Travel tech startup ixigo’s bus business, AbhiBus, which currently enjoys a market share of 13-14% among online travel aggregators (OTAs), is looking at growing this upwards.
While ixigo’s train ticketing segment continues to be the biggest revenue generator, contributing Rs 100.4 crore to its topline in Q1FY25, its bus ticketing segment is also seeing double-digit growth.
“The overall market for bus ticketing should grow at close to 18% and we want to grow faster than the market,” Aloke Bajpai, chairman, managing director and group CEO, ixigo, told FE. He added that there is a huge untapped market as only 20% of bus tickets are today sold online.
The startup’s bus ticketing revenue increased to Rs 39.6 crore in Q1 from Rs 35.9 crore in Q1FY24.
Ixigo claims that its bus and flight segments are growing faster in terms of gross transaction value (GTV). “Buses and flights can be the growth leaders for us in the coming years,” Bajpai added.
The GTV for the bus segment stood at Rs 3,763.91 million in Q1, compared to Rs 3,245.09 million in Q1FY24, an increase of 16% year-on-year. “We are okay with a slightly lower contribution margin to push the pedal on growth,” he added.
Ixigo’s parent firm Le Travenues Technology acquired AbhiBus in August 2021 to consolidate its presence in smaller towns and cities. Talking about the reasons behind the acquisition, Bajpai said, “AbhiBus was one of the very few players who had not raised a lot of money, but actually built a beautiful business, which was almost profitable even before Covid-19.”
AbhiBus today claims to cover more than 350,000 routes across the country with over 4,000 bus partners ranging from state RTCs to private players. “This provides us with a multi-year opportunity in a market where we are uniquely positioned,” Rohit Sharma, chief operating officer, AbhiBus, said.
Ixigo is also betting on the increased appetite for spiritual travel. For instance, during the long weekend that coincided with Independence Day, spiritual hotspots such as Ayodhya, Varanasi, Tirupati and Rishikesh saw an average of 100-300% increase in bus bookings on its platform.
Ixigo also believes that with the availability of better quality buses, premium passengers will also opt for buses a lot more than earlier. “Better roads have also given a lot of confidence to the premium passengers who would otherwise be reluctant to take a bus. And, today, because of tech, people can track the bus and plan their departure from home. This has led to easier decision-making for premium customers. Also, the beauty about buses is the last-minute availability,” Sharma said.
Ixigo is hopeful that the surge in the number of electric buses will also aid the growth in the segment. The firm has invested Rs 26 crore in electric bus startup FreshBus, which is also backed by CRED founder Kunal Shah and TVS Motor MD Sudarshan Venu, among others.
Ixigo made its IPO (initial public offering) debut in June this year, listing its shares at a premium of more than 45% on the BSE. In Q1, ixigo’s profit after tax (PAT) grew by 78% y-o-y to Rs 14.85 crore from Rs 8.36 crore in the year-ago quarter. Its revenue from operations grew by 16% y-o-y to Rs 181.87 crore.
