RateGain Travel Technologies Sees Target Price of Rs 875: Anand Rathi Recommendation
RateGain Travel Technologies Reports Impressive Revenue Growth in Q4FY26
RateGain Travel Technologies has reported a significant revenue growth of approximately 174.5% year-over-year (y/y) in Q4FY26. The company's organic revenue growth stood at around 19.5% y/y, exceeding the research firm's estimated range of 10-12% y/y. Constant currency (CC) revenue grew by approximately 11.1% to Rs 7.16 billion in Q4FY26.
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by approximately 143% y/y to Rs 1.47 billion, representing a 69% quarter-over-quarter (q/q) growth. However, the EBITDA margin contracted by approximately 269 basis points (bps) y/y to 20.6%, surpassing the research firm's estimate by 352bps and the street estimate by 295bps, mainly due to the acquisition of Sojern, which has a lower margin.
Key Highlights from Q4FY26
| Metric | Q4FY26 | Q4FY25 | Growth |
|---|---|---|---|
| Revenue | Rs 7.16 billion | Rs 2.59 billion | 174.5% |
| Organic Revenue Growth | 19.5% | - | - |
| CC Revenue Growth | 11.1% | - | - |
| EBITDA | Rs 1.47 billion | Rs 600 million | 143% |
| EBITDA Margin | 20.6% | 29.9% | -269bps |
Looking ahead, the management has guided revenue growth of approximately 65-70% y/y in FY27e, comprising 12-15% organic growth and 10-12% CC growth. The company expects its adjusted EBITDA margin, excluding the Sojern payout of approximately $10 million, to be in the range of 21.5-22.5%. Including the Sojern payout, the EBITDA margin is expected to be at 18.7-19%. The company's current outstanding balance stands at approximately $93.5 million, and the management expects to be debt-free by FY28e.
Updated Outlook and Recommendation
Considering the company's improved outlook, we have increased our earnings estimate by approximately 4.6% for FY28e. We maintain our BUY rating on the stock with an unrevised target price of Rs 875, valuing it at 26x FY28e earnings per share (EPS).
Investor Takeaway
Investors should consider RateGain Travel Technologies for its revenue growth and potential debt-free status by FY28e.
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