on the flight side.
Rajnish Kumar
Yeah, I mean, I think I just want to add one thing on competition that, you know, we do get this question asked a lot, right, Whether somebody could copy us. And my answer to them is that of course they can. Anything can be copied today, like anybody can copy anything. And especially when technology has been commoditized. But we don’t really worry about that. I’ll tell you why. Because eventually what happens is that if your core focus and culture and DNA is about customer obsession and solving customer problems, then you always have your ears to the ground. You’ll be listening to your customers and you’ll be finding those problems before anybody else can find. Now, from that point onwards, it’s just a matter of having the courage to solve those problems before anybody else does. And that requires that vision to say that I’m willing to invest in something right now that will only give me benefits later on. So sometimes it’s not about solving a problem, it’s more about solving the right problem at the right time. And that’s what innovation is all about. When you do that, you’re always ahead of others and others can copy you, but they’ll always be behind you. And I think when somebody copies you, I think this is the most flattering thing you can see right for yourself.
Saksham Savernya
Sure. Thank you. Congratulations and all the best again.
Aloke Bajpai
Thanks.
Operator
Thank you. As there are no further questions from the participants. I now hand the conference over to the management for their closing comments.
Aloke Bajpai
Thank you very much. In closing, I just want to say that it took us almost 16 years to get to our first billion run rate of GTV, but it has taken us less than two years to get to close to 2 billion GTV arrangements that reflect. The power of, you know, thinking long term and thinking of businesses more like a marathon than a sprint. And with that, you know, I would like to thank everybody who’s joined us today. Take care and keep traveling.
Operator
On behalf of Access Capital Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.