Online travel aggregator ixigo saw its AI agent TARA resolve 81% of voice queries and more than 92% of text queries end-to-end (without human intervention) in Q1 FY27, while handling over 57,000 customer interactions every day, Group co-CEO Rajnish Kumar said. This comes amid reports that ixigo is planning to allow users to pay for travel bookings by voice.
Let’s take a closer look at what else the management said in the earnings release.
1. AI and Hotels remain investment priorities.
ixigo’s Group CFO Saurabh Devendra Singh said the company deliberately chose to reinvest operating leverage into building a scaled hotel business, expanding AI capabilities, and strengthening its brand rather than maximising short-term profitability.
“This quarter, there were three primary areas of investment. The first is Hotels. Second is technology and AI, particularly on our next-generation AI platform ixigo NEXT. Then there are brand and marketing investments,” he said.
Kumar said AI investments include engineering talent, AI infrastructure, model usage, and training the company’s own Small Language Models for ixigo NEXT.
“The costs of these AI initiatives naturally show up before
the productivity benefits do, and I expect that we will see tech costs normalise within the next few quarters,” Kumar added.
Founder and Group CEO Aloke Bajpai said the company aims to remain the fastest-growing OTA across categories, so it is prioritising platform building over margin expansion.
“Our view is that we are still in a phase where the returns on incremental investment are exceptionally attractive. It is slightly premature for us to optimise only for profitability, since we need to establish our market share in categories such as hotels, as well as balance growth and profits in buses and flights,” he said.
2. ixigo’s Bus business continues to drive growth.
ixgo’s Bus business, AbhiBus, has become the company’s largest vertical by contribution margin. The management attributed this to structural tailwinds, including highway infrastructure development and higher airfares pushing travellers to road transport.
However, the company emphasised its market share gains, which are driven by product innovation. Kumar highlighted the launch of ‘busGDS.ai,’ an AI-first operating system for bus operators, and “Student Pass,” an exclusive membership program that has already registered over 20,000 students. Furthermore, the “Roadside Assistance” program, which provides replacement taxis within an hour in case of breakdowns, is now available across 20 states, covering approximately 95% of bookings.
“We are now able to sell more bus inventory within our own ecosystem by solving real customer and operator problems,” Bajpai explained, adding that the company is seeing broad-based growth across 17 states, including Delhi, Odisha, and West Bengal.
2. Focus in the train business is on preserving margins amid policy headwinds.
In contrast to the bus segment, the company’s Train business is currently in a “preserve margins” mode. The management noted that the recent volume pressure is “category-wide,” driven by changes to Tatkal access for OTAs and lower waitlist inventory.
Rather than chasing growth, the company is focusing on consolidating its position. Bajpai highlighted that ixigo’s share of the OTA train market has increased from approximately 60% a few quarters ago to 63% this quarter. “We have therefore continued to consolidate our position even as the overall opportunity pool has been constrained,” he said.
The company is hopeful for a recovery contingent on policy changes, such as the rollout of OTP-based authentication flows for OTAs, but is planning the business without assuming immediate relief.
3. Higher airfares create near-term challenges in the flight business.
The management acknowledged that Q1 FY27 was a difficult quarter for the aviation market, characterised by “some of the highest average fares in our history.” The higher prices were driven by the Iran conflict and its ensuing impact on oil prices.
“Industry passenger growth was negligible in the domestic market, while the international market saw a decline post the Iran conflict. The near-term environment remains volatile,” said Bajpai.
He said that periods of sharp fare inflation disproportionately affect ixigo’s flight business.
“For new-to-flying users, particularly those upgrading from the NBU funnel on trains or buses, a widening price gap between air travel and ground transportation modes can cause customers to reconsider their decision. The impact is more pronounced among Tier 2 and Tier 3 travellers than among established Tier 1 flight bookers, particularly because some capacity reductions have also occurred on routes serving these markets. As a result, upgrading to flights becomes less viable, and this growth channel can be affected more sharply than the overall aviation market,” he said.
4. Contracts with PhonePe for flights and buses weren’t renewed.
The management also provided clarity on the company’s distribution strategy, specifically regarding its partnership with PhonePe. While ixigo continues to power train bookings for PhonePe, the contracts for flights and buses were not renewed after their completion in June 2026. Aloke Bajpai clarified that this was a commercial decision based on a framework of incremental customers and unit economics.
ixigo’s Group CFO added that all third-party distribution partnerships combined—including PhonePe, ChatGPT, Uber, and CRED—represent only a “single-digit percentage of our overall GTV,” minimising any potential impact on the company’s growth trajectory.
5. Hotels emerge as the next growth engine.
Hotels remained ixigo’s fastest-growing business for the second consecutive quarter. In Q1 FY27, the company put half a million guests across its hotel network. The company now has direct partnerships with over 10,000 hotels across 700 towns.
The company is also onboarding several thousand properties every quarter through HELLO, its AI-based hotel platform, and driving higher bookings across them.
The acquisition of a 54.66% stake in Brevistay is expected to accelerate this strategy by strengthening the hotel supply network and flexible stay offerings.
However, the aggressive investment in the Hotels category also took a toll on the bottom line. In Q1 FY27, the contribution margin of ixigo’s “Other” line of business, which includes Hotels, slipped to a loss of Rs 3.1 crore from a profit of Rs 1.9 crore in the same quarter last year.
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