Flipkart-owned Cleartrip faced a significant financial setback in FY24, reporting a staggering Rs 810 crore loss despite an impressive 98% year-on-year growth in revenue. The company’s operational revenue climbed to Rs 97 crore from Rs 49 crore in FY23, driven by Rs 369 crore in service charges and Rs 240 crore in commissions and incentives. However, aggressive discounting of Rs 525 crore slashed its net revenue, reflecting a challenging strategy to compete in the highly competitive online travel market.
On the cost front, Cleartrip’s expenses surged by 26.7% to Rs 988 crore in FY24 from Rs 780 crore in the previous year. Employee benefits formed the largest share of costs, jumping to Rs 400 crore, including Rs 180 crore in non-cash ESOPs. Excluding ESOPs, salary and wages alone accounted for Rs 220 crore. The company also spent heavily on advertising and marketing (Rs 128 crore), payment gateway charges (Rs 91 crore), and commissions (Rs 70 crore). Additional costs related to outsourcing, IT, and legal expenses further contributed to the financial strain, resulting in an expense-to-earning ratio of Rs 10.1.
In stark contrast, competitors like MakeMyTrip (Rs 6,650 crore revenue and Rs 1,820 crore profit) and EaseMyTrip (Rs 590 crore revenue) showcased robust financial performance. Cleartrip’s negative EBITDA margin of -399% highlights its struggle to achieve financial stability. Despite its substantial revenue growth, Cleartrip’s escalating costs and discount-heavy approach raise questions about its sustainability under Flipkart’s ownership in the fiercely competitive online travel industry.