YATRA - YATRA ONLINE LIMITED Share Price

In the earnings conference call for Q1 FY '26, management provided an optimistic outlook, reflecting strong financial performance despite challenges in the travel industry. Revenue reached INR 209 million, a 108% year-over-year increase, while revenue less service costs amounted to INR 115.6 crores, marking a 44% rise. EBITDA surged 247% to INR 24.2 crores, with profit after tax (PAT) nearly tripling to INR 16 crores.

The management highlighted that the corporate travel market is projected to expand to approximately US$20 billion by FY '27, with a low online penetration of about 20%. They noted substantial room for digital adoption in corporate travel, driven by the rising use of self-booking tools. The lodging segment also showed promise, with an increased demand for branded hotels and curated packages.

A significant milestone was onboarding 34 new corporate clients in Q1, potentially adding INR 200 crores to annual billings. Two major forward-looking points were emphasized: a continued improvement in operating margins, with a goal of reaching a 25% EBITDA margin in the coming year, and the introduction of the AI assistant DIYA, expected to optimize operations and enhance customer experience.

Management reiterated the guidance forecasted earlier, targeting 20% growth in gross margin and 30% in adjusted EBITDA. They also indicated confidence in recovering beatings in the B2C sector and maintaining healthy growth momentum in both corporate and leisure segments moving forward. The cash and cash equivalents stood at INR 2,208 million, reflecting strong liquidity, while gross debt reduced significantly from INR 546 million to INR 29 million, underscoring the company's improving financial health.

Major Questions and Answers from Yatra's Q1 FY '26 Earnings Call

Question 1: Anmol Garg from DAM Capital asked:
"Firstly, in this quarter, we have seen a strong growth in the take rate, both on sequential and Y-on-Y basis. So what has led to this? Is there any value-added product that is particularly scaling up in our business?"

Answer:
Our air take rates have improved by about 50 basis points due to a focus on optimizing discounting. We've collaborated closely with banking partners for customer acquisition, reducing our need to offer discounts. Additionally, higher margins from corporate travel have helped as the average ticket size for business travel is 1.5x higher than retail. The growth here is largely driven by corporate travel, which is more profitable.

Question 2: Anmol Garg from DAM Capital asked:
"Any guidance for the full year profitability that you are giving both on the EBITDA and the PAT side? And also any guidance on the revenue side as well?"

Answer:
We remain firm on our previous guidance of 20% growth in gross margin and 30% growth for adjusted EBITDA. We are confident we will achieve this guidance and continue to outpace expectations.

Question 3: Nitin Padmanabhan from Investec asked:
"Do you think from here on, we should start seeing volume growth as well on a year-on-year basis?"

Answer:
Yes, we expect to see volume growth moving forward, especially on the B2C side. We're beginning to flatten out and even see marginal growth. The corporate travel sector continues to see positive volume growth as well.

Question 4: Moksh Ranka from Aurum Capital asked:
"Given that gross bookings have not been much growth in the past few fiscal years, when do we see gross bookings increasing from here?"

Answer:
We've recorded a 9% growth in gross bookings this quarter year-on-year. Moving forward, we anticipate that growth will continue as our business mix becomes more balanced between B2C and corporate.

Question 5: Dhruv Shringi was asked:
"What is the annualized growth guidance for gross booking growth for FY '26?"

Answer:
We are targeting approximately 15% gross booking growth for FY '26, with future projections aiming for closer to 20% in subsequent years.

Question 6: Aman Jain from Paras Family Office asked:
"Is there any product superiority for winning the corporate business? What's the annual new sign-ups we are targeting?"

Answer:
We offer an integrated self-booking tool which has customizable options that appeal to corporate clients. Currently, we expect to secure a mix of about 70% B2B and 30% B2C gross bookings by the end of FY '26.

Question 7: Dhruv Shringi was asked:
"What is the worst quarter for the corporate business?"

Answer:
The third quarter is typically the weakest for corporate travel due to holidays. Contrarily, we expect Q2 and Q4 to be our strongest quarters for corporate bookings.