YATRA - YATRA ONLINE LIMITED Share Price

In the earnings call for Q4 and FY '25, management provided an optimistic outlook, highlighting several key forward-looking points. For FY '25, Yatra Online reported a remarkable annual revenue of INR 7,914 million, reflecting an 87% year-over-year increase. Notably, Q4 FY '25 was marked as the most profitable quarter in the company's history. The EBITDA for the year surged by 105%, and Profit After Tax (PAT) rose by a remarkable 912% to INR 366 million.

Looking ahead to FY '26, Yatra introduced preliminary guidance predicting a growth of 20% in revenue less service costs and a robust 30% growth in EBITDA. This growth is expected to be driven by three main pillars: expansion in corporate travel, scaling of the MICE segment, and capitalizing on synergies from the Globe acquisition.

Management noted the potential of the corporate travel market in India to grow from INR 42 billion to INR 80 billion by 2033, as well as the MICE market projected to increase from INR 3.3 billion in 2023 to INR 10.5 billion by 2030, representing an 18% CAGR. They were particularly enthusiastic about the MICE business, which saw significant revenue growth and margin expansion.

In terms of client acquisition, for FY '25, Yatra secured 148 new corporate clients contributing INR 7.5 billion in expected annual business. The company emphasized strengthening its sales pipeline, targeting high-growth sectors which has led to quadrupled sales prospects.

Management also highlighted Yatra's progress in technology integration, including the launch of their AI-powered tools and the new distribution capability (NDC) integration, enhancing their corporate travel solutions.

Overall, the management's message underscored confidence in continued profitability and growth, backed by strategic initiatives and a strong operational framework.

1. Question: "So, if I look back at full year FY '25, your air ticketing revenue is actually up 7% and the volume is down 24%. What did you guys do which will make this happen and is this sustainable?"
Answer: "We've shifted our focus towards corporate business, replacing lower volume B2C bookings with high-value corporate ones. The margins are significantly higher in corporate travel, which explains the improved gross bookings and earnings despite lower volumes. This strategy aligns with our two-year goal of increasing corporate revenue; I expect this trend to continue."

2. Question: "How much during the quarter is Globe contributing to your revenue, out of the total revenue?"
Answer: "We estimate that Globe's contribution to our revenue will be around 10% on an annualized basis. While we don't break this out quarterly, its inorganic growth has positively impacted our overall revenue, enhancing our competitive edge in the market."

3. Question: "So how do we plan to manage the working capital which gets associated to it with a higher number of working capital days on the B2B side?"
Answer: "We're leveraging banking services for factoring and working closely with corporate clients to shift bookings from credit to corporate credit card platforms. More than 30% of our bookings are now on credit card platforms, which helps reduce working capital needs. We've sufficient unused banking facilities to double our corporate business, and we expect to be free cash flow positive this year."

4. Question: "Can we assume that we are assuming a similar kind of volume increase in next year as well or this will be a function of higher realization?"
Answer: "We expect volume growth to be around 15%. The growth will be driven by a mix of higher yielding hotel bookings and increased corporate travel. While we see potential in our pricing structure, the significant profitability will stem from expanding more into higher-margin segments like hotels."

5. Question: "Have you already started monetizing RECAP?"
Answer: "Yes, we've just begun monetizing RECAP. Initially, we offered it as a complementary service to a few customers, but in recent implementations, we've started to charge for it. We are adopting different monetization models, mainly focusing on a per-user basis."

6. Question: "What is our market share in the corporate travel?"
Answer: "In the managed corporate travel sector, we're addressing about 1,150 to 1,200 out of approximately 13,000 target companies, giving us about a 9% market share in terms of customers. In terms of spend levels, we're likely capturing around 11% to 12% of the market."

7. Question: "We have added 35 new corporate clients. Are we seeing heightened competitive intensity while adding new clients?"
Answer: "Despite the competitive landscape, we continue to perform well in acquiring new corporate clients. Our comprehensive corporate travel solution is one of the most advanced in the market, and we've strengthened our sales team to drive further growth regardless of competition."

8. Question: "When are we expecting the synergies from the Globe integration to play out?"
Answer: "These synergies are expected to manifest within the current quarter. We estimate that these will add around INR1 to 1.5 crores to our quarterly profit due to reduced operational costs and expanded client offerings."

9. Question: "What type of revenue growth are you projecting for FY '26?"
Answer: "For FY '26, we're guiding a growth of 20% in our revenue less service costs and 30% in EBITDA. This will be supported by our corporate travel expansion, MICE scaling, and full realization of synergies from Globe."

10. Question: "What's our discount policy in B2C part of the business?"
Answer: "Currently, our discounts hover between 3.5% to 4.5% based on competitive pressures. We're actively optimizing our discount strategy to balance competitiveness while maintaining margins on our fare structures."