Q4 2021 Yatra Online Inc Earnings Call
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Excuse me, ladies and gentlemen, thank you for your patience and holding your conference will begin and 5 minutes and again. Thank you for your patience and holding your conference will begin and 5 minutes. Thank you.
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Good day, and welcome to the Yatra fourth quarter and full year 'twenty 'twenty 1 financial results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to manage and my Johnny. Please go ahead.
Thank you Shelby good morning, everyone hope, everyone and their families and safe and healthy welcome to Yatra fiscal fourth quarter and full year 2021 financial results.
For the period ended March 31, 2020.1.
I'm pleased to be joined on the call today by our CEO and co founder through shrinking.
The following discussion including responses to your questions reflects management's views as of today June 8.2021, we do not undertake any obligation to update or revise the information.
Before we begin our formal remarks allow me to remind you that certain statements made during the course of the discussion today may constitute forward looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and.
Uncertainties that could cause actual results to differ materially Inc.
Moving factors that maybe beyond the Companys control.
These include expectations and assumptions related to the impact of the COVID-19 pandemic.
For a description of these risks please refer to our filings with the SEC and our press release from this morning.
A piece of this and other filings are available from the SEC and on the Investor Relations section of our website with that let me turn the call over to drew drew please go ahead.
Thank you Manish and good morning, everyone and thank you for joining us and I hope that you and your families are safe as we continue to navigate our way from what we hope is going to be the last significant and be able to try and limit, especially in India.
And you're all well aware subsequent to the closing of our March quarter, and just uploaded severe sat tight as it is.
Second bongos Covid, David with the country with Kisco speaking in the 400000, a day range and many regions. Once again began to club travel menu.
And many of our friends and colleagues have been unfortunately impacted by just taking days and I'll toss and data with them and their families.
Thankfully since speaking on May 6 T cells and shall be defined and.
And India yesterday reported 86000 cases and significant drop from the peak and number of states and cities of Saturday evening restrictions of the pick from close to June and more I expect it to do so by the middle of this month.
This easing of the clubs combined with the vaccination program has begun to show some early green shoots of recovery and travel with our domestic travel bookings almost doubling between last week of May and first week of June.
And that has managed to administer and over 230 million vaccine doses to date and the government is committed to fully vaccinating ulcer disease before the end of 'twenty 'twenty 1.
In fact, the prime Minister and yesterday laid out a new low not put a more streamline and exploration vaccination program starting June 'twenty 1.
We expect the vaccination drive to gain even more traction in July and August as more like seems become available and they expect travel to recover alongside it.
As part of our helping the community initiatives you will recall that last year, we had a range laughlin supply houses the standard migrant laborers back to their hometowns across India.
During the Lockdown the stand alone, we launched <unk> connect platform and our site. This is an iPhone and supported by a number of volunteers, including our employees enables people to get better and find information on COVID-19, the social such as availability for oxygen Hospital day, ambulances, medics and centers et cetera and.
All of these things are and extremely short supply during the peak of the pandemic and the month of May.
And we continue to navigate our way through this pandemic and very proud of the dedication and efforts exhibited by my 2 colleagues both internally and towards the larger community. During these challenging times.
1 tablet demand was subdued due to high cash balance and partial lockdown across the country.
I'm very confident that the industry really in need of color and we have begun to see a liter and does that in the past few days as we look forward to the end of this pandemic and which we believe will be driven by the base of vaccination in the coming months.
Lead channel should recover strongly as evidenced by the strong recovery or supposedly.
Now turning to our March quarter book Wallets.
I'm pleased to report to you outside of robust March quarter, driven by the recovery and domestic play and travel where we saw passenger traffic recovering to about 20% of people with levels for the quarter adjusted.
Adjusted revenue of 33 million was up 60% sequentially and a.
A nation of revenue growth and tight cost management helped us achieve positive EBITDA adjusted EBITDA of $1.3 million. This was well ahead of plan and we ended the quarter with a strong balance sheet as the cash balance of approximately $31 million.
As we look to be Arrowhead, and we see travel recovering towards the back half of calendar 'twenty 'twenty, 1 as vaccination accelerates and travel and restrictions gradually lift with domestic first and benita and international traveler and towards the latter part of the year.
On the consumer side, despite the second wave hitting us towards the end of the quarter passenger traffic and demand quarter was up 21% sequentially, averaging the low 60% of people and levels on the international front and recovery continues to be muted and it's all being pulled and impacted by the second wave.
We expect the recovery and international to continue to be more gradual and more likely towards the end of this calendar year and largely dependent on the case cultivate and global vaccinations.
Our hotel room nights booked solid low tenancy is about is domestic hotel toward recovery led by pent up demand and the consumer side, but I do the second wave of hotel room nights grew almost 48% Q on Q and even exceeded prior numbers by growing 23% year over year led by a rebound and the consumer demand the strength.
Alright, and industry, leading hotel inventory, along with lower competitive intensity and the quarter.
We continue to make strong progress and the corporate segment and signed 21, new notable contracts and demand quarter alone cause further solidify our position as the leading called per travel service provider.
These new customer signings and a challenging quarter for the under school yacht sales leadership position in the corporate segment in India and.
And our ability to extend our platform to cross sell other products and services.
Our perspective, and our pipeline of prospective new customers continues to grow and the inbound and interest has increased meaningfully post pandemic and we believe online penetration and the corporate travel market and India is approximately 10% to 15% and.
And larger part of the market today about 60, plus and we believe is still under vertical sales by small low offline players as a result of the pandemic. We are seeing evidence of an accelerated shift towards online players and especially as contracts come up to the end of life and rebuilding vs.
We remain confident and our platform's capabilities to serve and scale and he type of customer.
Corporate travel recovery is expected to lie consumer.
But please do note that the book already comparable sales.
And it's growing at a faster rate and.
And we expect this dynamic to the Villa post pandemic.
Turning to our fiscal fourth quarter results.
Resolve meaningful sequential recovery this quarter, reflecting a recovery led by pent up consumer demand.
And this recovery in domestic travel and led to a sequential quarterly growth of 60 per cent and adjusted revenue to 983 million, which is approximately 31.3 million U S dollars versus about $8.3 million in the December quarter.
Total revenue flow there combined with strong cost controls enabled us to achieve positive EBITDA in demand for whom and ahead of plan on our adjusted EBITDA and the March quarter was INR $97.4 million, which is approximately 1.4 and keeping them and he was told US. This was the Boston movement from and also.
And 36 million lineup and.
And the December quarter.
We continue to hold our cost with the minimum and we believe we have adequate liquidity on the balance sheet to weather This thing and B and C is back to sustained profitability.
1 other strategic growth driver for US is the expansion of our corporate distinct lifestyle and.
We continued light and non travel and related digital offerings to our captive corporate customer base.
And the largest corporate travel service provider and the country, we have strong relationships with Tom and the biggest and best known enterprises and India.
And we continue to make inroads into these organizations with our non travel offerings.
1 of our non travel all things, which is makes it a great. Initial response is a solution for fleet management.
We are currently offering ocean and Air force bookings services to our customers.
And we'll be expanding it to include surface answer locator and meal.
We are seeing very strong demand for this service offering the freight industry and some of you might know is multiple times the size of the travel industry and exhibit similar attributes to what the business travel industry did about a decade ago.
The industry is extremely fragmented and has very low levels of technology adoption.
We are fortunate to be able to leverage the expertise, we have acquired and building our own cash that bump and corporate travel over the years and the same is being leveraged to build out a great platform.
We believe they have a great opportunity to create a SaaS platform for trade book gains along the lines and corporate travel platform.
Additionally, we are also looking to leverage our existing vendor and corporate relationships on both the supply and demand and site for offtake business.
Based on our current revenue run rate, we would expect our trade business to generate between 1.5 and blend to 2 million and U S dollars of revenue in fiscal year, 'twenty, 2 which we believe should grow to between $45 million in fiscal year, 2 and heat treat.
Given the size and scale of the freight industry and its current dynamics. We believe that this is a business, which could potentially go to a similar size and scale of our corporate travel business pre COVID-19 over the next few years. We currently have a team of over 100 people focused on this and we will continue to grow this Philadelphia.
We're very excited about this and believe this is a great complementary addition to our platform.
And as of March 31, 2021, and the balance of cash and cash equivalents and term deposits on our balance sheet was INR 2.26 billion or approximately USD 31 million.
When we come out of this pandemic on the back of the secular growth and Indian travel the acquisition of new corporate customers that have been made during the pandemic, albeit still cycling business and it's completely accretive and has the potential to grow to the players about pre pandemic corporate travel business and the coming years, we believe we.
Should get significantly better revenue growth trajectory.
This growth and revenue combined with the efforts we made during the pandemic to improve operational efficiency will we believe lead to significantly higher levels of profitability and cash flow.
I want to tangle share holders, who have slipped by outflows from these trying times and.
And hopefully and honestly believe that Tony and Michael Klein before your patience and understanding as reported.
This concludes our prepared remarks, let me now hand, it back from a niche for Q&A. Thank you.
And here.
Thank you Shelby.
Shelby can you. Please open up the call for Q&A.
And you would like to ask a question. Please signal by pressing star 1 on your telephone keypad.
If you're using a speaker phone. Please make sure your mute function is turned off.
Allow your signal to reach our equipment.
Again, Please press star 1 to ask a question.
Well pause for just a few moments to allow everyone an opportunity to signal for questions.
Well take our first question from Scott Buck with Inc.
Right.
Hi, Good morning, guys. Thank you for the time and I jumped on the call little bit late and I was hoping maybe you could provide a little bit of color around down bookings in terms of you know are we back to a bogie and habits and that looked pre pandemic or are we still looking at a lot of them are kind of closer in.
You know type of a booking.
So in terms of bookings Scott.
And fourth quarter, although you saw a very strong recovery and the bookings.
And we were sequentially up 62% in terms of our revenue Q on Q. So we saw good revenue growth quarter on quarter, but with.
And then the second day of the pandemic, which began towards the last 2 weeks of March and then continued into April and May we saw a meaningful slowdown but in the last 2 weeks I lived and lockdown restrictions have begun to get eased and case sales have come down we've seen very steady recovery.
In fact, they importantly public.
And the number of bookings so our sense is that guys vaccination continues to take a strong up reported across the country.
And.
And the case count continues to come down we should see childhood recovering quite strongly in the coming quarters.
And I guess and turns it that visibility and.
You know what what's your level of confidence that you look out you know the first couple of quarters of the fiscal year versus the back and at this point.
Yeah, I think I look at how things turned out in the first week or so after the first wave the recovery on the domestic site Inc.
And Q3 and Q4 after fiscal year was quite strong and we think the similar story is going to play out this time around as well with the added advantage that a number of people are beginning to get vaccinated.
So we have ive spoken to customers and anecdotally the feedback that we have from people who've been vaccinated.
And it seems those people are willing to travel a lot more there is internal talk I respond with hospitals and discussion with the government as well and there is talk that.
And hopefully vaccinated might be allowed to travel freely within the country is low if that comes through over the next couple of weeks that you're definitely lead to a significant uptake in.
And the number of people who are traveling.
Yeah, No. That's very helpful. And then last Oh, and the corporate travel side I'm curious what are the competitive landscape looks today versus what it maybe looked like a month ago at the height of the pandemic, where you're starting to see you know.
And some of your competitors in the space get more aggressive and the way there are pricing or anything along those lines back from color would be helpful.
On the corporate travel side.
And we think the competitive landscape actually is building, even more and on favor the more and this has dragged out the harder it's become for the smaller and mid tier players to operate and the segment and just engineers to put additional pressure on them, even some of our larger competitors have been fairly quiet over the last year.
Low water also so I think from that perspective, we are very well placed to take advantage of the situation and it's reflecting and the number of new customer wins that we've had and the last quarter.
Great. That's very helpful. I appreciate the time guys and congrats on the quarter.
Thank you.
And again to ask a question. Please press star 1.
We'll take our next question from Matthew <unk> with Dougherty.
Yeah.
Hey, Thanks for taking my questions.
And I apologize I dialed in late so apologize and let's start a covered and the prepared remarks, but I'm curious how are the changes we saw updates and we per bands I think the lower <unk> and other.
And might impact demand for air travel and and and if that will have any influence over the next few quarters for you.
Sorry, Matt I was struggling to hear the question and the waste from being a bit distorted and.
And each will be able to get the question.
No Matt could you please repeat that.
Alright.
So we saw some changes to fare bands I think for air travel in India and Star and the past week. So I'm curious if you see those are impacting demand for air travel as.
The Covid wave Wayne and no air travel starts to recover and it.
Is that going to shift more demand back towards rail or.
Or how do you see that shaping shaping up.
Sure I've got it but so in terms of the bad bank change because they're now and those are thresholds and limits, which are recommended by the government, but the airlines continue to price right in line with where the market demand is.
And today and what we've seen is that Gil day.
Market demand has largely shifted from being travel between the metro cities to travel between metros and tier 2 tier 3 Dallas and the Airlines of Inc.
Aware of this change and buying back and.
And we haven't really seen any significant price changes.
Being affected by the airlines.
And anything I feel at home prices and.
We've looked at the data continue to remain soft and to that extent, we expect demand to recover quickly.
And from a customer's point of view who's traveling from a tier 2 down.
And.
Even if retail and travel and slightly cheaper.
Those who can't afford air.
Even if it means stretching a little bit are doing so because as the availability of screens is also limited and.
And B is viewed as a much more safer means of travel than rail transportation. So.
And given that I think this change, which we witnessed over the last year and also the wealthy increasing amount of traffic originating from gear duty free thousands I think that's here to stay we don't see that day, 1 thing anytime in the near future.
Got it.
And then.
In terms of the free strategy I think you mentioned you have about 100 people working on on that strategy today.
And I think you flushed out some expectations around revenue and the near term Hum and.
And book point, do you think that strategy hits, a accretive level or do you expect it to be profitable you know, what's the breakeven point for that service.
So actually interestingly enough.
And even the last month.
And that business manage to get to breakeven and the last month et cetera. So we expect it to be accretive and debate and yet we don't expect that business to be a.
You know dry van and other things.
In let's say for an extended period of time, there might be a quarter and also the impact maybe or ramping up the teams, but what we've seen in terms of results on this have been very encouraging.
Customer wins have been pretty rapid on this and we expect that trend to continue so we might see some ramp up costs coming in.
Which might impact us per quarter, because typically it's taking maybe about 2 to 3 months for new sales teams to come in and get fully productive, but that's about it.
So I don't see a long gestation period for this.
Got it and last question from me, just I guess big picture around the.
And at least what you saw in Q4 and terms of offline versus online bookings and and the market.
You know like in the Indian market.
Again this is.
Based on discussions with the airlines, but the airlines have seen very significant shift and the booking pattern.
And as the online players.
What is the offline players now all this and corporate travel is at a very low and so that is contributing to a part of that reason, but stripping and as I used to call for travel and Israel. The airlines have seen a very meaningful and no more than a double digit shift.
It was the online players.
Got it thank you.
Sure. Thanks, Matt.
We have no more questions and the queue. At this time that concludes today's question and answer session speakers at this time I will turn the conference back over to you for any additional or closing remarks.
Thanks, Shelby. Thank you everyone for joining the call today.
And always available over the phone and email please feel free to reach out to us. Thank you.
Thank you Stacey everyone and thank you.
This concludes today's call. Thank you for your participation you may now disconnect.
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