Disclaimer – Below Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

Rate Gain Travel Technologies

Incorporated in 2004, Rategain Travel Technologies Ltd (RTTL) is a ‘software-as-a–service’ (SaaS) company offering distribution, marketing and revenue maximisation solutions for the hospitality and the travel industry.  It is one of the leading distribution technology companies globally and the largest Software as a Service (SaaS) provider in the travel and hospitality industry in India. 

Business —

It offers a suite of interconnected products that manage the revenue creation value chain for customers by leveraging big-data capabilities and integration with other technology platforms helping hospitality and travel providers acquire more guests, retain them via personalized guest experiences and seek to maximize their margins. The company serves a large and rapidly growing total addressable market.

RTTL’s mission is to be the leading revenue maximization platform for the hospitality and travel industry. It offers an integrated technology platform powered by artificial intelligence enabling customers to increase their revenue through customer acquisition, retention and wallet share expansion. COVID-19 has, however, accelerated the digitization of customer interactions with hospitality and travel companies. These changes are likely to lead to a shift by hospitality and travel companies from in-house solutions to third party software and services. 

RateGain Travel delivers travel and hospitality technology solutions through the SaaS platform through 3 business units; 1. Data as a Service (DaaS), 2. Distribution, and 3. Marketing Technology (MarTech). 

DaaS –It equips suppliers with data and information to increase acquisition and conversion. It offers data under two categories: Market Intelligence, which provides access to pricing and availability data at scale along with analytics to present trends, opportunities and market developments. Dynamic Pricing Recommendations, to serve certain segments with proprietary dynamic pricing technology to help maximize revenue.
For DaaS products, it operates on a subscription model where its customers in the hospitality sector subscribe to DaaS products such as Optima and Parity for a period. Its competitive intelligence products tracked points such as pricing, ratings, rankings, availability, room descriptions, cancellation policy, payment policy, discounting and package inclusions.

Distribution — It provides mission critical distribution including availability, rates, inventory and content connectivity between leading accommodation providers and their demand partners. Distribution also enables delivery of reservations back to hotel systems to ensure smooth operations and accurate reporting by hotels.
In its Distribution segment, it operates RezGain on a subscription basis where customers pay a subscription fee to access the product while DHISCO operates on a transaction model where it generates revenues from bookings done by OTAs and Global Distribution System operators

Martech — Its MarTech offering enhances brand experience to drive guest satisfaction, increase bookings and increases guest loyalty. It also manages social media for luxury travel suppliers allowing them to be responsive to social media engagements 24×7 as well as effectively manage their social media handles and run promotional campaigns

END USER INDUSTRIES — Growing industries in coming decade

• Hotels,
• Airlines,
• Online travel agencies (OTAs),
• Meta-search companies,
• Vacation rentals,
• Package-providers,
• Car rentals,
• Rail,
• Travel management companies,
• Cruises and
• Ferries.

Customers and Competitors–

Six Continents Hotels, Inc., an InterContinental Hotels Group Company, Kessler Collection, a luxury hotel chain, Lemon Tree Hotels Limited and Oyo Hotels and Homes Private Limited. It also counts 1,220 large and mid-size hotel chains, 110 travel partners including airlines, car rental companies and large cruise companies and over 132 distribution partners including OTAs such as GroupOn and distribution companies such as Sabre GLBL Inc., in over 110 countries as its customers

Moats —

Innovative Artificial intelligence-driven industry-relevant SaaS solution provider.

Leading distribution technology companies globally and the largest Software as a Service (SaaS) provider in the travel and hospitality industry in India. 

Any other SaaS players will take time to break into this company niche market segment

Strengths

A large and rapidly growing addressable market opportunity for a vertical-specific platform kind of company

The travel technology segment is backed by industry tailwinds of digitization in the post COVID times. 
Diversified clientele portfolio has helped accelerate growth and in innovating and thus retain both new and existing customers

Diversified esteemed clientele, RTTL served 1,462 customers including eight Global Fortune 500 companies till 30sep2021

Diverse and comprehensive portfolio of revenue maximization and business critical solutions

Strong financial performance with track record of successful acceleration post acquisitions

Innovative Artificial intelligence-driven industry-relevant SaaS solution provider.

Shareholding

Promoter has sufficient skin in game with holding ~67% and other prominent players holding 10% more. Bhanu Chopra is the chairman and managing director (CMD) of RTTL. He founded the company in 2004 and has been leading it since then. He was previously associated with Deloitte and he holds a BS in Business from  Indiana University. 

Some triggers and updates from recent press releases

Recognition in Industry with new customers

Recognition in Industry with best awards

Increase in Tourism Industry in coming years : Projections and online penetration

Getting along with Students for future

Update in H1FY24 results

Showing important traction in customers, employees increase + down in attrition and increasing contracts wins

Promoters skin in game + Other participants like FII , DII are also increasing in recent times, in Public domain, major chunk with Plutus wealth management

AUG24 Update

Rategain Travel (Update)

Company has one of the largest networks
> 2,400 Hotel chains
> 160 OTAs
>700 Travel brands (DMOs, Car rentals including all top, Cruises, Airlines and Package Providers)

Facts
3,279 Customers
Seven of top 10 Customers associated with us for over 10… pic.twitter.com/9jkovyiH5C

— alphaaffairsf2f (@alphaaffairsf2f) August 28, 2024

Cash flows, Sales, Profits all have improved in 2024

Big money from FII and DII have entered

Technicals on 27th Aug24

Risks (tried to see major risks, please do due diligence to understand more on this part)

Badly affected by Covid-19 in terms of financials. May take time to recover fully and if more variants of Covid-19 appear, it can further delay the cause

Intensive competitive sector both at Domestic and International level. Continuous adaption is the key

Another risk could be the change in channel of distribution. Many client if develop their own software may lead to business kill for company

Valuations —

They have to be seen in terms of huge growth runway available with adaption to digital and highly competitive sector.

Once Covid resides, this could be the one company which gets off the block faster. So need to track on acquisitions, mergers, customers, new deals and financial improvement of company balance sheet

Your strategy can be different than mine. Your selection of company might be different than mine. So lets not be a BLIND FOLLOWER

Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

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