Wise Travel

Wise Travel India Limited achieved a significant revenue increase of 37.5% in FY25, growing from INR409 crores to INR554 crores. This growth was accompanied by an expansion of the company's fleet, adding 967 cars to reach a total of 1,350 vehicles. Despite the strong top-line performance, PBT did not grow proportionally due to higher depreciation and finance costs, which management attributed to the gestation period of new projects and investments.

The company launched several new initiatives in FY25, including FleetPro, Dubai operations, and expanded airport services in Chennai, Bangalore, and Port Blair. These new ventures are expected to contribute to future growth. The Dubai operations, in particular, are a B2C business targeting 8-10% net margins with a current utilization rate of 92%. The company also plans to add another 700+ cars in Dubai this year.

While the EBITDA margin was maintained at 11% of revenue, overall margins were impacted by 1% due to the initial gestation phase of new projects. Management expects better PAT margins in the coming year as these projects mature and operational efficiencies improve. Employee benefit expenses saw a higher growth of 44.7% (from INR27.35 crores to INR39.58 crores) compared to revenue growth, which is expected to streamline as the new initiatives scale.

The company experienced an increase in receivable days, from a previous range of 45-60 days to 95 days, primarily due to its transition to serving full-blown corporate clients. Management aims to reduce this to 75-80 days in the coming period through improved processes. The significant capex of over INR100 crores in FY25 was largely for purchasing approximately 1000 cars, including those for a strategic partnership with Uber Black, which provides fixed revenue streams and requires high utilization (320 hours/month).

Wise Travel India Limited is pursuing a global expansion strategy, aiming for a significant international presence within the next three to five years. Following successful initial operations in Dubai, the company has registered in London and plans to commence online platform bookings from India, with a cautious, asset-light approach initially. The strategy involves learning from each market entry to optimize the gestation period for subsequent international expansions across the UAE and potentially the Middle East.

The company's capex for FY25 was over INR100 crores, primarily for the purchase of approximately 1000 cars. This investment included around INR18 crores for Dubai operations. To fund this expansion, the company utilized long-term borrowings of INR38 crores and short-term borrowings of INR13.71 crores. Additionally, INR9 crores were invested in large-cap mutual funds (HDFC Large-Cap, HDFC Nifty 50, SBI BlueChip) to secure bank guarantees for large, long-term government projects.