Yatra Online, Inc. (YTRA) Earnings Call Transcript

Thanks, and good morning to all of you. We appreciate your joining this conference call, where we'll go over our results for the second quarter and the first half of fiscal year 2026. I'd like to begin with a look at how operations performed during the period we're reviewing, and after that our CFO, Mr. Anuj Sethi, will walk you through the financial details. As you've likely noticed in the results and presentations we've posted, Yatra had an outstanding quarter — not only did we post strong financial and operational results that came in well above guidance, but we also marked 19 amazing years as one of India's most trusted travel brands. During the second quarter of fiscal year '26, our revenue rose 48.5% compared with the prior year, reaching INR 3,508 million, roughly $39.5 million. Adjusted revenue also climbed considerably versus the same period a year earlier. Resilient demand and steady execution across our corporate and consumer platforms drove that growth during the quarter. It also mirrors the momentum we've built in our corporate business, in the higher-margin Hotels and Packages business, and the continued momentum in the MICE segment. Importantly, our profitability metrics highlight how disciplined our execution has been. Adjusted EBITDA jumped 218% from a year earlier, hitting INR 212 million, or USD 2.4 million, while profit for the period climbed considerably to INR 98.8 million, or USD 1.1 million, compared with a loss of INR 0.3 million, or USD 0.1 million, in the prior year — well above the guidance we'd given earlier. By FY '27, the corporate travel market is projected to hit roughly USD 20 billion. Even so, online penetration in that segment is still low, at only about 20% in FY '24, whereas the overall travel market in India sits at almost 45%. That points to considerable room for digital adoption throughout the corporate travel industry. Online penetration is speeding up, propelled by swift uptake of digital booking platforms along with growing use of self-booking tools and integrated expense management solutions. When it comes to lodging, branded hotels and curated packages are seeing rising demand from leisure and MICE travelers alike, backed by improving supply, higher service standards and a growing appetite for experiential stays. Taken together, this large and growing market, combined with rising digital penetration, offers Yatra a significant opportunity, especially in the underpenetrated corporate segment. Corporate Travel makes up a meaningful portion of our overall business and is delivering strong momentum for Yatra. In Q2, we brought on board 34 new corporate clients, which together added an annual billing potential of INR 2.6 billion, or USD 29.5 million. On the B2C side, we keep making solid progress in rationalizing our cost of acquisition and in finding ways to scale profitably. Bookings, which took a hit in the previous quarter because of macro events, have now begun to recover. What's more, the recent cuts to income tax and GST rates in India should further lift travel consumption and discretionary spending, which supports a stronger growth outlook in the quarters to come. When it comes to technology, we keep making our digital platforms better so the travel experience feels smoother and smarter. Diya AI, the travel assistant we power with generative AI, now lets people search and book flights and hotels without friction, making the whole journey — from planning through payment — flow more smoothly. We've also rolled out a fresh user interface built for hotels, featuring a clear per room per night pricing model, plus taxes and fees shown right up front, so users aren't caught off guard. That redesigned interface aims to make things easier to use and lift conversion rates. On top of that, our best price guarantee means customers can count on getting the lowest hotel rates available on Yatra. Should they spot a cheaper price somewhere else, we either match it or give them an even better rate on that same booking. Over in sales and marketing, we marked our 19th year with a big outing fest — a high-impact sales campaign carried across digital, social, outdoor and print channels. As part of wider brand-building work, we also boosted our corporate travel presence on LinkedIn, which drove more visibility and engagement among enterprise customers. Turning to our ongoing restructuring efforts, the company feels it has a viable structure to pursue. Some hurdles remain, and we're actively working through processes across jurisdictions. Because of the complexity, the time line is uncertain, but our commitment is full. This transition matters greatly for Yatra and its shareholders, since it aligns us with the market and unlocks value. We'll share further updates as things progress. Looking ahead, we see strong, sustained growth opportunities, fueled by rising digital adoption in both the leisure and corporate travel segments. Yatra is well positioned to capture that growth through our expanded corporate client base, enhanced technology offerings and a growing share of high-margin hotels and MICE business. We stay committed to disciplined cost management, profitable scaling and delivering long-term value to our shareholders, while sharpening our competitive edge in the globally — in the global travel ecosystem. Thank you, everyone. And I'll now request our CFO, Anuj Sethi, to brief you on the financial performance for the quarter under review. $20 billion. $29.5 million.

Thanks, Dhruv, and good morning to all of you. During Q2 of FY 2026, looking at our consolidated figures, revenue from operations climbed 48.5% compared with the same period last year, reaching INR 3,508.7 million, which works out to USD 39.5 million. That came on the back of sustained momentum in our key segments, with strong expansion in the Hotels and Packages business and a significant contribution from the MICE segment. Our adjusted margins put up a solid showing across the board. Air ticketing adjusted margin was up 14.7% versus a year earlier, hitting INR 1,016 million, or USD 11.4 million. Hotels and Packages adjusted margin jumped 28.6% year-on-year to INR 514.5 million, or USD 5.5 million — USD 5.8 million, while Other Services adjusted margin expanded 25.1% compared with last year to INR 95 million, or USD 1.1 million, which highlights how strong our diversified business model is. Adjusted EBITDA climbed 217.7% year-on-year, reaching INR 212 million, or USD 2.4 million. Consequently, profit after tax rose substantially to INR 98.8 million, or USD 1.1 million, against a loss of INR 0.3 million, or USD 0.1 million, a year ago. Turning to how each segment performed: ticketing passenger volumes were down 3.5% from last year, at 1,329,000. That said, gross air bookings rose 11.7% year-on-year to INR 14,811.4 million, or USD 166.8 million, and adjusted margins were up 14.7% versus last year at INR 1,016 million, or USD 11.4 million, with the adjusted margin percentage climbing from 6.7% to 6.9%. Over in Hotels and Packages, hotel room nights were up 9.4% year-on-year, reaching 504,000. Gross bookings rose 40.4% compared with last year to INR 5,141.6 million, or USD 57.9 million, while adjusted margins grew to 28.6% year-on-year, hitting INR 514.5 million, or USD 5.8 million, with adjusted margin percentage at 10%, versus 10.9% the year before. Across all segments combined, total gross bookings were up 16.2% year-on-year, at INR 20,504.8 million, or USD 231.0 million. On liquidity, cash and cash equivalents along with term deposits came to INR 2,207.8 million, or USD 24.9 million, as of September 30, 2025. With that, I'll turn things back to the moderator and open the floor for the Q&A session. Thank you. $231.0 million. 1,481.4 million. 2,050.48 million.

I'd appreciate it if you could give us some additional detail on the corporate travel patterns you're observing in India. And perhaps also, how much of the progress you're making there comes from general industry tailwinds, as opposed to share you're taking from competitors?

Morning, Scott. Scott, in response to what you asked, my view is that right now, the corporate travel sector in India is expanding at a pace of roughly 8% to 9%. Our own growth is running at close to double that pace. The explanation for why our expansion outpaces the industry by that margin comes from what we have observed across the past several years — certainly the past 2 years — namely that companies in India are showing a rising motivation to bring in digital technology so they can automate how their business processes work. And since we hold the leading position in this segment as part of that shift, our teams, together with their own ability to execute, are expanding more quickly than the market; so yes, you're correct that the market is itself expanding, yet inside that market, thanks to the technology solution we bring, we can pick up share as well.

Scott, thanks for that. I appreciate the extra detail. Dhruv, I'm wondering how you're looking at M&A and whether acquisitions could speed up the MICE business even further. Is that something you'd consider?

So Scott, we keep assessing possibilities. Right now, giving you anything more specific is tough for me. But looking at us as a company, considering what we've done across the past several years, we've completed some acquisitions successfully and brought them into the Yatra platform. So we keep assessing possibilities of that kind.

Great. For my final question, I realize you mentioned this during your prepared remarks, but regarding the restructuring work, could you share a bit more detail about where things currently stand? At this stage, are you waiting on regulators, or do you still have additional steps to finish on your side?

I believe there are some further steps remaining on our end, though working alongside the MDs, because this kind of work has to be done jointly with the regulators too, our hope is that we can provide something more concrete before long, correct? That said, since several jurisdictions and several regulators are part of this process, the timing is a bit unclear, yet we remain fairly confident that our direction here is the right one.

All right, that's great. Thanks for the extra detail, everyone. And congratulations on everything you've accomplished.

I'd like to focus specifically on the consumer side — how does its profitability compare with what we see in corporate travel? And what's your read on where it's headed? From what I recall, during the previous quarter, maybe on the Q4 call, your guidance was that things would hit their low point somewhere around Q1, Q2 for consumer, after which improvement would set in. Where does that segment stand at the moment? Also, what share of the total business does consumer represent today?

Let me take the consumer part by going in reverse order. Consumer currently makes up roughly one-third of our total gross bookings. As for the direction of that segment, it has clearly reached its lowest point, and we have observed better profitability there; we would anticipate a steady rise in consumer as well. Whereas growth in corporate should land somewhere between 13% and 20%, for consumer we anticipate expansion in the mid- to high single digits; moreover, every bit of that consumer growth we foresee is profitable growth exclusively. Doing anything with a negative cost of acquisition is not something we're considering. Therefore, whichever growth rate we project for consumer here, all of it will be incremental and accretive when viewed from the bottom line.

Great. Turning now to what was asked before, you brought up the work being done to make the company's structure leaner. According to you, certain approvals are in progress. Could you shed a bit more light on precisely where things stand and what kind of progress you expect. When should we expect it to wrap up?

Providing a precise schedule for that is difficult, yet as an organization it stays a top priority for us. Perhaps you know, our corporate setup includes entities located in Cayman Island, Cyprus and Singapore; thus this is a transaction spanning multiple jurisdictions that must be completed; so to that degree, several regulators are going to be part of this process. That is why pinning down an exact time line is tough; still, I believe when it comes to commitment, the organization is entirely dedicated to it.