Easy Trip Planners Ltd Upgraded to Sell on Technical Improvements Despite Weak Financials

Quality Assessment: Persistent Financial Weakness Clouds Outlook

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 financial quality remains under pressure, with the latest quarterly results for Q2 FY25-26 revealing a steep decline in operating profit by 84.04%. This marks the fifth consecutive quarter of negative results, underscoring a persistent downturn in core profitability.

Over the last five years, operating profit has contracted at an annualised rate of -11.87%, signalling structural challenges in sustaining growth. The latest six-month profit after tax (PAT) stands at ₹19.58 crores, down by 66.44%, while profit before tax excluding other income (PBT less OI) has plunged by 113.8% to a negative ₹2.72 crores compared to the previous four-quarter average. Return on capital employed (ROCE) is at a low 7.90%, reflecting inefficient capital utilisation.

Adding to concerns, promoter share pledging has increased sharply by 15.16% over the last quarter, now constituting 26.14% of promoter holdings. This elevated pledge level often signals financial stress and can exert additional downward pressure on the stock price in volatile markets.

Valuation: Attractive on Price-to-Book but Discounted Amid Weak Returns

Despite the financial setbacks, Easy Trip Planners presents an attractive valuation profile. The stock trades at a price-to-book (P/B) ratio of 2.8, which is below the historical average for its peer group, suggesting a discount relative to sector valuations. The company’s return on equity (ROE) of 7.9% is modest but positive, indicating some shareholder value creation despite the broader challenges.

However, the stock’s performance relative to the benchmark indices has been disappointing. Over the past year, Easy Trip Planners has delivered a total return of -51.4%, significantly underperforming the Sensex, which gained 8.49% over the same period. The three-year return paints an even bleaker picture, with the stock down 73.28% compared to a 37.63% gain in the Sensex. This consistent underperformance highlights the market’s scepticism about the company’s growth prospects and operational turnaround.

Financial Trend: Continued Decline Despite Some Operational Stability

The financial trend for Easy Trip Planners remains negative, with key profitability metrics deteriorating over recent quarters. The operating profit decline of -84.04% in Q2 FY25-26 is a stark indicator of the company’s struggles to generate sustainable earnings. The negative PAT growth of -66.44% over the last six months further emphasises the downward trajectory.

While the company maintains a low average debt-to-equity ratio of zero, indicating minimal leverage risk, this has not translated into improved profitability or growth. The lack of debt may provide some financial flexibility, but the absence of growth catalysts and persistent losses have weighed heavily on investor sentiment.

Moreover, the stock’s returns have been consistently below benchmark indices and sector averages, with a year-to-date return of -7.9% against the Sensex’s -1.74%, and a one-month return of -9.38% compared to the Sensex’s -2.36%. These figures reflect ongoing operational challenges and market scepticism about the company’s turnaround prospects.

Technicals: Key Driver Behind Upgrade to Sell Rating

The primary impetus for the recent upgrade from Strong Sell to Sell stems from a notable improvement in technical indicators. The technical grade shifted from bearish to mildly bearish, signalling a tentative stabilisation in the stock’s price momentum.

On a weekly basis, the Moving Average Convergence Divergence (MACD) indicator has turned mildly bullish, while the monthly MACD remains bearish. The Relative Strength Index (RSI) shows no clear signal weekly but is bullish on the monthly chart, suggesting some underlying strength building over a longer horizon.

Bollinger Bands remain mildly bearish on both weekly and monthly timeframes, indicating continued volatility but with less downward pressure than before. Daily moving averages are still bearish, reflecting short-term caution among traders.

Other technical tools such as the Know Sure Thing (KST) indicator are mildly bullish weekly but bearish monthly, while Dow Theory signals mildly bearish weekly trends and no clear monthly trend. On-Balance Volume (OBV) is mildly bearish weekly with no discernible monthly trend, suggesting volume patterns have yet to confirm a sustained rally.

These mixed but improving technical signals have encouraged analysts to revise the Mojo Score to 31.0, upgrading the Mojo Grade from Strong Sell to Sell as of 3 February 2026. This reflects a cautious optimism that the stock may be forming a base for potential recovery, though significant risks remain.

Market Performance and Price Action

Easy Trip Planners’ current market price stands at ₹6.76, up from the previous close of ₹6.43, with intraday highs reaching ₹7.06 and lows of ₹6.45. The stock’s 52-week high is ₹14.32, while the 52-week low is ₹6.11, indicating it is trading near its annual lows.

Short-term price action shows some recovery, with a one-week return of 8.33% outperforming the Sensex’s 2.30% gain. However, this is offset by negative returns over longer periods, including a one-month return of -9.38% and a year-to-date return of -7.9%. The stark underperformance over one and three years highlights the company’s ongoing challenges in regaining investor confidence.

Conclusion: Upgrade Reflects Technical Improvement, Not Fundamental Recovery

The upgrade of Easy Trip Planners Ltd’s investment rating from Strong Sell to Sell is primarily driven by improved technical indicators suggesting a potential bottoming out of the stock price. However, the company’s fundamental financial performance remains weak, with significant declines in profitability, persistent negative earnings, and underwhelming returns relative to benchmarks.

Valuation metrics indicate the stock is trading at a discount, but this is largely reflective of the market’s cautious stance given the company’s poor long-term growth and elevated promoter pledge levels. Investors should remain wary of the risks posed by ongoing financial deterioration and the uncertain recovery trajectory in the travel services sector.

While the technical signals offer some hope for stabilisation, the overall investment thesis remains cautious, with the Sell rating reflecting a balance between emerging positive momentum and entrenched fundamental weaknesses.

Unlock special upgrade rates for a limited period. Start Saving Now →