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RateGain: Who decided what your hotel room costs?

Small cap Travel technology 15 September 2026 · 45 min read

What the company does

RateGain sells software and advertising to hotels, airlines, car rental firms, travel websites and tourism boards. Its tools show what rivals charge, push a hotel's rates and rooms to the sites that sell them, and, since it bought Sojern in November 2025, buy the ads that bring a traveller to book on the hotel's own site. In FY26 it made ₹1,823.6 crore of revenue and ₹194.4 crore of profit after tax. It has no factory: 1 office in India and 11 abroad, 1,255 staff, of whom 713 are on the Indian parent's payroll. It listed on NSE and BSE in December 2021 at ₹425 a share. The promoter is Bhanu Chopra, who started the business in 2004; he and his family hold 48.78%.

Summary
  1. A hotel pricing software firm that is now mostly an ad business. Bhanu Chopra started RateGain in 2004 with a tool that compared hotel prices. Since it bought Sojern, a US travel ad company, for USD 250 million, ad and marketing work has made more than 81% of revenue in the June 2026 quarter.
  2. Most of the growth was bought, and profit fell. In FY26 Sojern brought ₹666 crore of the ₹747 crore rise in revenue, the older businesses grew about 7.5%, and profit after tax fell 7%, to ₹194.4 crore. Adjusted EBITDA, the operating profit figure RateGain puts first, leaves out ₹21.9 crore paid to Sojern staff in the June 2026 quarter, part of a cost of ₹80 to 90 crore a year, until the December 2028 quarter.
  3. It is now paid per result, and keeps less of each sale. In the June 2026 quarter, 79.1% of revenue was paid per transaction and 7.3% by subscription. Gross margin, the share of revenue left after direct costs, was 78.6% at the IPO and 75.0% in FY25 but 69.2% in the June 2026 quarter.
  4. The business turns its profit into cash, and debt is falling. In FY26 the cash left after paying for equipment, called free cash flow, was ₹229.6 crore, 118% of profit. Net debt, loans less cash, fell from ₹765.5 crore in December 2025 to ₹615.4 crore in June 2026.
  5. Much of the money is not yet collected, and the books lean on goodwill. At the end of FY26, customers owed RateGain ₹471.4 crore and ₹230.1 crore more was earned but not yet billed, together 140 days of FY26 revenue. Goodwill, the premium paid for businesses over their net assets, is 79% of equity, and equity less goodwill and intangibles is negative.
  6. Sojern's own numbers are not shown, and the finance chief keeps changing. Asked for Sojern's revenue after ad costs, the CFO at the time said: "We will avoid reporting those kind of numbers." The long-serving CFO left in May 2025, his successor quit a year later for personal reasons, and a new CFO was named on 28 September.

Why this company, why now

In FY26 RateGain made ₹1,823.6 crore of revenue, up 69.4%, but profit after tax fell 7%, to ₹194.4 crore. It began the year with ₹1,267 crore of cash and investments and ended it with ₹722 crore of net debt. In the June 2026 quarter revenue was ₹785 crore, up 187.6%, and the share price has swung with the story: it closed at ₹438.15 on 30 March 2026 and ₹990.05 on 21 August 2026, 2.3 times higher in under 5 months.

The market reads this as a software company that doubled in size and is growing at 187.6% a year. The filings show a company whose growth was bought with its savings and a loan, whose profit fell in the year revenue jumped most, and whose biggest business, Sojern, reports no numbers of its own. Most of its money now comes from buying ads for hotels and tourism boards, and it is paid when those ads bring in bookings. The At a glance card above has today's price, market value and P/E. The questions are whether an ad business deserves the price of a software business, and whether the money owed by customers turns into cash.

History

Bhanu Chopra holds a business degree from Indiana University and began his career at Deloitte in 1998. He began operations in 2004 with a tool that compared hotel prices. Sabre, one of the systems travel agents book through, has been a customer since 2003, by the prospectus's own account the oldest relationship. The listed company was incorporated on 16 November 2012 as Ridaan Real Estate Private Limited; the business moved into it under a High Court demerger scheme in 2014.

10 years ago RateGain was a private, debt-free Indian software firm renting rate-comparison tools to hotels. Today it is a listed group of 17 companies, 59% of whose revenue comes from the United States, most of it from buying ads, with a dollar loan on the balance sheet and its first full year of consolidated Sojern numbers still to come.

Value chain

Book the same hotel room for the same Friday on 3 websites and you may well get 3 prices. Someone chose each one. At most hotels that is the revenue manager, who looks at what nearby hotels charge, picks a rate for the night, sends it to every site that sells the room, and then checks that nobody sells it cheaper than the hotel does. RateGain sells a tool for nearly every one of those jobs, and now also buys the ads that bring the guest back to the hotel's own site.

How a hotel room gets priced, sold and paid for through RateGain

9 steps, read top to bottom, from the traveller's search to the customer's renewal. The shaded names are RateGain's own steps; the rest belong to the hotel, the traveller and the lenders.

How a hotel room gets priced, sold and paid for through RateGain

RateGain annual report FY26, investor presentations, call transcripts and the Sojern loan filings · FY26 and the June 2026 quarter

Who sets the rules. The online travel agencies and the global distribution systems. Online travel agencies (OTAs) charge hotels "15% to 30% of each booking", RateGain's own website says, and when an OTA undercuts the hotel's own site: "When OTA wins, hotels lose twice. A cheaper third-party rate does more than steal the direct booking. The hotel also pays commission on revenue it could have captured directly." Google, Meta and the metasearch sites set the price of the ads Sojern buys. RateGain sets none of these prices; it sells the hotel a way to live with them.

Who does the work. RateGain's own steps are the shaded ones in the graphic: it collects prices from more than 1,100 sources, pushes rates to more than 400 sites for independent hotels and to the GDSs for chains, and, through Sojern, buys and places the ads. The hotel still sets the rate. The traveller still chooses where to book.

Who pays. The hotel, the airline, the tourism board or the travel site, in 3 ways: a yearly subscription for data, a fee per booking for distribution, and, for ads, 15% of the booking after the guest has stayed, a price per thousand ad views or a share of the ad budget. In the June 2026 quarter, 79.1% of revenue was paid per transaction.

Who holds the power. The OTAs and the ad platforms, which sit on both sides of RateGain's customers. Within RateGain's niche, the power has moved towards it in one place: the Sojern deal removed its main rival for tourism boards' budgets, and by August 2026 management said it needed to discount much less and could hold its price.

Could the customer do this in-house? The big chains could, and some have built their own connectivity. In November 2025 an analyst said revenue managers at Accor, Hilton and Marriott reported chains moving to their own software; Bhanu Chopra replied that most big chains had moved the other way, to third-party reservation systems that connect through RateGain. A small hotel cannot build any of it, which is why Sojern's more than 13,000 customers were the prize.

Products and segments

RateGain reports 1 operating segment, so the profit of each business cannot be seen. Revenue can, in 3 parts.

DaaS, data as a service. The original RateGain. Navigator checks "over 1,100 data sources", more than 800 OTAs among them, compares like rooms, and tells a revenue manager whether the hotel is priced above or below its rivals. Parity+ catches any site selling a hotel's rooms for less than the hotel's own website, with real test bookings, screenshots and vouchers as proof. IHG is a customer. AirGain does the same job for more than 300 airlines, and Rev-AI for car rental firms. DaaS made ₹368.0 crore in FY26, 20.2% of revenue and grew 7.8%, picking up to 22.7% in the June 2026 quarter.

Distribution. A hotel that has set its price must get it, and its free rooms, onto every site that sells them. UNO, for independent and mid-size hotels, updates rates and rooms on more than 400 sites from one screen. Enterprise Connectivity, for large chains, links them to OTAs and to the global distribution systems (GDSs) that travel agents book through; RateGain's website says 2 out of every 5 global GDS hotel bookings pass through it. It handled 31.22 million bookings in FY19, before Covid, and 9.02 million in FY21. Distribution made ₹195.6 crore in FY26, 10.7% of revenue and shrank 12.4%.

MarTech, marketing technology. Now mostly Sojern: ₹1,260.0 crore in FY26, 69.1% of revenue, and more than 81% in the June 2026 quarter. For small and mid-size hotels, Sojern runs ads on search engines, travel comparison sites, social media, email and websites, and pays for them itself, at a published price of "15% commission, only after a guest books and stays." Bigger hotel brands pay per thousand people who see an ad, or a share of their ad budget. Tourism boards club together with local hotels and attractions for joint campaigns. SoHo, the former BCV, runs hotels' social media.

Which earns the margin is not disclosed. The signs point to DaaS: it is sold by subscription, its costs are servers and staff, and the company's gross margin fell from 75.0% in FY25 to 69.2% as the ad business grew. Management is pushing MarTech, where it put USD 250 million, and the AI tools in Distribution, where revenue is shrinking.

How the company makes money

The fee model, by business, as the annual report states it:

Who pays: the hotel, the chain, the airline, the car rental firm, the OTA, the tourism board or the brand. The demand partners, the OTAs and GDSs, also contract with RateGain for connectivity. Which side pays the Distribution fee per booking is not stated in any filing.

Revenue is volume times price times mix, and the mix has turned over. In the 5 months to August 2021, just before the IPO, 48% of revenue came from subscriptions. In FY25, 42.5% of revenue was paid per transaction. By the June 2026 quarter that was 79.1%, with subscription down to 7.3%. The accounts show the same thing: in FY26, ₹1,605 crore of revenue, 88%, was recognised at a point in time, counted when a booking or sale happened rather than spread over a subscription, against 67% 3 years earlier.

Revenue per customer is not a usable series. RateGain counted 3,224 customers at the end of FY25 and 13,410 a year later, which would put revenue per customer at ₹33.4 lakh in FY25 and ₹13.6 lakh in FY26. The fall says only that Sojern's customers are small hotels. The count itself is uneven: the CFO at the time said that in some products a client counts as 1 and in others as 1,000. RateGain stopped publishing annual recurring revenue in August 2025 because, he said, more than half the business was now transactions.

Customers

13,410 customers at 31 March 2026 and 14,158 at 30 June, across more than 160 countries by the website's count. RateGain says it works with 33 of the 40 biggest hotel chains. The customers named in filings and on the site are IHG, Sabre, since 2003, Singapore Airlines, Red Roof and Airbnb, which management calls "a big customer".

Concentration. The 10 largest customer groups bought 20.50% of revenue in FY26, against 29.53% in FY25, the fall being Sojern's thousands of small hotels. No single customer passed 10% of revenue in FY26 or FY25. In FY21, before the IPO, the top 10 were 37.01%. The top 1 and top 5 are not disclosed.

Why they buy here. Scale of data and connections: more than 1,100 price sources, and for ads a pool of more than 320 data partners whose bookings and searches show who is planning a trip. Bhanu Chopra's own account is less flattering: people "usually come to us when they are slightly troubled".

Switching costs and tenure. 7 of the top 10 customers have stayed more than 10 years. Gross revenue retention, the share of last year's revenue that stayed, was 94.9% in FY26, but only for DaaS and Distribution; for the ad business, where a hotel can stop spending any month, there is no figure. Singapore Airlines, a customer since January 2018, renewed for another long-term contract in November 2025.

Bad debts. The allowance for doubtful receivables was ₹9.2 crore in FY26, 0.5% of revenue. ₹27.2 crore of receivables were credit impaired at 31 March 2026. The BRSR reports no consumer complaints on data privacy, advertising or cyber security.

Contracts and tenders (when it applies)

RateGain does not bid for government tenders; it signs private contracts, mostly yearly, some for several years. What the record shows:

Suppliers and inputs

RateGain's inputs are people, servers, data and, since Sojern, advertising space. Of FY26 revenue:

Concentration. The BRSR, which covers only the Indian parent, says 62.31% of inputs by value came from small and medium suppliers in FY26, up from 21.40%. For the group, the dependence that matters is on 2 ad platforms, Google and Meta, which is not quantified.

Imports and currency. Almost every input is bought abroad in dollars, euros or pounds, by the overseas subsidiaries, against revenue in the same currencies. The parent's own exposure is small: a 5% move in the rupee against the dollar changes its profit by ₹4.1 crore.

Pass-through. For a managed campaign, the client's budget passes through RateGain to the ad platform, and RateGain keeps a fee, so a rise in ad prices is the client's problem. For Sojern's commission model, Sojern pays for the ads itself and earns 15% after the stay, so dearer ads come straight out of its margin.

Operations and capacity

RateGain has no plant. It runs from 1 office in India, in Noida, and 11 abroad, with 1,255 staff at 31 March 2026, up from 821 a year earlier, of whom 713 are on the parent's payroll. Its capacity is servers and people, and it spent only ₹4.1 crore on equipment in FY26.

The claims it makes for the platform are of uptime and volume: "99.97% System uptime" and more than 200 billion rate and availability updates a year, though the annual report says 2 billion, 100 times fewer; one of them is wrong, and the website figure is used here with that warning. Expansion plans are of people, not plants: the sales team for Asia and the Middle East grew from 15 to 55 in 2025 and to about 85 by May 2026. No capital commitments are disclosed in the contingent liabilities note. Certificates: none are named in the annual report; the BRSR reports no data breaches.

Geography and currency

By customer location, FY26 revenue was ₹1,072.5 crore from the United States, 58.8%, ₹454.4 crore from Europe, 24.9%, ₹265.5 crore from Asia, the Middle East and Africa, 14.6% and ₹20.3 crore from India, 1.1%. In the June 2026 quarter North America was 66.2%. Of non-current assets, ₹2,302.3 crore sit in the United States and ₹17.3 crore in India: the goodwill and the acquired businesses are American.

Staff by region is not disclosed beyond the parent's 713 in India; Sojern had 366 staff, mostly in the US, at the deal.

The group earns and spends in dollars and reports in rupees, so a weaker rupee lifts reported revenue and profit. The annual report gives a sensitivity only for the parent: a 5% move in the rupee against the dollar changes its profit by ₹4.1 crore. The USD 125 million loan is in dollars, matched to dollar earnings. No hedge is disclosed. For the group the translation effect is large: ₹124.6 crore of other comprehensive income in FY26 came from currency translation.

Cost structure

Of every ₹100 of FY26 revenue:

Fixed against variable. Staff and servers are fixed in the short run. Ads bought for clients, demand partner fees and the commission that Sojern pays only when a guest stays move with revenue. Contract labour is small: ₹22.4 crore, 1.2% of revenue.

Operating leverage. Before Sojern it worked: EBITDA margin rose from 15.0% in FY23 to 21.6% in FY25 as revenue nearly doubled. Sojern reset it to 18.5%, because an ad business carries the cost of the ads.

Interest and tax as a share of what is left. Interest took 12.3% of operating profit after depreciation in FY26, against 0.6% the year before. Tax was 22.9% of profit before tax: the Indian rate is 25.17% and lower rates abroad saved ₹13.0 crore.

Pricing power

Little in DaaS, some in ads, and the filings show both.

Realisation against input costs. No price per unit is published for any product. The one gross margin figure, RateGain's own, fell from 78.6% at the IPO to 75.0% in FY25 and 69.2% in the June 2026 quarter, because ads cost more to deliver than software.

Discounting in the last downturn. In the March 2025 quarter DaaS revenue fell almost 9%, which Tanmaya Das, the CFO at the time, put down to pricing pressure that forced it to reprice some contracts. The DHISCO contract had to be renegotiated.

Who sets the price. For ads, the hotel compares Sojern's 15% after the stay with an OTA's 15% to 30%, which caps what Sojern can charge. For tourism boards, the deal changed the arithmetic: Sojern and Adara were number 1 and number 2 for destination marketing, they had gone head to head, and by August 2026 RateGain needed to discount much less and could hold its price. Bhanu Chopra put it plainly: "when you take out competition that helps as well." Price caps: none. Government is not a customer, except tourism boards, which buy ads.

Seasonality and cyclicality

Quarters. Before Sojern the quarters were flat: in FY26 the first 2 were ₹272.9 crore and ₹295.1 crore. Ad spending is seasonal and skewed to the second half of the year: Sojern's first full quarter, to March 2026, brought revenue of ₹715.6 crore, and the June 2026 quarter ₹785.0 crore, the latter with a one-off USD 2.5 million from FIFA World Cup campaigns. 4 quarters with Sojern are needed before the seasonal shape is clear.

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