Easy Trip Planners Ltd Rating Upgraded to Sell Amid Mixed Technical and Financial Signals

Quality Assessment: Financial Performance Remains Troubled

Easy Trip Planners operates within the Tour and Travel Related Services sector, an industry that has faced significant headwinds in recent years. The company’s quality rating remains poor, reflecting its very negative financial performance in the latest quarter (Q2 FY25-26). Operating profit plunged by a staggering 84.04% year-on-year, marking the fifth consecutive quarter of negative results. This sustained downturn has severely impacted profitability metrics, with the latest six-month PAT declining by 66.44% to ₹19.58 crores.

Further compounding concerns is the company’s PBT less other income, which fell by 113.8% to a loss of ₹2.72 crores compared to the previous four-quarter average. Return on Capital Employed (ROCE) has also deteriorated, standing at a low 7.90% for the half-year period, signalling inefficient capital utilisation. These figures underscore the company’s ongoing operational struggles and weak earnings quality.

Valuation: Attractive on Price to Book but Shadowed by Risk

Despite the poor financial results, Easy Trip Planners presents an attractive valuation profile. The stock trades at a Price to Book Value (P/BV) of 2.9, which is discounted relative to its peers’ historical averages. This valuation appeal is partly due to the company’s low debt-to-equity ratio, averaging zero, which reduces financial risk and interest burden.

However, the valuation must be viewed cautiously given the company’s deteriorating earnings and negative returns. Over the past year, the stock has generated a return of -50.57%, significantly underperforming the Sensex, which gained 8.65% over the same period. The five-year and three-year returns are even more stark, with Easy Trip Planners delivering losses of 74.58% and 50.57% respectively, while the Sensex posted gains of 68.52% and 36.79% over those periods.

Financial Trend: Persistent Weakness Despite Some Stability

The financial trend for Easy Trip Planners remains negative, with operating profit shrinking at an annualised rate of -11.87% over the last five years. The company’s latest quarterly results confirm a continuation of this downtrend, with operating profit and PAT both sharply declining. The negative trajectory is further exacerbated by promoter share pledging, which has increased by 15.16% in the last quarter to 26.14% of promoter holdings. This elevated pledge level adds pressure on the stock price, especially in volatile or falling markets.

While the company’s low debt levels provide some cushion, the persistent losses and weak profitability metrics suggest that the financial trend remains a significant concern for investors. The lack of earnings growth and poor returns on equity (ROE at 7.9%) highlight the challenges Easy Trip Planners faces in reversing its fortunes.

Technical Analysis: Shift from Bearish to Mildly Bearish Supports Upgrade

The primary catalyst for the recent upgrade in investment rating is the improvement in technical indicators. The technical trend has shifted from bearish to mildly bearish, signalling a potential stabilisation in the stock’s price movement. Key technical metrics present a mixed but cautiously optimistic picture:

• MACD: Weekly readings are mildly bullish, although monthly signals remain bearish.


• RSI: Weekly RSI shows no clear signal, but monthly RSI is bullish, indicating some upward momentum over the longer term.


• Bollinger Bands: Both weekly and monthly bands remain bearish, suggesting volatility and downward pressure persist.


• Moving Averages: Daily averages continue to be bearish, reflecting short-term weakness.


• KST (Know Sure Thing): Weekly KST is mildly bullish, while monthly KST remains bearish.


• Dow Theory: Weekly trend shows no clear direction, but monthly trend is mildly bearish.


• On-Balance Volume (OBV): No discernible trend on weekly or monthly charts, indicating volume is not confirming price moves.

These mixed signals suggest that while the stock remains under pressure, there are tentative signs of technical support emerging. The upgrade to Sell from Strong Sell reflects this nuanced view, recognising that the stock may be nearing a bottoming phase, though risks remain elevated.

Price and Market Context

At the time of the rating change, Easy Trip Planners was trading at ₹6.96, down 0.71% from the previous close of ₹7.01. The stock’s 52-week high stands at ₹14.90, while the low is ₹6.88, indicating it is currently near its annual bottom. This proximity to the low price level aligns with the technical signals of a potential mild recovery or at least a pause in the downtrend.

Comparatively, the Sensex has shown resilience, with positive returns over multiple time frames, underscoring Easy Trip Planners’ relative underperformance. This divergence highlights the company’s sector-specific and company-specific challenges, which have yet to be fully addressed.

Conclusion: Cautious Optimism Amidst Lingering Risks

The upgrade of Easy Trip Planners Ltd’s investment rating from Strong Sell to Sell reflects a modest improvement in technical indicators, signalling a potential easing of the stock’s downward momentum. However, the company’s fundamental challenges remain significant. Weak financial performance, negative profitability trends, and high promoter share pledging continue to weigh heavily on the stock’s outlook.

Valuation metrics offer some comfort, with the stock trading at a discount to peers and maintaining a low debt profile. Yet, the persistent underperformance relative to the Sensex and the travel services sector suggests that investors should remain cautious. The technical upgrade may indicate a near-term stabilisation, but a full recovery will depend on a turnaround in financial results and improved operational execution.

Investors should closely monitor upcoming quarterly results and any strategic initiatives by management aimed at reversing the negative trends. Until then, the Sell rating reflects a balanced view that recognises both the risks and the tentative signs of technical support.

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