YATRA - YATRA ONLINE LIMITED Share Price

During the Q3 FY26 earnings call, management provided a positive outlook for Yatra Online Limited, highlighting several key forward-looking points. The travel industry witnessed a healthy demand, particularly in the air ticketing segment, which saw a 22% year-on-year growth, outpacing an industry growth of about 1%. The company reported that gross bookings in the hotel and packages segment increased by 20% year-on-year, with potential growth up to 30% absent the impact from MICE deferments.

Management emphasized a continued divergence between domestic and international travel trends, forecasting ongoing strength in outbound and long-haul travel. The recent union budget supports this outlook, showing government intent to build a more sustainable ecosystem for travel. Key measures like the rationalization of TCS on overseas packages are expected to lower costs and enhance demand.

On the corporate travel side, the company onboarded 40 new clients, contributing an annual billing potential of INR 2.2 billion. With corporate travel adopting digitization and AI solutions, Yatra aims to leverage this trend for continued growth, expecting high adoption of their new expense management solution, which had already brought in eight new customers in its first quarter of operation.

Management anticipates that, despite the challenges in Q3 due to temporary disruptions in the aviation sector, they remain confident of a bounce-back in Q4. They aim for a revenue growth of 22% on a revenue-less service cost basis, projecting an adjusted EBITDA growth of approximately 37.5%. The company expressed optimism regarding sustained growth driven by corporate travel, operational improvements, and strategic investments in technology.

In summary, management is focused on leveraging emerging trends in international travel, corporate demand digitization, and the implementation of their new solutions to drive future growth, aiming for strong performance in the upcoming quarter and fiscal year.

Here are the major questions and their detailed answers from the Q&A section of the earnings transcript:

1. Anmol Garg: "What has led to the strong growth in the air segment, particularly on the B2C side?" Dhruv Shringi: "We've seen growth across B2C and corporate. On the corporate side, new customer additions are contributing significantly. For B2C, tech innovations have driven demand by enhancing profitable growth, shifting our focus from mere volume to profitability. We are confident in sustaining growth in both segments."

2. Anmol Garg: "Can you elaborate on the tech innovations on the Air side and partnerships for demand generation?" Dhruv Shringi: "Tech innovations include optimizing upsell opportunities and enhancing revenue per customer through add-ons like seat upgrades and tailored fare offerings. Our affiliate partners, particularly in hospitality, are crucial in driving demand, leveraging our strong inventory."

3. Siddhartha Gupta: "What is your strategy for enhancing customer offerings, especially concerning the expense management solution?" Siddhartha Gupta: "We're enhancing our offerings by focusing on areas like expense management, which integrates travel and related expenses, streamlining operations for corporate clients. Our new LLM-based solutions and platforms improve efficiencies and lead to better user experiences across the board."

4. Biplab Debbarma: "Is there any real threat of AI to the OTA business?" Dhruv Shringi: "We view AI as an opportunity, not a threat. It can enhance our service offerings, drive personalized experiences for corporate customers, and optimize operations, particularly in customer service and compliance."

5. Keshav Sureka: "What can you share about the early metrics for the expense management solution?" Dhruv Shringi: "We anticipate adding INR 5-7 crores in FY27 from our expense management solution. Our focus is initially on gaining customer adoption, which has shown promising initial traction."

6. Vivek Desai: "How much of the revenue slip will flow into Q4?" Siddhartha Gupta: "We expect about 70-75% of the slipped business to be realized in Q4, particularly due to deferred group travel arrangements from December."

7. Gunjan Kabra: "What is your strategy to increase hotel bookings from the existing corporate base?" Dhruv Shringi: "We're enhancing our technology to integrate both corporate rates and competitive pricing seamlessly. We've retooled our platform to make hotel bookings easier, encouraging upsell from our corporate customers."

8. Rajit Aggarwal: "Considering the impact of MICE cancellations, how would the revenue growth look without those?" Dhruv Shringi: "If we account for the MICE revenue, we could have reached approximately INR 290 crores, reflecting a year-on-year growth of 22-23%. This would indicate strong underlying demand, particularly in high-margin segments."

9. Naeem Patel: "What are the specifics of your payables, particularly regarding airlines or hotels?" Dhruv Shringi: "Most of our payables are to airlines, particularly those under the banking settlement plan (BSP), and to hotels for pre-booked inventory. These are linked primarily to gross bookings."

These answers provide insights into Yatra Online's strategic focus and operational outlook, aligning with the company's financial performance and future growth expectations.