Yatra Online stock trading below its IPO price but Investec sees 51% upside; here's why

livemint.com:

₹135.9 apiece, which was 4.3% lower than the IPO price of ₹142 per share. At current levels, the stock is still trading 1.40% below its issue price. However, according to recent projections from brokerage house Investec, there may be a potential reversal of this trend going forward, driven by the company's increasing market share.

In its latest report, the brokerage has initiated coverage on the stock with a 'buy' rating and set a target price of ₹215 per share, indicating an upside of 51.40%. Also Read: Suzlon, Reliance Power to VI: These 5 penny stocks beat Nifty 50 return in 2023 Yatra Online is India’s leading corporate travel services provider in terms of the number of corporate clients and the third largest online travel company in the country. It is a one-stop destination for travel information, pricing, bookings, and more.

Yatra lost market share in B2C over time due to funding constraints, but it has built the largest enterprise online travel agency (OTA) business. The enterprise OTA business is three times more profitable than the consumer business and is in its early phase of adoption by the industry, said Investec. Also Read: Nifty 50 may touch 24,200 next year led by FPI inflows, says ICICI Direct According to the brokerage, Yatra is 3x larger than MakeMyTrip in the enterprise business, which has a TAM of ₹1,004 billion.

This, as per the brokerage, implies a potential revenue exceeding ₹50 billion for OTAs over time. The brokerage pointed out that Yatra is now well-placed after the recent IPO fundraising of around ₹6,000 million. This positions Yatra to invest in technology and supplier agreements that will help boost growth and margins.