Wise Travel India (WTI Cabs)- Driving the growth wisely?

[richbandit]

WISE TRAVEL INDIA- WTI CABS

INDUSTRY TRENDS:

The B2B Corporate Mobility Industry can be broken into two segments:

a) Employee Transportation Services (ETS): Employee Transportation Services is a structured corporate mobility system aimed at facilitating convenient and efficient commuting for employees between their residences and workplaces. Organized: Unorganized market share at 15:85 (Calendar Year 2023).

The employee transportation service market, is estimated to have generated a revenue of ₹503.5 billion ($6.1 billion) as of CY2023. It is expected to grow at a CAGR of 11.8% to reach ₹1097.6 billion ($13.2 billion) revenue in CY2030 inline with steady development of corporates such as IT, Global Capability Centers (GCC) segments etc in India. (Report by Frost & Sullivan)

b) Corporate Car Rental (CCR): Corporate car rental services cater to the needs of corporate clients and their employees, offering professional drivers for transportation purposes such as airport transfers, corporate events, conferences and exhibitions, outstation trips and hourly rentals.

Organized: Unorganized market share at 25:75 (Calendar Year 2023). More and more corporate are moving to organized players for advantages of single vendor for across India, transparent billing, better pricing, standardized and reliable services across the country. Organized segment of CCR is expected to increase to more than 30% by CY2030.

The corporate car rental market, estimated at ₹392.4 billion ($4.7 billion) in CY2023, experiences healthy growth fueled by factors like increasing business travel needs, focus on employee well-being, and demand for premium services. It is estimated to grow at a CAGR of 9.3% to reach annual revenue of ₹731.8 billion ($8.8 billion) by CY2030. (Report by Frost & Sullivan)

Consolidation in the Industry ahead?- Over the next few years, as players reach out to more cities and competition intensifies further, leaving low headroom from growth, consolidation is likely to happen with smaller players getting acquired by the larger ones.

Growth at the overall Industry level can be attributed to:

1. Transition from remote work to in-office work
2. Focus on employee satisfaction and safety to improve retention rates
3. Rising corporate air travel and increase in number of airports
4. Expansion of office space, new corporates entering India and hiring, particularly in the IT and ITES sectors.

COMPANY OVERVIEW

The company was incorporated in April 22, 2009 as Wise Travel India Private Limited by Mr. Ashok Vashist, Ms. Hema Bisht and Mr. Vivek Laroia. The company took on the responsibility of managing the entire personal ground transportation for the XIX Commonwealth Games in New Delhi in 2010.

From 2013 to 2014, WTI broadened its horizons, bolstering its car rental fleet to over 2500 cabs. This growth was complemented with the strategic acquisition of Wyncabs and Smart Ride, a prominent coach rental company, thereby serving an even broader clientele. In 2021, WTI ventured into tier 2, 3, and 4 cities, ensuring that premium mobility services.

Currently the company has a pan-India presence, more than 200 cities has over 550 customers with 8000+ vehicles with counter presence in 17 airports across the country. As on June 2024- company had 800 employees.

The fleet is structured in an asset light model with over 300 vehicles owned and 7000+ vendor fleet vehicles- leased by them from various Vendors on Pan India basis.

SEGMENT WISE BREAKUP:

1. Employee Transportation(B2B):

This is the core business segment of the company wherein they service the employee transportation of corporates from Home to Work and back to home. More focused in tier-1 cities, with pricing models varying based on vehicle type, route distance, and service customization. Common models include per-employee, per-trip, and fixed monthly charges.

Pretty impressive clientele- includes marquee names like Indigo, Vedanta, Amazon, Microsoft, Indus Towers, Panasonic, Honda, Coca Cola and others.

The criticality of Employee Transportation increases for certain sectors because of odd shift timings and importance of on time arrivals of their employees. ETS is a direct beneficiary of large global and Indian companies setting up their new office presence in India inline with the boost given by Indian government under the “Make in India” theme.

Key Demand Sectors include:

• IT BPM- includes Captives of other sectors like BFSI, Telecom and Consulting
• Aviation
• Banks
• MNCs and other large corporates

There’s another aspect to the segment as Employee transportation services play a crucial role in enhancing the overall experience, convenience and satisfaction of workforce. An efficient and safe services is essential to ensure lower employees’ attrition.

WTI derives almost 35-40 percent of their revenues from this segment and their large fleets allows them to serve large corporates nationwide and have a PAN India presence.

2. Car Rental Division (CRD- B2B):

In this segment, they cater to corporate clients and their employee transport requirements other than the basic home to work (and back to home) service. Providing chauffeur driven cabs to help them to transport employees, guests or VIPs to airport, conferences, a sales call, intra city travel, hotel pickup & drop, outstation or for their long term or daily car rentals needs.

A very small portion of CRD is also B2C (49 lakhs in FY23) but that’s still largely B2B (62 Crores in FY23). The company is not much inclined towards B2C due to higher cost of customer acquisition.

3. Airport Counters: (B2B) They have a counter presence across 17 large airports. By placing their counters after the security hold areas, the company ensures convenient access for travellers, allowing them to avail their services. They’ve presence in 17 airports a few of which includes:

1. Delhi- Indra Gandhi International Airport (3 Counters at T1, T2, T3)
2. Bengaluru- Kempegowda International Airport
3. Guwahati- Lokpriya Gopinath Bordoloi International Airport
4. Varanasi- Lal Bahadur Shastri International Airport
5. Gwalior- Rajmata Vijaya Raje Scindia Airport
6. Bhopal- Raja Bhoj Airport
7. Amritsar- Sri Guru Ram Das Ji International Airport
8. Madhurapudi, Andhra Pradesh- Rajahmundry Airport
9. Visakkhapatnam Airport
10. Jaipur International Airport
11. Maduri International Airport
12. Jabalpur Airport

4. Managed Services(B2B):

The company started this segment in 2015 and in this segment, they’re managing the complete mobility for any organization. It includes their own technology and own fleet. They provide complete bespoke solutions to the companies on the basis of study, demand and solutions required. The company has their our own in house developed system for Fleet Management.

5. Projects(B2G):

Here they cater to government companies as driving at the ports premise need specialized skills. Working with a lot of govt. companies and providing specialized transport services. The receivables in the balance sheet worth 85 Crores as on March 2024 is largely attributed to Projects and CRD segment.

Key services at company level includes:

• Car Rental Services
• Employee Transportation Services
• End-to-End Employee Transport Solutions (MSP)
• Flexible Fixed/Monthly Rental Plans
• Plans
• Convenient Airport Counters
• Fleet Management Services
• Mobility Services for MICE
• Cutting-Edge Mobility Tech Solutions
• Sustainable Mobility
• Project Mobility Solutions
• Strategic Consulting and Advisory on mobility
• Community commute

Dubai Entry: On September 13, 2023 the Company has established a One-Person Company LLC in the Emirate of Dubai, namely, WTI RENT A CAR L.L.C with the objective of providing car rental services. Started in December 2023, they already have 100 vehicles as of June 24, Breakeven expected in next 4-5 months (June Concall). The management believes that the scale in Dubai have to be large to justify higher operations cost.

The revenue split between segments: (H1FY24)

1. ETS(B2B): 36%
2. CRD(B2B): 27%
3. Managed Services(B2B): 17%
4. Projects(B2G): 10%
5. Airport(B2C): 7%

Financial Analysis::

Financials appear impressive overall- They have been able to scale the business quite well from 89 crores in 2022 to 411 Crores in FY24. EBITDA margins crossed 10% in FY24. The company is among the top five organized players in terms of fleet size. The company also has 102 Crores of cash as on April 2024.

The business generated a positive cash flow from operations in 2024 worth 19 Crores. (ROE looks depressed due to recent IPO)

Client Concentration: Fairly diversified client concentration for a small company with Top 10 customers attributing to only 38% revenues.

Management Information:: Based on Mr. Ashok Vashisht’s TV interviews (Only promoter that’s visible in interviews) and Concalls, it appears he has a thorough understanding of the cab industry and has a vision to drive this company to a great scale. The company has recently started doing concalls and the execution history is impressive although limited being a recent IPO.

WTI CABS ASHOK VASHIST INTERVIEW- Targetting 2000 Crore Revenue by FY30?

Competition:

The market is highly fragmented, with many regional players succeeding in smaller areas. In the organized sector, a few large PAN India companies dominate, a few managing substantial fleet.

This data is a as of Feb 2024, now WTI has over 8000 vehicles as per their recent presentation and other players may also have added fleet since then.

Key Triggers:

• The upcoming IPO of Ecos Mobility could lead to a market re-evaluation of listed players like WTI Cabs and Shree OSFM (Ashish Kacholia recently invested).
• The company plans to establish partnerships with leading global car rental brands (as outlined in the June presentation), which could enhance scale and help them expand into more cities across India.
• Projected growth of 30-35% over the next few years, coupled with the addition of a new EV fleets and other optionalities such as International expansion and State Govt business.
• Industry still very fragmented and unorganized- Industry may see some M&A activities going ahead.
• Rise Of India’s Aviation Sector and Increased Airport Traffic: 14 New and Upcoming Airports Including Jewar & Lakshadweep. With the addition of new airports and expansion of existing ones, there will be a surge in airport traffic, including both domestic and international passengers. Increased Airport Connectivity Fuels Demand for Chauffeur Driven Mobility.

. Risks:

1. Highly competitive space with cut throat competition both PAN India basis and with regional players located in every state. Competition includes the likes of Mahindra Logistics, Ecos India Mobility, Carzonrent, Shree OSFM etc.,
2. The inherent nature of industry is such that the pricing power among the players is low.
3. The company doesn’t have long term contracts with most of their customers.
4. Disruption due to change in government regulations(Covid alike) and activities such as economic, political and other prevailing conditions in India.

Management Guidance and Outlook:

1. Aiming to grow at 30-35% per annum on topline and bottomline with sustainable margins.
2. Adding EV fleet of 1000+ going ahead in a phased manner and flexible on it being asset light and owned vehicles. (Added 400+ Vehicles already, will be focusing on Bio-CNG also moving ahead)
3. Small Fish in big pond?: Management believes that the market size and opportunity is large for all the players to grow multifold from current scale. Here’s what the management believes:

4. Also targeting bus services and taking parts in tenders in Delhi, MP, UP- State Government projects.

Valuations and P2P:

WTI is trading at a market cap of 651 Cr (Cash of 102 Crores as on March 2024) a FY24 PE of 28 and P/S of 1.38
vs listed peer Shree OSFM trading at a FY24 PE of 35 and P/S of 2.42
vs Ecos Mobility placed at a 32x FY24 PE and P/S of 3.5 (higher EBITDA margins-15-16% and size-12000 fleet).

Overall the company appears to be the least valued among the peers with a large TAM and good promoter backing with 30-35% growth guidance in coming years. In an Industry where competition is stiff, pricing power is limited and entry barriers are low - operational excellence becomes the cornerstone of success.

The key question is: Can the company manage efficient operations, allocate capital wisely, and scale sustainably from this point forward?

DISCLOSURE:

1. Not invested. Not a SEBI Registered advisor, please do your own due dilligence.
2. Have taken a lot of information from Ecos DRHP and WTI DRHP that includes third party reports.
3. First thread, Please highlight any changes or additional info if required as per forum rules.

References:

1. WTI CABS DRHP
2. ECOS Mobility DRHP
3. WTI June Concall
4. WTI Cabs June Presentation
5. Interview with Nirmal Bang

[Ballaji_Vijayan]

Decent business at a decent valuation. Like you said, Execution is Success here. There is no differentiation other than providing good service. And a big people operations. Growing 30-35% itself is ambitious because of hiring requirements. So, Scaling business is not easy and brings more risk.

Comparatively looks good but I am struggling to see why to invest unless they are trading extremely cheap which is not the case here.

[Rohit_Sukhija]

WTI’s affiliate Aaveg Management Services launched a shuttle bus service in Delhi NCR. Based on my personal experience, the service is of good quality. It’s more affordable than Uber Shuttle and Early Shuttle.

[ChiragD]

Studying this company currently.

What I like:

1. Employee transportation is an area where corporates struggle. There are 100s of players at every office location, but they fail to meet a lot of daily base goals like cabs plying on time
2. Like Peter Lynch said, never ignore what’s going on near you. I dont come back home without spotting a WTi cab in Delhi NCR
3. Their airport counter business has already reached 14cr in a few years. That’s B2C business, although with a slightly higher operational cost and fierce competition

What I don’t like:

1. Competition. Having a company like this is every budding driver’s big dream. I have seen a few going on to start a small 2/3 cab service of their own. And since most big corporates outsource employee transportation, they don’t care who their providers are
2. Their operational costs have a high rentals which they need to pay for using cabs. I understand this is an asset light way, but it certainly eats into margins
3. Talking of margins, the company is at their peak margins. I dont really like companies who can’t expand their margins in 3-5 year horizon

Also, I dont really understand this Dubai move. Will continue to track and see how this goes, but to me this looks like a very naive, shady or gaudy move.

[drjkshetty1978]

Did they conduct concall for sep quarter results?

[hakim_yamin]

Any body have idea about sudden price fall, any red flags or just demand supply

[prakhara_Adiga]

They are not going to conduct concall. Here is the reply i got.

[Dharwi_Sharma]

Have anyone been following the company?

[Manishmundada]

just read a concall summary
management intentions are pure
margin not expanded vis a vis revenue due to capex Going on
debtor days has been increased due to non msme classification which i find False - As there is a lot of competition hence no pricing power
given a guidance of margin expansion next year
disc - not invested - watching as a business has a vast competition

[Vaibhavagarwal07]

Also just to add, company is not converting profits into cash.

[Prathamesh_Adhikari]

I recently invested at 142
I was actually trying to figure out why AK invested in Shree OFSM and then I realised WTI is a much better business than Shree OFSM, mainly because I liked the WTI promoter much better than OFSM.
Last year and this year PAT is ~ 20 cr but FY25 is depressed because of Depreciation of ~20cr
Going forward I dont think there should be a challenge to grow with >25% revenue for next 2-3 years as the GCC- Office Transportation story is strong as well as they started Car Rental business in Dubai.

Risk -
Cash flow conversion issue
Promoter raising debt to buy new cars while IPO money is in FD

[Prathamesh_Adhikari]

This year, they did round about 40 Cr NOPAT and a 40 Cr of Owner Earning, if I separate the 100-110 capex aside for Dubai and Uber Black. if we take this 40 Cr as a stable case, without any growth. it is available at a ~400 Cr mcap; at a multiple of 10. Any increase of 15-20% profits will give a valuation of 2-3X from here.

Risk remains the same of Cash Flow Conversion and any slowdown in consumption etc

[Prathamesh_Adhikari]

Good results. No concall and investor presentation.

[Rahul_Behera]

I’m not sure how come posting a screenshot of company’s google review was inappropriate.

@adminph2

[satishwe]

@Rahul_Behera Your post was flagged by community as the images were not clearly visible.

[Prathamesh_Adhikari]

Managed to get some numbers from Investor Relations on segmental split, they gave % contribution and I converted to absolute Rs Cr for H1Fy26 and FY25. I have projected FY26 just by doubling the H1 revenue, so take it with a pinch of salt

Revenue (rs Cr)	H1 2026	FY25	FY26Projected	26 Vs 25
Corporate Travel	76	143	152	6%
Employees Transportation	114	143	228	60%
MAAS	72	148	144	-3%
Airport	19	22	38	73%
Long Term Rentals	57	60	114	89%
Leasing	-	5	-
Fleet Pro	34	16	68	315%
Dubai	11	11	23	108%
Total Revenue	383.8	549	767.6	40%

Huge growth everywhere.

also here the Segmental EBIT picture (as is from investor relations)

[bajji_s]

thanks any further information on their receivables and cash flow from operations, last and this year they seems to have invested a lot and that will surely increase growth but need to see their receivables, they have high hopes on the UAE business as well.

[Prathamesh_Adhikari]

yes. the cash flow answer was this.

so 13 Cr CFO against 27 Cr PAT = ~50% conversion

[richbandit]

Is there something that the street is missing??
A lot has happened in the business since it got listed. It’s been a struggle in terms of delivering upto the expectations that were initially built into the company but I believe that the management knows what they’re trying to achieve here.

The IPO was not the point when they shifted to asset heavy plans on Uber Black side infact the raise was just for working capital requirements which has been a bit stretched. The company has gone from being largely asset light to a lot of new focus on asset heavy portions. The pivot to Uber Black came as an interesting yet not so interesting decision from the management. Higher upfront costs, gradual ramp up of inducted vehicles, WDV method of depreciating vehicles in 3 years took a heavy toll on financials.

Just for comparison purposes- Ecos Mobility(largest pure play listed player rn) did almost similar revenues and OPM in H1FY26 as WTI Cabs. The strong differentiation in model choosen for growth by WTI vs ECOS becomes reasonably apparently on the post OPM headers in their income statement. Depreciation and Interest costs eat up major chunk of the operating profit and you’re left with almost 1/2th PAT of what ECOS delivered in H1FY26.

I have been following the business as a keen learner since IPO- Lots of sane voices tell you it’s a very commoditized, cut throat competition industry with very few entry barriers. Rightly so, A lot of it is actually true but the numbers indicate that the story might just be beginning for organized players.

There’s a bit of economics in managing a fleet of 13-15k cabs, a lot of operational efficiency, significant micro management, daily hassle, undercutting of prices every time RFQ floats by new players, retaining drivers and providing customer satisfaction in an Industry where only few deliever.

What else happened?- Company entered Dubai- a completely different market where self drive rules, realisations and margins are a lot better, economics makes a bit of sense and an economy where scaling up can do wonders as per management. Mr. Ashok believes self drive will drive the next leg of growth in India also for cab service providers over medium to long term.

Uber Black is a completely different model, Premium service Hyryders running on street and terms include a minimum business guarantee from Uber. Asset heavy, drivers in payroll, high upfront costs, high operational skillset requirements- What’s lucrative?- Scale and business predictability maybe. Unlisted peer- Everest Fleet manages 18500+ vehicles (Exclusive: Uber India to invest another $20 Mn in Everest Fleet)

Presently, as per my understanding WTI should close FY26 at around 900-1000 cabs with Uber Black.(WTi Cabs becomes the largest Uber Black fleet operator in India - The Economic Times) They seem to have gone ahead with the auto loans vs utilising cash on books for this venture. The business should do 7-9 pct PBT margins as per my workings (Everest does similar is what I understand). Dubai again should be 10-12 pct pat margins business.

Depreciation goes down each year, Interest cost hopefully goes down as cash flows start to come in, sales growth (gaining market share) doesn’t seem to be a problem for them at the moment and they likely will close FY26 at 800+ crores at 10-11 pct OPM. I expect it to become the leader in listed space next year or in 2027. Expecting margins to improve as Uber Black scales and Dubai Operations become significant. The current pat margins of 3.5-4 pct are bound to grow as these things play out, Depreciation is a non cash element and the company gets the cash flows anyways.

Overall, a potential leader with global expansion plans (on it already) available at a market cap of 330 crores(30-32 Crores PAT FY26) with strong levers to grow its scale and margins gradually over next few years. Definitely looks interesting story to keep an eye on!!

Disc: Not Invested, tracking closely!!

[Prathamesh_Adhikari]

Thanks for the write-up. you are margin assumptions are bang on for the FY27 picture.
In this cutthroat industry, finally, only large players with significant cash on the books will survive over the next 5-7 years. Hopefully, WTI sticks to only cabs and not EV buses / Intercity Buses under the Mobility Label like Shree OFSM did.