Q4 2022 Yatra Online Inc Earnings Call
Good day and welcome to the yard truck quotes for Corp, fourth quarter and full year of 'twenty to 'twenty two.
Today's conference is being recorded this and at this time I would like to hand, it over to Mani <unk>. Please go ahead Sir.
Thank you Irina good morning, everyone welcome to <unk> fiscal fourth quarter and full year.
22 financial result for the period ended March 31 2022.
I'm pleased to be joined on the call today by after our CEO and co founder through shrinking.
The following discussion including responses to your questions.
Reflect management's views as of today June 32022.
Don't undertake any obligation to update everybody information.
Before we begin our formal remarks allow me to remind you that certain statements made on today's call may constitute forward looking statements, which are based on management's current expectations and beliefs and are subject to several days.
And things that could cause actual results to differ materially.
For a description of these risks please refer to our filings with the SEC.
In our press release.
Copies of this and other filings are available from the SEC and also on the IR section of our website.
With that let me turn the call over to drove through please go ahead.
Thank you <unk>.
And good morning, everyone.
Before I begin I, just want to remind everyone that part of the March quarter, especially the month of January was significantly impacted by all Mcgraw.
In the long time back now.
But I just wanted to put that out there and hence we should view the discussion the numbers for the quarter in light of that.
During the quarter, we witnessed a swift recovery Boston all the Corona induced slowdown in the month of January .
Both corporate and consumer businesses recovering to an exit run rate higher than our pandemic lie in the recently reported December quarter.
January being severely impacted by on the call, which led to a shutdown in various parts of India.
Adjusted revenue for the quarter came in at INR 980 million, approximately USD 13 million, which is up 1% year over year and down only six 2% Q on Q.
Fight Air passenger traffic declining 20% Q on Q.
This one.
On the back of strong recovery in business travel, especially in the second half of the month of March as the impact of Omicron began to subside.
Adjusted EBITDA for the quarter was INR.
$3 million, which is approximately.
$1 7 million USD.
This includes the investment behind the <unk> initiative.
If you exclude that out.
EBITDA for the travel business would have been INR $72 million, which is approximately <unk>.
$9 million for the quarter.
Both our adjusted revenue and EBITDA came in ahead of consensus we saw both business and consumer travel recover quickly through March and that continued on the upward trajectory in April and May.
In fact domestic passenger traffic in May 2020 was back to 90% of people with levels and even our corporate travel business.
You can see trending at 90% plus of pre COVID-19 levels.
Excellent travel has also begun to recover strongly both the easing of international travel restrictions towards the end of March 2022.
Yes, I mean, if you're expecting GDP to grow at about eight 2% in 2022 and 7% in 2023.
As it relates to looking at how the travel industry has unfolded over the past decade, we see that travel tends to grow at a multiple of GDP in developing markets.
And recent third party estimates are tagged and didn't travel take two to <unk>, 73% CAGR through 2029.
We believe we should be able to achieve faster than market growth as we continue to take share in the corporate travel market.
Yes.
Consumer market continues the secular shift from offline to online.
Now let me provide you an update on the NDA filing.
As you may recall, they didn't have debris yachts online limited.
While the golf, great hitting prospectus on March <unk> with the Securities and exchange Board of India.
And Thats the main stock market regulator in India.
Angel initial public offering and listing I'll take equity shares on the Indian stock exchanges.
We are continuing to work with the regulator to obtain the necessary for the DRA JV. We expect this offering if completed to strengthen our balance sheet and better position us to take advantage of the rapidly recovering leisure and business travel market.
The faster than anticipated recovery that'd be weakness in corporate travel.
The strong resurgence in Dubai travel on the laser side bodes well.
Our plans later this year.
We believe there is significant demand for online travel stocks in India.
The IPO should be well received.
Well, they're all while he's about detection in the U S and Europe , India's economy is growing at a good space as it continues its journey from a developing to developed nations.
The Indian IPO structure also opens up an opportunity for us to explore strategic alliances with partners.
I thought had been comfortable with annuity structure.
Now coming to our March quarter results.
Adjusted revenue for the quarter ended March 31, 2002 came in at INR $980 million approximately USD $13 million.
Was up 1% year over year and down six 2% Q on Q.
Partially due to seasonality and partially due to the impact of Amit.
Year over year, and gross bookings grew 45% largely on the Cogs and increase in June .
While adjusted revenue grew 5% as margins normalize from the normally high margin levels that we had seen in the previous year.
The margins that you're seeing right now I think are more indicative of the kind of margins that we would expect to see.
In the near term going forward.
Despite the effect of all makes all year OBO hotel gross bookings and room nights grew by seven 9% and seven 8% respectively.
Adjusted EBITDA.
By another 50 to $1 9 million also improved by 20% Q on Q and excluding the investment behind the trade business came in at INR 72 million in the quarter.
As of March 31st.
The balance of cash and cash equivalents and term deposits on our balance sheet.
The INR 1000 368 billion.
All USD 12.
$18 million I'm sorry.
The decrease in cash balance from the previous quarter.
Mainly on account of increase in working capital deployment due to the recovery of the corporate travel business.
The recovery has been rapid and both leisure and business travel and I am pleased to say, we are now rapidly heading back to pre COVID-19 levels and that recovery remains on track, but I strongly believe that we should be able to exceed pre COVID-19 levels in the coming quarters.
Gross bookings for business travel maybe other market leaders grew 161% year over year in the March quarter and are trending to exceed 90% of the vehicle.
In may 'twenty to levels not seen since February 2020, and we remain optimistic that it should get back or even exceed pre COVID-19 levels in the near term.
We believe that the stronger than anticipated recovery in business travel that you have witnessed.
Should put to rest any lingering doubts that people who might have had about the future of business travel.
It is very evident that human beings are social animals, and while online tools are great enabler, given being still a pictorial face to face interactions.
Did you see improving inbound interest and continue to sign new customers at an increasing pace onto our corporate Blackhawk give.
Given the highly fragmented nature of the market. We believe will continue to take market share going forward.
Our corporate business should accelerate growth to levels higher than where they were pre pandemic.
We see an accelerated shift towards online bookings.
Especially when contracts come up to the end of life and re bidding.
We also recently launched a meta search tool on our corporate platform.
This easy to use tool should help us to expand our market share in the online bookings of business travel with.
With the implementation of this option.
This corporations, who have multiple vendor partners will be able to search across those vendors then display the best available options for their employees on a single screen along with rates correctly contracted biotech opex with airlines and hotels.
The addition of this tool to our platform now gives us the ability to expand our corporate travel talked Paul into international markets.
On the hotel plant, our strategic partnership with <unk>, because those domestic hotel content from Yatra went live towards the back end of the quarter.
We have witnessed a very strong uptake in the subsequent months.
We believe that this partnership has the potential to more than double the volumes over the next 12 months.
We believe that the incremental volume that we drive through this partnership will not only be accretive from an EBITDA perspective, but will also help strengthen our relationship with our existing hotel partners.
Lead to better long term value creation.
While the competitive intensity has risen modestly since the last quarter.
Overall competitive levels remained neurological unbilled held strong.
<unk> continues to resonate positively with Indian tablets.
Let me now give you an update on upgrade initiative as you look towards digitizing the logistics space, our corporate travel relationships with both airlines and enterprise Executive management together with our technology capabilities gives us a significant head start.
We have rapidly scaled up this business over the past few months and we believe this business longer term has the potential to be even larger than our corporate travel business.
Following the successful Indian IPO I believe people will be in a position to accelerate growth in freight which is receiving increasing interest because of the freight and logistics challenges that the world is facing.
We are optimistic about continued growth in recovery based on the trends that we are witnessing and believe that a well recognized brand and healthy balance sheet puts us in a position to capitalize as the recovery continues to gain momentum.
We believe the opportunity of hateful yachts is massive and we.
Believe Indian Internet travel with will hit an inflection point in the coming years as we get past Covid.
We believe corporate travel maybe other leaders.
Recall, the extremely quickly and we've already seen enough and more evidence of efficacy.
In addition, the efforts we have made during the pandemic to improve operational efficiency will lead to significantly higher levels of profitability and cash flow.
So with that I want to thank all of you once again for your patience and understanding.
I think our business is today.
Poised to grow and recover very strongly.
And we've seen enough and more traction today to be confident.
The future of business travel.
So with that I'm going to hand, it back diminished to open it up for Q&A.
Can you. Please open up the call for Q&A. Thank you.
If you would like to ask a question at this time. Please press star one just telephone keypad Thats star one to ask a question.
We'll take our first question from Scott bulk of H C. Wainwright. Please go ahead.
Hi, Good morning, guys. Thank you for taking my questions.
Drew do you have a dollar amount of the omicron impact in January .
In terms of revenue.
I think if you were to look at it.
And look at this from a linear perspective, I would say, we lost somewhere in the range of about.
20% to 25% at least also quarter on account of that.
Okay.
Way to look at it would be if you look.
December December traffic numbers.
Sure.
And $2 million.
And marine traffic numbers came in at six four.
And February was seven six just to give you a sense.
Changed over those couple of months.
Okay perfect Thats very helpful. And then I was hoping to get maybe a little bit more granularity around it.
Travel volumes in demand I'm, just curious, we're almost back to pre COVID-19 levels, but.
I'm wondering if the habits of travelers are are similar right or fair average fares at a similar rate or people traveling for shorter periods or are they still staying closer to home. What are you guys seeing there.
Sure. So things have obviously gone up on the back of oil prices going up.
We've seen.
Yes.
Go up materially Q1, Q, but that has been that hurt the demand.
What we've seen is that.
On the laser side, firstly, there's been a lot of disposable income that people have saved over the last couple of years and everyone's been waiting to go out and travel and this is literally the first <unk> window in the summer holiday period that people have had to travel. So we are seeing people traveling and drugs in this field.
It's still we've been more focused and more skewed towards domestic as opposed to international International Airfares are relatively higher compared to where they were historically.
But.
Domestic has picked up in very large numbers over the course of the last few months.
On the corporate travel side. However, the story is different that we've seen in international as well recovering very quickly despite the high airfares.
So we are seeing corporate recovery.
Now the gross booking levels up almost 90% of pre COVID-19 levels. So we are seeing very strong corporate recovery also happening.
So in terms of if I listed Pritchard difference between where it was pre COVID-19 and where it is right now in terms of behavior. The bigger trends. We are seeing is in terms of online adoption, especially on the corporate side.
That's the big change, which is happening and then in terms of the consumer side. The growth is much more broad based across tier two tier three towns as well rather than being limited to the main density So online penetration in India seems to truly have deepened during the COVID-19 period.
Great Thats very helpful. Helpful color and then last one from me I'm just curious drew do you have a sense of what.
Maybe your share of the corporate travel market is today versus what it was pre COVID-19.
We don't have a scientific number on that Scott, but I think totally at least.
Kind of recovery, we have seen it.
Is that a recovery is faster than the market.
The feedback that we have from the airlines.
Our hotel partners is that recovery in general is around the <unk>.
75% to 80% Mark and we are now trending at about 90%.
I think we are outpacing the industry, but we don't have any scientific way.
We're doing that across.
Okay perfect understood well I appreciate the time guys. Thank you very much.
Thank you Scott.
Thank you. Our next question is from I'm, just hoping Tom in Sidoti. Please go ahead.
Hi, Thank you for taking my questions.
I'm just curious do you have that passenger traffic numbers for April and May.
Yes, the passenger traffic numbers for May we are trending at about 90% of Eagle with peak.
And April is $10 5 million.
Thank you.
And also in terms of that Indian IPO on the timing of that.
How do you see.
The evaluation being affected by the pullback in the market in the U S. You alluded to that India has not been as bad but.
What do you see in terms of how that.
<unk> affects the valuation of that of the listing.
India.
We think we are.
We're significantly undervalued in the U S right now.
And.
Our peers continue to trade at much higher multiples.
Even if we were to look at a pullback right, which has been that in India very modest level. Unlike the U S. But it's been very stark.
It would still put us at a very very healthy premium.
The way we are currently trading.
Okay. Thank you that's helpful. And then in terms of just great business you gave some color on that Capex trending.
Very strongly for you Bob.
How do you how does that kind of them performing compared to your expectations.
That might be even.
Coming stronger in there how much revenue did it contribute this year and how do you think that becomes.
Contributing for the next year compared to what you had expected before.
Steve for the trade business, we've said it will contribute between four and $5 million.
In the coming fiscal year, right, which is the period from April 'twenty to March 'twenty three.
Very bullish on this business because what we've seen is that the.
Our supply chain disruption that has happened last year.
End of price increases.
Companies have seen across the board they've made them really realize that they need to adopt technology.
We were able to get a better I know on fleet.
And thats the hero bearing good and rich good for US right now because we don't have to do a very heartfelt life companies themselves today are looking for technology solutions that bring some transparency into this whole bank industry.
So we are seeing very good traction at this point in time, and we remain very bullish on the kind of numbers that we've put out for this business.
Okay. Thank you that was all for me.
Sure. Thank you.
Just a reminder to ask a question. Please press star one.
Our next question is from Lisa Thompson of Zacks investment Research. Please go ahead.
Good morning.
Just to get a little deeper on the freight question can you just kind of describe what's your pitch to our customer.
You show them, what you're offering what are they doing now that you are going to change with them.
Yes.
Sure. So today health creators booked is that customers will typically the each out.
The debate is freight liners ocean liners and in the case of air freight to the Airlines auto intermediaries. They will then get one or two responses from these guys and on the basis of that they will then fall.
And then of which one to choose.
What we are looking at doing so firstly this is a very time consuming process, where there are multiple emails, which are being exchanged between people multiple phone calls being exchanged between the customer and either being dmitry or the ocean later and this will typically result in one <unk> will have any way of upwards of 15 to 20.
You May I was being exchange because.
There are so many variables in this.
What we are looking at doing is putting together a technology platform led on that single screen. Once you've entered all your input criteria on a single screen you will be able to see all of the options of various ocean liners and on the screen all the ally notes, which are available to the customer.
And this instantly brings more transparency into the market today, when we speak to the CFO was the other part gazing head of some of the large customers that we work with that constant gripe is that they don't have transparency on what options exist for them.
But they don't know if that guys have reached out to.
It's a five ocean lighters, who are operating on that rule, though there is only one operating right and they don't know whether the guys have reached out to all five or they've just been lazy in the east out all the one or two.
There is no way for them to know whether they've got the best deal available.
By having this slide in front of them it will bring instant transparency.
The booking process.
So thats, what we are trying to solve water and move to power literally from the.
From the intermediary.
As our platform, bringing the power to the hands of the consumer.
Alright, so are you getting paid as a subscription service or do you get a piece of the transaction.
So at this point in time, it's more based on the piece of the transaction, but yes longer term.
We expect this to become more of a subscription service, but today, because we're coming from a relatively low base and we think there is a lot of growth opportunity out yet.
It's more revenue accretive we think to be linked to a transaction value, which is being processed through the platform.
Alright, great.
Going back to international travel.
India's opened up somewhat to that.
Any more.
The country's been opened up since the quarter ended.
Which ones are left that are meaningful that you would like to see open.
Yeah.
Today, we are at a stage where pretty much everything is open.
There are very limited restrictions there still are some restrictions around it of people needing to add booster shots in baseband desktop thing. Besides from countries in Europe are needing the RT PCR test to be done, but otherwise most countries are today to open.
That way, we are seeing very strong recovery happening in international travel.
One of the reasons why I said international travel is still at a lower level compared to domestic is because international airfares are still quite high.
International Airlines flying from India, especially that now have to avoid playing over Ukraine in the space of Russian Air space. So that extends the playing time and hence the price of the ticket.
The lag which is there in consumer spend typically that we would have seen on international travel is being made up today by business travelers.
So out of India. Its today impart virtually impossible to get a seat to Europe or the U S. In.
In front of the aircrafts so business class.
First loss recovery all of that has happened at a much faster pace than economy travel out of India to Europe , and U S and that's being driven largely by recovery in the business all those types of things.
Alright, great. Thank you that's all my questions.
Sure. Thank you.
Thank you there's a follow up question from Tom <unk> Sidoti.
Yes, hi, Thank you for taking my follow up question. So I'm just curious.
We had a shortage of pilots and the crews that we see hand, the U S and bottlenecks at the airports in Europe specifically.
How do you think that might affect your business in the coming quarter or some mileson highly stacks and also.
Dan.
How is India.
The same kind of problems.
I think there are two aspects to it.
<unk> Firstly is that Indian carriers are able to ramp up faster.
They don't face the same crew constrained.
Some of the European carriers are definitely facing this hazard catlin so supply on certain European routes is still less than where it was pre COVID-19 levels, but what we're also seeing is we are seeing some of the middle eastern carriers have been aggressively.
And lastly into those routes so while the European carriers might be losing a bit of market share.
We think of the middle Eastern carriers are gaining at that expense. So overall from a passenger perspective, we are seeing enough supply being available. It's just that it might not be the most direct route which was available earlier to some other place in the direct goods might be limited, but at least the option to playa YSL or the middle east in the cities.
Is definitely available to customers.
Okay. Thank you that was helpful.
Okay.
There are no other questions at this time.
Great. Thank you. Thank you everyone for joining the call today.
As always we are available for follow ups.
Wonderful weekend.
Thank you and this will conclude today's call. Thank you for your participation ladies and gentlemen, you may now disconnect.