Yatra Online, Inc. (YTRA) Earnings Call Transcript & Summary

Thank you, operator, and good morning to all of you. It's a pleasure to welcome everyone to the call covering Yatra's results for both the full year and the fourth quarter of fiscal 2026. Fiscal 2026 stands out as a milestone year in Yatra's history. Even with substantial macroeconomic challenges that hit 3 of the year's 12 months, this ranks as the most profitable year across the company's 20-year existence. Such a robust outcome speaks to how resilient our business model is, our dedication to innovation, the diversification within our revenue streams, the caliber of our corporate client base, and the hard work of our teams. It is with great pride that I share our FY '26 results with you. Revenue from operations climbed 27% compared to the prior year, reaching INR 10,074 million, which works out to roughly $107 million, while revenue less service costs — our gross margin — rose to INR 4,801 million, marking 22.6% growth year-over-year. Adjusted EBITDA rose to INR 564 million, or about $6 million, up 64% from a year earlier, which demonstrates considerable operating leverage. When it comes to bringing on corporate customers, we also brought in 163 new ones during FY '26, with annual billable value of roughly INR 9,568 million, or approximately $102 million, compared with 148 customers and INR 7,475 million, or $80 million, in FY '25. As Siddhartha will explain in more detail during his remarks, this figure has been climbing quarter after quarter, which highlights the ongoing momentum in our enterprise travel segment and the strength of how we execute our go-to-market strategy. In India's managed business travel segment, online penetration for corporate travel remains below 25%. As the market leader, we hold the strongest position to benefit from this as the industry advances along the online penetration curve. Over the years, we've shown that we can not only bring customers in, but with a retention rate near 97%, we can also keep them for a very long lifetime value; in our view, the present macro backdrop — shaped by a conflict that has pushed up energy prices and disrupted travel across the Middle East and, more widely, international travel — does not signal any structural shift in the travel demand ecosystem at its core. It's a temporary setback that the industry will overcome once conditions normalize. Corporate travel demand in India remains resilient, and we anticipate recovery momentum will pick up substantially in the back half of the year, fueled by revenge travel, much as we saw in the years that followed COVID. That said, the worsening conflict took a heavy toll on our MICE and international corporate travel business, dragging down overall Q4 results. A number of Q4 MICE and international corporate group travel bookings were either called off or pushed into FY '27. Without this effect, it's quite probable we would have delivered stronger results exceeding last year's performance. The ongoing conflict, along with the balance of payments challenge, has also sharpened the government's attention on domestic tourism as a strategic pillar. Improvements to infrastructure across rail, aviation, and the domestic highway system point to a positive outlook for tourism within India. We think Yatra is in an exceptionally strong position to take advantage of this shift, thanks to its leading domestic hotel inventory. Our API infrastructure framework has been upgraded, and moving onto Google Cloud has greatly strengthened our capacity to deliver hotel content to a broad network of travelers, both domestic and international. For Yatra, this line of business carries highly margin-accretive characteristics, and we anticipate scaling it further over the years ahead. Looking at the quarter, notwithstanding the headwinds, our performance in Q4 proved resilient, particularly within our core air and hotel segments. Gross bookings rose 8% compared with a year earlier. Air passenger volumes climbed 9.6% year-over-year, about 2x the rate at which the industry grew, which speaks to ongoing market share gains. Momentum stayed strong in our Hotels business, with room nights up 36% during the quarter and gross bookings up 9%, even with substantial disruption in MICE. Total transactions rose 15.2% year-over-year, a robust signal of activity and engagement on our platform. During the quarter, our Corporate business brought on 55 new clients, carrying an annual billable potential of INR 2,709 million, or roughly $29 million — above the 40 closures valued at INR 2,234 million, or approximately $24 million, in Q3, which shows how strong our sales engine is even in a difficult environment. When macro disruption occurs beyond our control, what matters more is that underlying demand from our corporate customers stays intact, and we anticipate that a meaningful share of the deferred business will come back once conditions normalize. On a structural level, the outlook for India's travel and corporate mobility sector stays compelling. India remains the fastest-growing major economy, with robust investment flows across manufacturing and business travel demand driven by outsourcing. Given the strength of our corporate customer base, our industry-leading hotel supply, and our AI-enabled corporate travel technology, we stay confident in our medium-term growth CAGR of 20% for revenue less service costs and 30% for adjusted EBITDA. With that overview, I'll hand things over to Siddhartha to take you through the details of our performance. Siddhartha?

Thanks, Dhruv, and good morning to all of you. The bigger picture here is that Yatra posted its best-ever results in financial year '26, and that happened even with macroeconomic and geopolitical conditions swinging around. During FY '26, our RLSC — that's revenue less service cost, or gross margin — rose by roughly 22.6%, and adjusted EBITDA was up 64.2% compared with the prior year, which shows how much operating leverage we gained along with tight control over costs. What makes this stand out is that FY '26 only had 9 months of full operations, which speaks to how well we executed while still keeping our finances disciplined. One more thing worth calling out is how balanced this growth was, coming across segments and lines of businesses. Let me begin by walking you through how the segments performed. Yatra improved its competitive standing in both air and hotels. For the year, the Air segment posted solid TTV growth of 12%, reaching INR 61,874 million, up from INR 55,273 million, all while keeping margins disciplined, and passenger growth beat industry levels both in the quarter and across the full year, with margins held throughout. Something to note: our air margins have climbed consistently, from roughly 2.7% in financial year '24 to almost 4% in financial year '26, which shows a structural upgrade in the quality of our business mix. Among the very few companies in this space, we've kept expanding air margins even as competition across the sector stays fierce. The hotels and packages business picked up real momentum too, driven by robust TTV growth of 27%. With the government continuing to promote domestic tourism and travel growth led by infrastructure, our broad hotel supply footprint throughout India puts us in a good spot to capture demand in both the big metropolitan markets and the emerging Tier 2 and Tier 3 cities. Now let me turn to our lines of businesses. In financial year '26, Yatra brought on 163 new corporate customers whose annual billable value came to about INR 9,568 million, or roughly $102 million, compared with 148 customers and INR 7,475 million — close to $80 million — in financial year '25. That highlights the ongoing momentum in our enterprise travel business and how well our go-to-market efforts are executing. Worth keeping in mind: corporate wins usually need 3 to 6 months before they go live and reach their full trading potential. That gives us clear visibility into added revenue over the next year. Alongside our large enterprise wins, we still see considerable white space in India's mid-market corporate travel segment, which remains largely under-penetrated online. To go after that opportunity, we put money into building a dedicated mid-market sales team in Q3, and early contributions are already showing up in Q4. Given how big the untapped market is, we think this segment can turn into a meaningful additional growth driver for our corporate business over the medium term. And with our corporate business continuing to show exceptional stickiness, with customer retention consistently above 97%, we're well positioned for continued strong performance in our Corporate segment. Throughout the year, our consumer segment also turned in a solid showing, which speaks to how fundamentally durable spending by domestic consumers is. Because our operations are spread across many areas and we have several ways to generate revenue, we were able to steer through stretches of turbulence and still post a full-year performance that held up well. In financial year '26, Yatra gained from added demand tied to newly signed affiliates and partnerships, which helped us capture a bigger share of both the air and hotel markets while pushing margins higher still. That underscores just how scalable our API-led distribution model is, and it has grown into a significant engine of growth. Paired with our wide network of domestic hotel supply, this puts us in position to speed up growth in the coming periods. We're witnessing robust momentum in API-led distribution, as travel agents, affiliates and B2B partners increasingly obtain hotel inventory via the Yatra platform; this lets us grow transaction volumes without sacrificing margin discipline; we anticipate this pattern will persist, and any short-term weakness in consumer demand across the first half of the year ought to be offset as the year moves along. In Q4, Yatra posted a resilient result, with gross bookings up 8% year-on-year. Air passenger volumes climbed 9.6% year-on-year, roughly twice the rate the industry grew, while total transactions increased 15.2% year-on-year. The quarter took a hit from conflict-related disruption, which modestly weighed on air volumes and struck several MICE and international corporate group travel bookings harder, with a number of those either cancelled or pushed into financial year '27. Although the MICE category saw temporary disruption in the quarter, we're observing cases where customer preference is moving away from international programs toward domestic ones, which partly offsets the effect. Crucially, recovery signs are already visible, with Q1 run rates presently running about 20% higher than Q4 levels; we still regard MICE as an inherently appealing category, since it ties so closely to corporate reward engagement and incentive programs. Through the years, we've developed strong execution capabilities and a wide partner network spanning domestic and international markets, which creates a substantial competitive edge. Our gross margin, which we define as revenue less service costs, rose 1% year-on-year to INR 1,101 million, or roughly $12 million. Adjusted EBITDA fell 49% year-on-year to INR 46 million, or approximately $0.5 million. Our Corporate business brought in 55 new clients in the quarter, carrying an annual billable potential of INR 2,709 < > 40 client wins worth INR 2,234 million, or approximately $24 million, in Q3. That shows our sales engine remains strong even amid a difficult operating climate. On the whole, though the quarter was affected by geopolitical uncertainty arising from the West Asia conflict, we stay optimistic about our path, underpinned by our ongoing emphasis on scaling the corporate travel business. The consistent addition of new enterprise clients, improving online adoption and the rising contribution of our hotel business within the Corporate segment leave us well placed to drive operating leverage and achieve gradual margin expansion over the medium term. Going forward, AI and automation stay a central strategic priority for Yatra. We keep witnessing promising uptake of our AI-driven servicing solutions among consumer as well as corporate segments. Ongoing investments, automation, plus effective rollout throughout customer touch points bolstered operational scalability alongside long-term profitability. Working more closely with Google reinforces our tech ecosystem even further, and backs product innovation in customer acquisition and services. When previous cycles serve as a guide, stretches of market turmoil tend to be trailed by a substantial unleashing of accumulated consumer demand. So we anticipate the latter six months of financial year '27 will be considerably more robust than the opening six months. Though macro shifts will probably endure through the first half of the year, we stay hopeful regarding financial year '27, supported by structural expansion in India's travel and corporate mobility markets and Yatra's ongoing spending on AI technology, customer acquisition, hotel supply and its B2B platform. As Dhruv said before, we stay confident about our medium-term growth CAGR of 20%, RLSC growth and 30% adjusted EBITDA growth; with that, I'll pass things to our CFO, Anuj Sethi, to take you through the detailed financial performance. Thank you. Anuj? 2,790 million.

Thanks, Siddhartha. Morning, everybody. Looking at Q4 of FY2026, consolidated, our revenue from operations came in at INR 1,890 million — roughly USD 20 million — which is a decline of 14% compared to the same quarter last year. Gross margin, which we define as revenue minus service cost, was INR 1,101 million, or about $12 million, up 1% year-on-year. EBITDA loss widened year-on-year, landing at INR 102 million, or approximately $1 million. Turning to the full year, FY2026, consolidated, revenue from operations reached INR 10,074 million, or roughly $107 million, a rise of 27% year-on-year. Gross margins were INR 4,801 million, up 22.6% year-on-year. Adjusted EBITDA came to INR 564 million, or approximately $6 million, which works out to 64% growth year-on-year. Meanwhile, EBITDA improved to INR 266 million, or about $3 million, representing 31% growth year-on-year. On segmental performance: air ticketing passenger volume was 5,395,000, up 2% year-on-year, while gross air bookings rose 12% year-on-year to INR 61,874 million, or approximately $659 million. Air gross margin climbed 30% year-on-year to INR 2,449 million, or about $26 million, with margins moving up from 3.42% to 3.96%. In the Hotels and Packages segment, hotel room nights came to 1,936,000, a 16% year-on-year increase. Gross bookings were up 27% year-on-year at INR 16,578 million, or approximately $177 million. Gross margin there expanded 34% year-on-year to INR 1,502 million, or roughly $16 million, with margin improving from 8.60% to 9.25%. On liquidity, cash and cash equivalents plus term deposits as of 31st March 2026 were INR 2,512 million, or approximately $26.7 million. With that, I'll hand things back to the moderator and open the floor for Q&A. Thank you. 1,052 million. 1,658 million. 193,600.

To restate this from a structural angle, the prospects for India's travel sector along with corporate mobility remain very attractive. India is still the major economy expanding at the quickest pace, with robust investment inflows into manufacturing as well as GCCs fueling demand for business travel. Given how strong our base of corporate customers is, our hotel supply that leads the industry, and our corporate travel technology enhanced by AI, we stay confident about our midterm growth at a CAGR of RLSC 20% and adjusted EBITDA of almost 30%. With that — with that upbeat note, I want to express my gratitude to everyone for being on the call. I hope we managed to cover every question you may have had. Should anything else come up, feel free to contact our IR partners at ICR, and thanks again for taking part in this call. Thank you. Thank you.

Thank you, operator. Thank you.