Le Travenues Technology Limited (NSE: IXIGO) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Aloke Bajpai — Chairman, Managing Director and Group Chief Executive Officer
Rajnish Kumar — Director and Group Chief Technology Officer
Saurabh Devendra Singh — Group Chief Financial Officer
Analysts:
Unidentified Participant
Anmol Garg — Analyst
Swapnil Potdukhe — Analyst
Vinamra Hirawat — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Lead Revenues Technology also known as Hexico Q3 and FY2526 earning conference call hosted by TAM Capital Advisors Ltd. As a reminder, all participant line 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 this conference call please signal an operator by pressing Star then zero on your touch tone phone. I now hand the conference over to Mr. Anmol Garg from DAM Capital. Thank you. And over to you sir.
Anmol Garg — Analyst
Thank you Dhanish. Good evening everyone. On behalf of DAM Capital I welcome you all to ICIGO’s Q3FY26 earnings call. We have with us Mr. Alok Bajpai, Chairman, MD and Group CEO of the company, Mr. Rajneesh Kumar, Director and Group Co CEO of the company, Mr. Saurabh Devinder Singh, a group CFO of the company. Now before I hand over the call to Alok and Saurabh and Rajneesh, I would like to highlight that the safe harbor statement on the second slide of. The presentation and it is assumed to. Be read and understood. I’ll hand over now the call to Alok, Saurabh and Djneesh. Thank you.
Aloke Bajpai — Chairman, Managing Director and Group Chief Executive Officer
Thank you. Good evening everyone. This is Alok here. Thank you for joining us on our Q3 FY26 earnings call. Q3 was a defining quarter for ICSIGO. Not only did we deliver strong growth and improved profitability, but we also demonstrated the resilience of our platform, the benefits of our diversified multimodal strategy, the strengths of investing in an AI customer experience stack and most importantly, we lived up to our customer first philosophy during one of the most disruptive periods for the flight industry. Let me start with the headline numbers. We reported all time high revenue from operations of 317.6 crores up 31% year on year.
All time high gross transaction value or GTV of 4902.9 crores up 21% year on year. And our profit after tax came in at 24 crores, up 54% YoY. These results reflect strong execution across our core business and continued operating leverage. What makes this performance particularly meaningful is the context in which it was achieved. During December, following the implementation of revised FDTL norms by the DGCA, a leading airline experienced significant operational disruptions over a 12 day period. There were approximately 4,500 flight cancellations and reschedules with the impact peaking between December 3rd and 8th. This period saw a twofold surge in customer reach outs and a five fold increase in usage of our flight backing products.
As soon as the situation escalated we set up a dedicated cross functional war room to manage an environment that was evolving daily. We were also the first OTA to announce a proactive customer friendly response, refunding not just the full ticket amount but also convenience fees and ixigo assured fees on impacted bookings during the peak disruption window. When we take such calls, the only lens we apply is whether we are doing the right thing for our customers in that moment. Travel is a high trust category and moments of disruption are when that trust is most visibly tested.
Our approach during this period was multi pronged, reducing customer anxiety through timely and transparent updates, enabling affected users to quickly receive refunds or rebook stranded customers using alternate modes of transportation ensuring operational resilience at scale despite the severity of the disruptions, our flights business grew faster than the overall market with flights GDP growing at 22% and flight revenue growing at 49%. Y o y We gained some market share and a lot of goodwill as a result of our customer friendly policies in the time of crisis and lived up to our playbook of doing the right thing for the customer in all such times of crisis.
Another important highlight of the quarter was the continued momentum in our international flights business. International flights GTV grew over 50% YoY in Q3 and has now crossed 20% of our overall flights GTV for the quarter. This growth is no longer restricted to Tier one airports. We are seeing strong demand from Tier two and three cities driven by improving connectivity to Southeast Asia and the Middle east both through direct routes and efficient one stop connections. On the supply side, we have strengthened our international coverage significantly. Today we have GDS partnerships across Amadeus and Travelport giving us access to all leading full service carriers.
In addition, we have onboarded 26 airlines on NDC pipes including marquee Middle Eastern, Southeast Asian and European carriers. NDC enables access to better fares, richer content and deeper airline integrations, allowing us to build more direct relationships with these carriers to deliver better value to our customers. We are also seeing new outbound destinations strongly on our platform including Vietnam, Japan, South Korea, Oman, Kenya and Indonesia. In parallel, we are beginning to see early signs of organic inbound travel, particularly from Middle east and Southeast Asia, which will be further aided by the government’s expansion of the Etourist visa scheme to 211 countries on trains.
While the business continues to grow well, the mix of trains in our GDV and revenue has reduced as flights and buses grew faster. With flights GTV starting to come in nearly as big as train gtv. Now in our business, the train segment remains an important pillar of ixigo’s multimodal strategy, accounting for 43% of GTV and 35% of contribution margin and growing in the mid teens. Our leadership here is underpinned by deep product innovation, AI driven complexity management and a strong peace of mind stack for trained travelers. On the railway policy front, Indian Railways has implemented several passenger friendly changes since July including mandatory Aadhaar verification and linking during peak booking windows such as Advanced Reservation Period and Tatkal in order to curb misuse and fraud.
While these changes introduced some friction initially, we were quick to implement them in coordination with IRCTC and user experience tends to normalize after the first booking. More importantly, we are encouraged by the government’s intent to expand capacity. Plans to double originating train capacity across 48 major cities by 2030 along with initiatives such as Vandle Bharat Sleeper and Amrit Bharat Express give us confidence that the capacity growth in subsequent years will be better than in the past. That said, capacity expansion involves long cycle infrastructure investments, so please do not treat this as guidance. The bus segment continues to be one of our strongest growth engines since acquiring Abibas in 2021, a business doing roughly 400 to 500 crore of annual GDP, we have scaled it to over 2,400 crores of GDP in the last 12 months representing nearly 6.6x growth and it continues to compound at 40 to 50% YoY.
Our strategy here remains tilted towards growth over margins in the short to medium term as we continue to invest in penetration, brand recall and industry first product innovations. Before I hand it over to Rajneesh, a quick word on spiritual tourism and base effects. Q4 FY25 benefited from the Mahakum which drove extraordinary demand across trains, buses and flights with mid to high single digit GDV in Q4 last year coming directly or indirectly due to Kumbh depending on the vertical. While this creates a base effect for Q4, our Great Indian Travel Index 2025 also shows that spiritual tourism still remains a strong secular trend.
Destinations like Varanasi, Tirupati, Prayagraj, Ayodhya and Shirdi continue to see long term growth with Gen Z participation rising sharply particularly through bus and train travel. With that I will hand over to my friend and co CEO Rajneesh to talk about our AI products and new growth strategies.
Rajnish Kumar — Director and Group Chief Technology Officer
Thanks Anoop. Q3 was a real world stress test of our AI customer experience stack and I am really proud of how the platform performed in a time of need. The December disruptions on how we handled them underscores the importance of our sustained investment in an AI lead customer experience stack and utility driven product innovations such as Flight Tracker Pro, which proved critical in managing large scale disruptions during a period of crisis. We orchestrated a coordinated response that combined the speed and scale of AI with human judgment, deploying both efficiently to support impacted customers. Verified information was continuously sourced from authoritative channels and proactively communicated to users.
While well defined SOPs enabled rapid handling of customer queries, multiple proactive touch points were initiated to ensure timely refunds and smooth rebooking wherever required. We leveraged AI driven outbound calls to proactively inform customers of flight cancellations or reschedules, automatically trigger refunds and alternate bookings, and guide them through next steps. Tara, our AI agent, played a central role by actively assisting customers with refund processes and recommending alternate travel options. In parallel, our AI augmented human support teams operated extended hours during peak disruption periods, helping us maintain strong customer satisfaction despite elevated volumes that we saw during this period.
In the third quarter, the percent of. Voice calls that we were handled that were handled end to end by AI stood at almost 76%, in fact more than 76%. But what really stood out for me was that in December when the crisis unfolded, we stepped up proactively calling voice calling and with AI handling a whopping 90% of all calls in December. And that was more than 150,000 calls handled end to end by AI during this period. Thanks to this, even though overall customer contact volumes across voice and chat more than doubled, resolution times remained within internal benchmarks that we strive for and customer satisfaction metrics stayed stable throughout the entire period.
This is evidenced by our calls answered within 2 minutes metric which remained over 96.7% despite the elevated volumes and our average refund time remaining just 3 hours and 10 minutes. Flight Tracker Pro also saw extensive usage. In fact, it was got sent product for a lot of users and airline staff. This enabled customers to track real time flight schedules at airports with multiple instances of positive feedback from both travelers and Air Force staff on its usefulness during these challenging conditions. These moments reinforce our belief that AI is not just a cost lever, but trust and experience levers, especially in moments of crisis.
I’ll reiterate that we believe we are living through a once in a lifetime technology transition with AI. Even bigger than the emergence of the Internet or smartphones, AI has clearly moved beyond experimentation is now entering a phase of real product market fit across agentic workflows core infrastructure and applied vertical use cases, including travel. We are at a juncture in history where we’ll be judged not by our performance in any one of the quarter or any one year, but by how we were able to lead our industry’s AI transformation and demonstrate the results in customer delight with long term growth and profitability.
The Flight Business we also added more inventory as Alok talked about, launched Airport Cabs so that you can seamlessly book taxis to or from the airport right from inside the app, and most recently have enabled Armed Forces Fares which allows those who serve our country get access to preferred fares from airlines, offering up to 25% off the regular fares. Moving to Buses now the bus category has started seeing more innovation both for the customer and the operator, partly due to our intense focus on this category over the last four years. If I had to name all the industry first features ABHIBUS has launched since we got involved, the list would be very very long.
Starting from our ABHIYA showed service guarantee and full refund for delays and cancellation. The pink seat feature for women travelers who wish to be seated next to other women travelers Bus Insights where we even tell customers right at the time of booking their exact bus model with license plate number and the age of the vehicle 360 degree walkthroughs that we have built inside several buses to allow customers to see what their seat or sleeper berth will look like exactly and many more features. Last quarter we observed that some bus incidents and breakdowns happened and then it made us reflect how important safety is for our customers.
So our bus safety reports now cover over 40,000 buses where our platform validates regularly their permits, their insurance, their RC and fitness certificates. The ready Go platform for bus operators now gives them more real time insights control over their operations and last quarter we launched an industry first roadside assistance program offering alternate travel options in case of bus breakdowns or incidents. Moving to the train business, we have added Mumbai Metro along with Delhi Metro for QR code based Metro Ticketing and are seeing decent usage in that and we also went live with our Confirmed Ticket train ticketing funnel inside the rapido app.
Both exigotrains and confirmed ticket are now at 4.8 app ratings on Play Store and that is at a scale of millions of reviews by the way, reflecting consistently high customer satisfaction. Having lived and traveled globally, I can confidently say these apps work better than any train app I have used even in any country outside India and hence would be the top global train apps in terms of product, utility and user experience. Now let me talk a bit about hotels as well. We’ve made several product improvements on hotels that users are complimenting us for, including our AI summaries for hotels and smarter ranking algorithms.
Despite seeing good quote unquote growth, I would say that we are still not at the product market fit stage on this business yet, which would involve solving the what you see versus what you get problem that the budget hold space is riddled with. Mostly, we now have some deeper learnings on what is broken in this space and we are building our hypothesis on how those can be solved. We have talked to many customers and hoteliers and also done on ground market research to test the hypothesis and we expect to intensify our efforts on both product and supply in the coming fiscal year.
Last quarter we kicked off adding direct total supply by tying up first with channel managers who work with multiple hotel chains and independent holders hotels. Through these tech integrations we can onboard direct supply without deploying a large team on the ground. We’re now also adding budget holder chains and the first set of independent hotels focused on those segments that overlap with our core user base. Now going back to my favorite topic which is AI, let me elaborate a little bit more on our AI strategy. The disruptive use cases for AI travel need some key ingredients, you know, talented teams and access to large data sets and real user journeys.
Thanks to ixico’s AI first DNA, we have the ability to accelerate ideas and teams. I often find founders at the forefront of AI understanding and building promising products as well, but without enough real world use cases or enough vertical data or distribution to test, learn and demonstrate the impact of those ideas. Based on our deep experience with AI over a decade, we have a unique ability to scout and diligence such AI first teams and ideas. A strong preference will be access to frontier AI talent working on ideas or applications that are synergistic with our own future plans and product vision.
We’ll also continue to invest organically within our own AI stack. AI is also already deeply embedded in our products. From planning and discovery to predictions, pricing, discounting, customer support, operations, supply side efficiency, we use AI practically everywhere and we are doubling down now on voice and personalization as well. So why now? The current phase of the AI cycle. Offers early access to exceptional founders, talent and platforms, which we believe is a durable strategic advantage. We intend to make a small number of focused, high conviction investments, partnerships or acquisitions in the short to medium term where there’s a strong alignment with Exigo’s core travel ecosystem, digital data and AI strength and distribution. These investments are not financial returns alone. They are designed to accelerate learning, enable faster internal adoption of AI, and create long term strategic optionality. Here’s another important reason on why the timing is correct and this is about the slow death of software as we know it.
All software will be rewritten not line by line, but rule by rule, because the assumptions it was built on are breaking. Intelligence no longer needs to live inside hard coded logic, interfaces no longer need to be fixed artifacts and humans no longer need to adapt to machines. In the new model, software infers intent, it remembers context, and it renders itself on demand, turning applications into temporary projections rather than permanent products. Code stops prescribing behavior and starts defining constraints, data access and truth, while intelligence lives above it, adapting continuously to each user and moment. Stability shifts from deterministic outputs to successful outcomes and change becomes cheap, local and constant.
Most existing software cannot survive this inversion, not because it’s bad, but because it encodes the old rules too deeply, so it will fade into the background as a system of record while new AI native layers quietly replace the experience. This isn’t just the rewrite of software around humans for the first time. It’s also a once in a generation opportunity for builders, making this the moment to scout relentlessly back exceptional teams and place bold, concentrated bets on those shaping what comes next. With that, I’ll hand over the call to our friend group CFO Sonab to talk about the numbers.
Saurabh Devendra Singh — Group Chief Financial Officer
Thanks Rajneesh. At the end of last year, I had two choices. One was to go to my IIT. Delhi 25 year reunion, something I’ve been. Looking forward for months. The other was to use the days off slightly differently. Almost on a whim, I packed a couple of Exigo branded T shirts and. Decided to take a simple trip, part. Light, part bus, part train, starting at Ayodhya Airport and ending up at Varanasi Railway station. Now I won’t lie here. I did miss meeting a lot of old friends, getting silly drunk, and also the networking that comes up with reunion of this kind. But alternating between Iczigo Confirmed Ticket and Abhiba’s T shirts, I realized something I hadn’t fully appreciated for a long time. The impact we as Exigo are having on people’s lives. Everywhere I went, people came up to me, smiled, shared their little Ichigo stories. Moments where our brand had quietly become. A part of their journey. Some simply said thank you. Others told me how we made travel. A little easier, a little less stressful. And some even took time to offer suggestions. Not as customers, but almost as partners who genuinely wanted to wanted us to do better. In those moments it all made sense. Now I can talk about the trip for hours, but this is a one hour call and I have an obligation to talk numbers. So let’s discuss the numbers. As always, all the numbers are in rupees crore unless stated otherwise and year over year comparisons are Q3FY26 against Q3FY25. Our gross transaction value stood at 4,902.9 crores up 21% from 4,036.3 crores last year. Revenue from operations came in at 317.6 crores, a 31% YoY increase.
Contribution margin was 115.3 crores up 12%. YoY with contribution margin percentage at 36%. Adjusted EBITDA stood at 30.8 crore compared to 24.3 crore in Q3.25, a growth of 27%. PAT was up 64% at 24 crore versus 15.5 crores. Now these numbers include some one offs that I’ll discuss closer to the end. Moving on to the business segment Overview on trains I’ll confess I regularly try. To get invited to train team meetings. Because for me they are a master class in focus. What I liked most this quarter was the team’s agility at this scale, adapting quickly and benefiting from the changes Alok alluded to earlier in trains. We booked 26.12 million train segments up 8.8%. YY GTV was 2095.5 up 15%. Revenue stood at 134.1 up 12%. Contribution margin was 40.6 up 2% with a contribution margin percentage of 30%. Sales contributed 35% to the overall CM in slides. It was a tough quarter and our response stood out. Those 12 days in December reflected years of customer obsession and technology led execution.
We booked 2.8 million flight segments up 15.2%. GTV was 2,055 crores up 22%. Revenue stood at 102.4 up 49%. Contribution margin for Flyht rose 45% to 39.4 at a contribution margin percentage of 39%. Flight contributed 34% of group’s total CM. Process continued on the growth trajectory and. There’S still plenty of road ahead. Passenger segments grew 33% YoY to 6.73 million with revenue from operation up 47% to 75.6. GTV rose 36% to 671. Contribution margin was down 1% to 34. Crore and at a 45% contribution margin percentage bus has contributed 30% of the total CM. Now as promised, let me highlight the key one offs and call outs in the current quarter. The one off and call outs in FY26 Q3 included share of loss from Feshwar, an Associate company of 2.9 crore 2.8 crore one time impact due to the new labor code for Q3FY25. The one offs and call out comprised of share of loss of fresh plus of 1.9 crore. Now apart from this, the disruption in the flight operations during December arising from operation challenges faced by a leading operator including the impact of loss booking and cancellation would have resulted in an approximate adverse impact of 2 crores in our EBITDA in Q3FY26 on the AI investments Rajneesh talked about, I want to reiterate that when we raised the preferential issue last quarter we had earmarked 25% of the proceeds for inorganic growth opportunities and 25% for organic growth initiatives.
Going forward, we will continue to deploy capital only into high impact opportunities that align with our strategy and offered clear synergies whether through AI, travel tech or exceptional talent that fits into our long term vision. To maintain prudence, we have constituted an investment committee to evaluate and approve such investments and acquisitions where we will benefit from the deep expertise of two of our board members. Mr. Shailesh Lakhani, formerly a managing director at Peak15 and widely recognized for backing some of India’s most successful ventures, and Mr. Rajesh Sani, the founder and CEO of GSF India, a serial entrepreneur and active investor in Indian startup ecosystems, will be a part of this committee.
I’ll end with an anecdote. When we started preparing for this earning call, our design and branding team was running on a packed schedule and I had just come back from my Varanasi trip, so by the time we got on to kick off the meeting, it was very close to the result. As they walked me through the concept, they spoke about the perspective and the depth, the isometric language of the visuals, the tiny details that they wanted to add on the Runway on the presentation slide cover, and the discipline of keeping it all consistent across every page.
Seeing how much they already had on their plate, I tried to make things a little easier for them and asked, why do we really need to spend so much time on the design template of an investor deck? Last quarter’s template could work. They looked at me with a stare usually reserved for an unwanted rodent about to devour its favorite cheese and then the design head said something that stayed with me. It’s never about taking an easy path. It’s always about doing what is right. We do it for the craft because that is what we are.
And when I think about it, it captures what Exigo has always been about and we will always be. We do it for the craft because that’s who we are. And with that final thought, I’ll pass it on to the moderator for Q and A.
Questions and Answers:
operator
Thank you so much, sir. Ladies and gentlemen, we’ll begin with a question and answer session. Anyone who wishes to ask a question may press star N1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Mr. Anmol Garg from DEVCapital. Please go ahead.
Anmol Garg
Yeah, hi, thanks for the opportunity and congratulations on good set of numbers in. A tough quarter for flights. I have a couple of questions. Firstly on our bus business. While the growth here remains very strong, but we have seen that almost in a year there is a 20 percentage point in the contribution margin in this business. So how should we think about more sustainable contribution margin in this business in more medium to long term? Yes, hi Anmol, this is Alok here. I think we have been calling out for at least 3, 4/4 that we have been seeing the opportunity to push the pedal on growth on buses, given how low the penetration of digital bookings is in the country and is still in the low 20s.
The other thing we have seen is the ability to cross sell and upsell buses to a large part of our funnel. And of course products like Travel Guarantee have actually aided the growth of some of that because if the train ticket is wait listed, you do get the option to actually buy the bus almost for free given you get 3x back. So what we have chosen to do over the last few quarters is deliberately chase growth over purely chasing more profits because I think there is a phase of the business where this strategy makes more sense just like we’ve done in other phases.
Like if you asked me about flights four or five years ago, I would.
Aloke Bajpai
Have said the same thing. But now flights has reached a certain scale and therefore producing a certain margin. So I think on buses the idea is to now we are in the 40s right on contribution margin. I mean our intent would be to stay somewhere in that sort of range and not go down Too much from here. I mean, the idea is if there is an opportunity we see in a certain quarter where we want to invest in brand or in performance because we see more returns from it, I think we’ll not be shy of doing that. And just to add like what Rajneesh had mentioned about these new products that we’ve launched.
Right. So I’ll just give you one example. We launched an industry first product where if your bus breaks down, we will arrange an alternate mode of transport to take you to your destination. Now, these products involve a cost, Right. And if we are doing this for our customers, we are doing it to improve customer experience. This is not very different from our playbook on flights where products like Flight Tracker are built at a certain cost and they involve a certain cost even in operating them. But we do it because that’s the right thing to do for the customer at that moment.
Right.
Anmol Garg
So I think the way you will see the rewards coming back is in not just growth, but better NPS and better stickiness over time. And just to it’s not a guidance, but I think we’d be comfortable to operate even a couple of percentage points, 1 or 2 percentage points lower than this even there. But we would not want this to go into the 30s just to give you some comfort on that.
Aloke Bajpai
So just one more thing there anmol, as we mentioned in the FAQ that last quarter there was also we’ve chosen to double down on marketing activities and promotions and it would have had a bigger impact, was it not for the additional safety inspection that led to grounding of some supply in November. But we discussed your question also in detail as question three in the faq. Sure.
Anmol Garg
And is there any one off in this margin? You know, you indicated that some part of the exigo assured and the convenience fee was also returned to the. You. Know, was returned back. So is there any kind of impact because of that?
Aloke Bajpai
So as I mentioned, so if you take a combination of the convenience fee and I mentioned as a one off this time, which I did in the end of the speech, if you take both of these plus the what we estimate as the lost booking, it would be around 2 crores, which would have been the effect of those 12 days. Which is already fully absorbed in the. Q3, which is already in the. Yeah.
Anmol Garg
Understood, understood.
Aloke Bajpai
Secondly, we, in our comments, we indicated that we are adding direct supply in the hotel business. So do we want to scale up this business organically or are we, you know, planning to, you know, go through acquisition route to add more direct supply into this business. Yes. So see what Rajneesh talked about was the fact that we have kicked off direct supply addition predominantly through the channel managers route to begin with and by tying up with certain budget hotel chains. Which we can tie up directly through. Either these channel managers or otherwise. And at this point, you know, it’s not a people intensive way of adding this supply that we are sort of pursuing as a strategy. The reason is that till the product market fit that Rajneesh talked about, that we are at this point where we want to be in product market fit on what you see versus what you get. I think that’s an exercise happening in parallel with a bunch of interactions with customers as well as hoteliers to figure out what’s the way we could solve for on the ground issues where the budget hotel promises something and does not deliver it.
I think once we have a better handle on that is when you will see us scaling up supply even faster. Both these exercises are happening in parallel and like Saurabh alluded to, there is a point where you step up those investments to build that even faster. But I don’t think we are sort of saying that we are in a hurry on this. Right. So the idea is to have better NPS in whatever we have selling directly, which means that customers are satisfied with whatever we are able to do. And of course there’s a slight, a great expansion you can go to when you go direct.
But beyond that, you know, it’s not something that we need to build overnight. The reason is that both these exercises have to happen in parallel.
Saurabh Devendra Singh
Anmol though I would just add one thing. On hotels, look in case we find, in case the conviction increase and I’ll request Rajneesh to talk about where our conviction is, but in case our conviction increase. And as long as I’ll be able to say as our conviction increases, we will put in more resources and capital. Behind this idea as our conviction increases. But I will pass it on to Rajneet to talk about.
Rajnish Kumar
So I think just reiterating what Alok said, but I think there are two key points to understand here that we. Are still in the build out phase. And we’re still in the product market fit phase. That means if you look at our obsession in the past on building for consumers, we’ve never gone out and spent too much money on a product which hasn’t reached product market fit because that’s how product LED growth happens. And so once that point doesn’t reach, we won’t be burning a lot of money on this product vertical. It would mostly be on spending money on scaling up the teams supply and you know, bringing about the product market fit, etc. Having said that, on the inorganic side, you know, we are always on the lookout for great teams and great products.
If you do find something, we will always be on the lookout. And if you find something, we’ll, you know, that always goes without saying. Irrespective of whether it is hotels or buses or any vertical. That one intra or AI for that.
Anmol Garg
Sure. Thanks. Thanks guys. Just one last question from my end. We have seen, you know, very strong growth in our flight business despite weaknesses. In in the sector particularly. So is this largely driven through our own platforms or is there any increase in volumes to our partner platforms as well during the quarter?
Aloke Bajpai
Yes. So I take that, I think this was our last earnings as well. But just to reiterate this again, the fastest growing channel for growth on all three lines of businesses are organic for us. In fact, I would say that if you look at if we were declaring just organic, the growth would have been faster. Way faster. That’s another way to think about it.
Anmol Garg
Yeah, sure. Thank you guys for answering my question. I will join back in the queue.
operator
Thank you. Our next question come from the line of Swapnil Pot Duke from JM Financial. Please go ahead.
Swapnil Potdukhe
Hi everyone. Thanks for the opportunity. My first question is with respect to some announcement which had you had done on the BSE regarding a Singapore subsidiary. Can you elaborate a bit more on what you intend to do over there. And which. The kind of engagement you intend to have through that subsidiary?
Rajnish Kumar
So Swapnil, as we mentioned during the preferred race that if we are and even Rajneesh talked about during his section about how we are looking to looking for ideas, looking for great teams, looking for great companies. So Singapore subsidiary in some sense would be a channel for the overseas investor investment that we would be doing. And as we’ve said and we’ve defined how and why we would be doing the investments through the past. So it’s that channel that we are looking for and setting it up for. So will it be fair to say that these investments that you do will be for localized travel in those countries. Geographies and targeted towards, as we just.
Aloke Bajpai
Said, swapnil, as Rajneesh just said. So it could be a range of things, it could be technology, it could be travel, it could be anything that’s adjacent to us. What the key always has to be is it has to be a great synergy, it should be a great team. It should be in some sense like what we have done with either confirmed ticket or Abhibas. Okay, Rajesh, could you talk about the AI part which you mentioned? Could you just touch upon that?
Rajnish Kumar
Yeah. I mean, see the adjacencies in travel, of course, that goes without saying. And global markets are, you know, great as well. So adjacencies anywhere, any market is always good. Like I said, we always keep looking out for great teams, great products. Right. They could be anywhere. So that’s. One second is the adjacency. Adjacency with respect to how obsessed we are with AI and how it’s going to change the world, how transformative it is as a once in a lifetime opportunity. That’s the other aspect that we are very closely looking at. And you can see that the opportunity that it presents, like, I think globally, all smart tech folks right now, they are all kind of looking at building something big in the next two to three years because there’s a massive amount of opportunity that AI presents, not just for the fact that software is dying and it’s going to be completely rewritten.
It’s also because a lot of across, not just the compute layer, but beyond services compute, like things like, you know, life sciences, quantum, etc. And even, you know, in the foundational layer as well below the AI vertical native layer. All of those present massive amount of opportunities. And I think every smart person on the planet sees that. And so there will be like a flurry of, you know, really smart people assembling smart teams and building AI native products in the next two to three years. And I think one of the goals for us also is to kind of scout for such teams and invest in them.
Swapnil Potdukhe
Yeah, thanks. Thanks, Rajneesh, for that answer. And pardon me for probing you a bit more on this piece. The reason I’m doing it is because. There was a mention of some organic inbound traffic that you are targeting. And in the past we had instances where some of the Indian OTAs built some platforms specifically for Indian diaspora in Middle east, kind of. So do we have those kind of plans? Is what I was will be the other question related to this.
Aloke Bajpai
I think just to answer this directly here. See, there are two kinds of things here. One is, you know, something which could be within, travel outside, which excites us. But it, like Rajneesh said, it has to fit into our broad lens through which we look at, you know, team technology, synergies, etc. But it could also be just, you know, something which is more AI led and where we believe that there is, there is a way in which we can benefit from it in the long term as well. And I think that’s the broad way we are thinking around it at this point.
We don’t have any like as and when we have any specific investments or acquisitions to announce, obviously we’ll come to the market with. But at this point, like Rajneesh said, we are living through a moment in history where, you know, in the next couple of years, the kind of things we will see out there will be unprecedented. Right.
Swapnil Potdukhe
And so if we don’t, as a company that is at this scale, that understands technology and AI and has a massive user base, if we are not able to take bolder bets at this time, when will we take them?
Rajnish Kumar
Right. So I think that’s the broadest thought process behind why we want to look at both organic and inorganic strategies for making these kind of investments.
Swapnil Potdukhe
Perfect. Got it. My second question is with respect to the operating leverage which is visible in your business, in a way, your contribution margin growth has been significantly slower, but still you have been able to deliver a very strong EBITDA growth. And I can see that mainly that is coming from employee cost ex hoffisofts which seem to have been coming down on a quarter to quarter basis. 46 crores in 1Q to 41 crores. Now I just wanted to understand is, is this also because of some AI investments that you have done or some, or, or there are some other reasons why our, you know, employee expenses, especially the fixed cost side, have, have been.
Coming down on a quarter to quarter basis. There’s a decent decline that has happened.
Rajnish Kumar
Over the last couple of quarters. Look, two parts to it. Remember that employee, as we increase the verticals, there will be costs. So as in, remember if, as Rajneesh mentioned to Anmol’s question, if the product market fit starts connecting, starts working, that will be there on technology part. Remember we were always working on technology. So in that sense nothing has really changed. Because if you see even on customer service use case, Tara has been there forever now. So it’s been there since the Google transformer models age. So it’s not something new to us. Everything that we are doing right now has a technology layer in between, as in again, on a personal level, I love getting into Rajneesh meetings or calls just to see where the world is changing, what’s happening, the new thing which is happening and we’ve always been that.
But I won’t call it something very differentiated. It was something that was there from the start for us. It’s in the DNA for Us and.
Aloke Bajpai
The other way to see this is that on the mature businesses, right, you start seeing operating leverage come in. But on new businesses, you know you are still investing. Right. So when we talk about growing hotels, there will be a stage once you have product market fit where you think that expanding that team for direct supply or for whatever you want to do on the ground, I think makes more sense. So I think there are phases for this last one year. You know, obviously on our mature businesses, we started to show that there is operating leverage coming in. And part of it obviously is because of all the things Rajneesh talked about that if you don’t need to deploy hundred more people to service peak time calls, I think that shows up also on the bottom line in some sense.
Rajnish Kumar
Right. So I think. That’S a mix of both. But don’t think of it as like we’ll not be shy of, let’s say investing and putting more people at work in areas where we believe that it’s required. But on the core business, when you talk about mature categories like train, we are seeing that operating leverage coming in on flights, you can see it coming in on buses. We are investing like we’ve always been calling out. I think it just makes sense to invest when the category is at 20s penetration. Hotels category is at 20s penetration. So you want to grow more new users from it.
So these are areas where we’ll not be shy of investing. Yeah.
Swapnil Potdukhe
Okay. Is there any EBITDA margin in your mind that you work with or, you know, the range that you’re targeting? Right now you’re at around reported basis, around 8% margin. But do you, do you have any plans to go to, you know, low teens kind of a number and is there any thought process on that side? I understand that there could be investments on hotels and in between. But still directionally, how do you look at the margin expansion going forward?
Aloke Bajpai
Think of it in a very different way. And again, I am not giving you. A quarterly guidance because as I’ve always. Said with you, right from the start, the first time we talked that especially in our stage of business, a quarterly guidance doesn’t make sense because we are in the growth stage. Having said that, think of it this way. I, as of right now am not declaring what is widely considered as the highest margin business just because I’m investing in that business. So if you believe like I do that we will succeed in it, and I’m not saying we’ll succeed tomorrow. I’ve always said it’s a long term vision. But we believe where we are right now we are at par or probably better than what we expected ourselves to be when we started this journey.
But that is the highest margin business. So you can see that, you can see that growing over the next five years. And I believe as you can see from every business segment that we have, once we get the segment right, we do give a higher margin than what anybody else can give in that segment. And trains are the proof of the pudding that I’m able to give the contribution margin for trains because I’ve got it as a profitable business. While again, I don’t know other numbers because people don’t give it out. But I would be very surprised if anybody can match our margins in that kind of a business.
What I’m saying is if you look at it in the long run. It. Will improve on a quarter on quarter basis or the investment phases as in. Due to competition reasons or due to. Reasons why we are building it up. You might visually see number varying but visually if we don’t invest, we’ll never make a great business.
Rajnish Kumar
Yeah, I think the answer to this question will be more obvious. Let’s say in a three to five year time frame rather than in a, let’s say six to 12 month time frame. That’s the way to think about which is why we are not guiding on any sort of margins formally to the market.
Swapnil Potdukhe
Got it.
Aloke Bajpai
I know I didn’t answer your question, but that’s the truth.
Swapnil Potdukhe
It’s fine. Now just quick questions on your hotels business. Any any sense as to how much. Business in that side is happening on the direct side given that you already started getting some supply. You said through channel managers.
Aloke Bajpai
We’ll probably come back with it in the over the future call. We are not going to put the cart before the horse. You have to be a little patient for the answers to these questions. What I would recommend. Sorry, sorry. What I would recommend though is you should use our app and continue using it and you’ll keep on seeing the difference in the product as it comes about. I’ve seen some of the updates that we are planning and you should just keep on using the product and you will get an idea around it.
Swapnil Potdukhe
Just, just the last one, you did. Highlight that there could be some base. Impact because of kum, but you didn’t. Happen to quantify those numbers in your. In your letter if you can quantify some, some impact on the waves that.
Aloke Bajpai
We should work with. Yeah, I believe I did talk about it. But just to reiterate what I said last year, KUMB was a Mid to high single digit GTV contributor. Right. So in the Q4 numbers for last year and remember because of that there were secondary effects like higher average transaction value, you know, like we, I still remember we even sold buses in, you know, 10, 14,000 sort of ticket price range, you know. So I think we’ll have to see how this year pans out. But basically for most travel companies, right? Not just for us, I would say for the whole industry, all OTAs, all airlines, buses, etc.
You will see a base effect because of the comb factor. Oh, hello.
Swapnil Potdukhe
Thanks for taking those questions in all of this.
operator
Thank you sir. Next question. Thank you. Our next question comes from the line of Pankaj Mahendrata from BofA. Please go ahead. Thank you.
Anmol Garg
Good evening management. I just have one question around your hotels strategy. So just some big picture, you know, thoughts around how do you think about the product market fit? So for example, if the penetration in hotels is already at about 20 or percent, let’s say five years, 10 years down the line, if that number doubles or 1.5x, what would it mean for.
Rajnish Kumar
You to achieve it?
Unidentified Participant
Is it, let’s say discounting lower take rates or getting some sort of supply which is not out there on other platforms? And what does it take to convert those guys which are not already online? So just wanted to understand how do you define what sort of properties do you already have live on your platform and incrementally what is it exactly that.
Rajnish Kumar
You are looking for? Yeah, so I think in terms of inventory there is more or less parity in the industry. Right? I mean, because the way people source it, I mean one thing is that if you have direct relationship, you will have better take rates, which is obvious. So we are investing on that side. But in terms of very, very unique inventory as of now, that’s not really something that we will be able to focus on because right now our bigger focus area is on creating product market fit by very, very deeply looking at customer pain areas and solving for them. Right. One of the things that we keep talking about is the what you see versus what you get, especially in the budget category.
Right. I mean if you happen to walk into a five star hotel, I mean the pictures would look worse than the hotel actually is if you go and see them. But if you look at the budget category hotel, then the picture is completely different. Like it’s completely the opposite. Like pictures look way better than the hotel actually and that leads to a lot of, you know, dissonance. So there are these kind of pain areas that customers have or, you know, customers landing, ending up at a hotel only to find that their booking is not in the system or there’s no room left or it was sold to some walk ins.
Those are the kind of pain areas that are much, much bigger pain areas. And also the fact that consumers who are still walking in and booking offline still do not have the confidence to kind of book online. So we are entirely focused on these kind of, you know, customer pain areas and how to solve them with product solves and AI and technology in the context of the customer base and customer cohort that is most relevant for, you know, people who visit our or who frequent our platform. And that’s the thing about doing these. Creating this product market fit. The reason it takes time is that if, if tomorrow I need to figure. Out a way in which, you know.
Rajnish Kumar
Which are the hotels which have consistently given good experience or which are the hotels which have constantly given bad experience, etc. This will also depend on a lot of data that we are collecting as of now in the form of AI reviews and AI calls, customer check ins and stuff like that, which over a period of time is getting baked into the algorithms as well.
Unidentified Participant
Right.
Rajnish Kumar
And this is how we are trying to create a product which is going to create product led growth and not rely too much on marketing expense. Having said that, the fact that we been the brand, even if it’s so built organically, it has always been built with transportation as the primary focus. And a lot of people who kind of know our brand or name, they only relate to us as a brand which does fly flight booking or a train booking or a bus booking. And so at some point of time when we are confident about our product market fit and the product and the experience, we would obviously definitely want to create that perception that, you know, we also stand for hotels as a brand.
Aloke Bajpai
Yeah, I would just add to what Rajneesh said and you know, I’ll take a small anecdote. So Varanasi gets about 140 million. That’s about 3,80,000 people landing there in a day. Now not all of them may need a hotel or a room, but even in a small town, you know, you can imagine that a large part of that demand is still not being tapped into online. And we saw this last year during KUM as well that, you know, offline and just walk in remains a dominant channel. The interesting thing is that if you look at our user base and if you look at the number of segments that we are doing today, we are very close to 4 lakh segments a day now.
And these passengers, you know, a lot of them who actually need hotels today, their behavior is actually to just land in those cities and look for a hotel. I think we are talking about changing that behavior through superior product experience and superior customer experience, as well as some sort of solve on the what you see what you get problem that Rajneesh talked about. But once that happens, remember, that will change this penetration. So if you roll back 10 years and I asked you what the hotel penetration in India was, the answer would still have been the same, you know, and I think.
Or maybe slightly less. Right. But you know, if you look at what is needed to change that, it’s basically to solve that problem. Right. And we are fortunate to have the right audience where once you solve that problem, you can see growth in bookings very rapidly. Right. So look at the train vertical. Before we got in, the OTA business would have been around 14, 15% of the overall train tickets sold. We got in. And today it’s closer to 20%. And we are the leaders there. On the bus side, we have grown the market after we entered it. I think on the hotel side, we.
Expect to do the same.
Unidentified Participant
Understood. And just one quick follow up on that. When I, let’s say browse the app and website on some of the hotels, especially in a few cities, I saw something called as a best price guarantee rate applicable for the hotel. So on a real time basis, how does the team essentially ensure the pricing which is available to an user is probably one of the cheapest or cheaper. Out there compared to other guys out there? And what is the sort of effort you are, you know, putting in? So is price actually the moat currently for whatever this applies today? And that’s it from my side. Thank you.
Aloke Bajpai
I’ll just start with the first part and then pass it on to Rajneesh. If I had a moat which was very clearly defined and public right now, I would have been putting it out. As a separate lob. As I’ve always said, and you can read through my past FAQs, I believe that we are in the process of defining what it will be and that is why we don’t break it out. But I’ll pass it on to Rajneesh for the other part of the question.
Rajnish Kumar
Yeah, I mean, of course there’s a certain percentage. I mean, we use a lot of data science to figure out what we have in terms of deals and pricing and commercial relationships where we can actually afford to do that. There is also remember that this is a build out phase. And I think you will never be able to figure out whether there’s a product market fit if consumers don’t even know about your product, they haven’t used it once. So there’s obviously cost of kind of acquiring a first time customer. And I think some sort of inducement on the customer side, discounting side, etc.
Is needed to get customers to come on board and use the product for the first time. These are strategies on the same lines. There’s nothing new that we are doing here that has not been done before. So. Yeah, I mean, what was the second. Part of your question? Sorry.
Unidentified Participant
No, you know, Rajneesh, I just basically wanted to understand that, you know, is pricing the lever right now for users to come in and let’s say try and book. Pricing will always be a lever. Not the only lever though. Okay.
Rajnish Kumar
But like I said, if you are looking at building a great product, I mean, if customers don’t come, for example, if somebody has never booked a flight on Mexico, they would never understand the kind of post booking experience that we offer in the form of the ability to get a refund instantly or to be able to get checked in automatically or to be able to kind of track flights with the flight tracker Probe, which provide predictive AI based alerts and predictions on flight status. Nobody will get exposed to that kind of a user experience unless you have not booked the flight first.
Right. And obviously there’s a word of mouth that would kick in after that. So some form of customer inducement cost will always be incurred in order to kind of scale the product in the beginning. There are very, very few products in the world which have been able to scale purely by word of mouth. And you know, the ChatGPT kind of success, right? I mean, that’s very, very rare. Right? Maybe one in a million product. Right. But otherwise, you know, for the normal human beings, there will always be a combination of a great product and some sort of marketing spend in the form of discounts, etc.
Unidentified Participant
Understood. Yeah, that’s helpful. Thank you so much. And all the best for future quarters.
Rajnish Kumar
Thanks.
Aloke Bajpai
Thank you.
operator
Our next question comes from the line of Vinamra Hirawat from Jefferies. Please go ahead.
Vinamra Hirawat
Hi sir. Am I audible?
operator
Yes, sir, you are.
Vinamra Hirawat
So congrats on a good set of results. Just a couple financial bookkeeping questions. Your other income for the quarter has basically doubled or more than doubled. What is the reason for that?
Aloke Bajpai
It’s simple, right? Last year, last quarter we raised primary capital. It’s the interest from that.
Vinamra Hirawat
Okay, okay, got it. And your Revenue versus contribution margin. What are the costs basically that you take out from your revenue to reach your contribution margin.
Aloke Bajpai
So last quarter we have talked about it in detail in the FAQ and earlier too, but let me still give it out. So what I do is we would take out any directly attributable cost which would include performance marketing, it’s classic CM2, it’s partner expenses, payment gateway expenses, performance marketing, any kind of distribution, everything would be included. Anything that can be directly attributable.
Vinamra Hirawat
Got it. Got it. That’s it for me. Thank you.
Aloke Bajpai
So it would. So in the case of. Remember the other thing that you should realize is that we have a large amount of what we call the peace of mind stack, which is our value added services stack. And if you see the attach is about 29, 30% and that the cost of that product also gets deducted at this level.
Vinamra Hirawat
Understood, sir.
operator
Thank you. Thank you. Ladies and gentlemen, due to interest of the time, that was the last question for today. I would like to hand the conference over to management for the closing comments. Thank you. And over to you sir.
Aloke Bajpai
Thank you everyone for joining our Q3 earnings and once more wishing you Happy New Year and see you all in the next quarter.
operator
Thank you sir. Ladies and gentlemen, on behalf of Spam Capital Advisors Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.