Q3 2024 Yatra Online Inc Earnings Call
Thank you for your patience, everyone. The Yatra online inks at schools that caused that twin teach me before today's conference will begin shortly today there was an opportunity to ask a question. Please press star followed by one of your telephone keypad to withdraw your question. Please press star followed by two.
Operator: Thank you for your patience, everyone. The Yatra Online, Inc.'s fiscal third quarter 2024 earnings conference call will begin shortly. Today, there is an opportunity to ask a question. Please press the star followed by one on your telephone keypad. To withdraw your question, please press the star followed by two.
Dhruv Shringi: Lisa Thompson, Jon Hickman, Jed Kelly, Gaurav Rateria, Lisa Thompson, Dhruv Shringi, Alok Vaish, Vijit Jain, Andrew Carreon, Yatra Online, Inc. Lisa Thompson, Jon Hickman, Jed Kelly, Gaurav Rateria, Lisa Thompson, Dhruv Shringi, Alok Vaish, Vijit Jain, Andrew Carreon, Yatra Online, Inc. Good day everyone and welcome to the Yatra Online, Inc's fiscal third quarter 2024 earnings conference call. My name is Dhruv and I'll be the operator on today's call. All participants will be in a listen-only mode.
[music].
Operator: There will be a Q&A on today's call. To register a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two.
Good day, everyone and welcome to the Yatra online, Inc. Fiscal third quarter that 'twenty 'twenty four earnings conference call. My name is Jay and I'll be the operator on today's call all participants will be in a listen only mode. There will be a Q&A on today's call to register a question. Please press star followed by one on your telephone keypad.
Manish Hemrajani: At this time, I would like to turn the conference call over to Manish Hemrajani, Head of Investor Relations. Please go ahead. Thank you, Dhruv. Good morning, everyone. Welcome to Yatra's fiscal third quarter 2024 financial results for the period ended December 31, 2023. I'm pleased to be joined on the call today by Yatra CEO and co-founder Dhruv Shringi and CFO, Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today, February 14, 2024. We don't take any obligation to update or revise it.
If you change your mind, Please press star followed by Chi.
At this time I would like to turn the conference call over to diminish hemorrhage any head of Investor Relations. Please go ahead.
Well. Thank you drew good morning, everyone.
Well it can be opex fiscal fourth quarter of 2020 for clients or was that for the period ended December 31 2023.
I'm pleased to be joined on the call today by your outlook for.
Bob <unk> and CFO Ron without.
Manish Hemrajani: Before we begin our formal remarks, let me remind you that certain statements made on today's call may constitute forward-looking statements that are based on management's current expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially. For a description of these risks, please refer to our filings with the SEC and our press release filed earlier this morning. These files are available from the SEC and also in the IR section of our website.
The following discussion including responses to your questions reflects management's views as of today February 14 2024.
Take any obligation to update the information.
Before we begin our formal remarks, let me 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 risks and uncertain.
That could cause actual results to differ materially.
Dhruv Shringi: With that, let me turn the call over to Dhruv. Dhruv, please go ahead. Thank you, Manish, and good morning everyone, and thank you for joining us for our second quarter earnings call. We are proud to report strong December quarter results. Yatra's air passenger segment recorded a robust 26% year-over-year growth, nearly tripling the industry benchmark of 9%. This makes it the fourth quarter in a row of shared gains for Yatra.
For a description of these risks please refer to our filings with the SEC.
Press release filed this morning.
These filings are available from the SEC and also on the IR section of our website.
With that let me turn the call over to Bruce Lu. Please go ahead.
Thank you Monique and good morning, everyone.
And thank you for joining us for the second quarter earnings call.
We are proud to report strong December quarter results.
Air passenger segment recorded a robust 26%.
Good nearly tripling the industry benchmark of 9%.
This makes it the fourth quarter in a row of share gains for you all.
India travelling sector lost strong brand recognition and successful.
Dhruv Shringi: In the air travel sector, our strong brand recognition and successful strategies for capturing market share have enabled us to grow both our domestic and international air business. As we move forward, we remain optimistic and committed to leveraging these positive trends to drive further growth and success. We fortified our market leadership in the corporate travel sector by signing 26 new corporate customers in the December quarter, with an annual billing potential of INR 2.2 billion, which is approximately USD 27 million. This underlines the capability and leadership of our corporate travel platform. I would like to highlight here one specific deal that we signed in the December quarter with Aramco Asia India, a wholly-owned subsidiary of the global energy leader Aramco. Yatra's user-friendly platform will facilitate effortless bookings for flights, hotels, trains, and other employee services for Aramco's Asian personnel.
Strategy, capturing marketshare has enabled us to grow both our domestic and international databases.
As we move forward, we remain optimistic and committed to leveraging these positive trends to drive further growth and success.
Before departed our market leadership in the corporate travel.
Finally, 36, new corporate customers in the December quarter.
And then the annual billing potential of INR $2 2 billion, which is approximately USD 27 million.
This underlines the capability and leadership of our corporate travel platform I would like to highlight two one specific deal that we signed in the December quarter, good, but I'm, Croatia, India, a wholly owned subsidiary of the global energy leader of ankle yeah.
User friendly platform will consolidate that's atlas bookings for flights hotels, and then all of that piece of it as well.
It goes to Asia, both now with integrated travel solution extends to Aramco and subsidies in key Asian, and oceanic markets, including India, Japan, Korea, Singapore and Australia.
Dhruv Shringi: This integrated travel solution extends to Aramco's subsidiaries in key Asian and oceanic markets, including India, Japan, Korea, Singapore, and Australia. This multi-product and multi-region deal highlights the capabilities and strengths of our platform and the ability to handle any level of complexity with our cutting-edge technology. In alignment with our commitment to shareholder returns, I'm also pleased to report the repurchase of approximately 280,000 shares under the share buyback program authorized by our board, and we continue to be active on the buyback front in the current quarter. This move underlines our confidence in Yatra's promising future and our unwavering dedication to maximizing shareholder value. Now, let me provide some color on the macro picture.
Multi product and multi region deal highlights the capabilities and strengths of our platform and the ability to handle any level of complexity without cutting edge technology.
In alignment with our commitment to shareholder returns.
Also pleased to report the repurchase of approximately 280000 shares under the share buyback program authorized by our board and we continue to be active on the buyback front in the current quarter.
This move underlines our confidence in the outsized promising future.
They bring dedication to maximizing shareholder value.
Now, let me provide some color on the macro picture.
Dhruv Shringi: India's economic landscape remains particularly robust, buoyed by a significant public capital expenditure initiative and a strong domestic economy. The Indian economy is poised for consistent growth, with projections now revised upwards, estimating 7% GDP growth in FY24. Travel, as you know, tends to be closely linked to growth in GDP, and over the past decade, in developing economies, you've seen travel growing closer to 1.5 to 2x GDP growth. Domestic air passenger traffic continued on its scorching growth pace in India and continues to remain the fastest growing air market globally. December 23 saw a total of 13.8 million passengers travel domestically in India, the highest ever monthly passenger traffic number, clearly underscoring the robustness of the Indian aviation sector. Religious travel is one of the biggest segments of tourism in India. Several popular religious centers attract annual tourists in the range of 10 million to 30 million despite the existing infrastructural bottlenecks.
India's economic landscape remains particularly robust buoyed by a significant public capital expenditure initiatives.
Strong domestic economy.
The economy is poised for consistent growth projection.
Estimating 7% GDP growth in FY 'twenty four.
Travel as you know tends to be closely linked to growth in GDP and then over the past decade in the developing economies you've seen travel growing closer to one and a half to do extra GDP growth.
Domestic air passenger traffic continued on its culture and growth rates as India and continues to remain the fastest growing end market globally.
December 23.
Total of $13 8 million passengers traveled domestically in India.
Highest ever monthly passenger traffic number clearly underscoring the robustness of the Indian aviation sector.
Religious travel is one of the biggest segment of tourism in India.
Popular then they just centers attract tourists in the range of 10 million to 13 million. Despite the existing infrastructure bottlenecks on this front. The government has done significant amount of work to improve the infrastructure.
Dhruv Shringi: On this front, the government has done a significant amount of work to improve the infrastructure, and we expect that this improvement in infrastructure will continue to drive upward growth in traffic numbers to these destinations. A recent Jeffries report highlighted that the holy city of Ayodhya could see as many as an influx of up to 50 million visitors each year as a result of the newly built temple. As per the report, tourism in India contributed... USD 194 billion to FY19 GDP and is expected to grow at an 8% CAGR to USD 443 billion by FY33. The tourism to GDP ratio in India sits at 6.8% of GDP, well below most of the large economies.
And we expect that this improvement in infrastructure will continue to drive upward growth in traffic numbers to these destinations are recent Jefferies report highlighted that the who needs to deal with.
Let's see as many as an influx of up to 15 million visitors each year.
All of the newly built temple.
That's what they report tourism in India contributed.
USD 194 billion to our slide 19, GDP and is expected to grow at an 8% CAGR.
443 billion buy side pretty cheap.
Welcome to GDP ratio remained at six 8% of GDP well below most of the logic.
Economy.
Dhruv Shringi: For example, in comparison, China is at 11.6% of GDP. This points to significant headroom for growth in the Indian travel market. Now, let me provide you with some more details about our third quarter. For the quarter ended December 31, 2023, we reported revenues of INR 1.1 billion, which is approximately USD 13.4 million, marking a substantial increase of 23% over the last year. Our adjusted margin from air ticketing rose to INR 1.1 billion, which is USD 13.4 million, a 10.2% year-over-year growth. Furthermore, our adjusted EBITDA saw an improvement of 24% year-over-year, reaching INR 44.5 million or approximately USD 500,000. Moving on to further details of the quarter, the corporate segment continues to be somewhat impacted by softness and travel spend in the IT-ITES sector.
Example, in comparison in China is at 11, 6% of GDP.
This points to significant headroom for growth in the Indian travel market.
Now let me provide you with some more details about third quarter.
For the quarter ended December 31, 2023, we reported that we moved up by another $1 1 billion, which is approximately USD $13 4 million, marking a substantial increase or decrease the thing over the last year.
The adjusted margin from Air ticketing close to INR, $1, 1 billion, which is USD $13 4 million or 10.
0.2% the other way yogurt.
Although adjusted EBITDA saw an improvement of clinical but that year over year, reaching $44 5 million or approximately USD 500 policies.
Moving on to further details of the quarter. The carpet segment continues to be somewhat impacted with software and travel expense in the I T I D.
Dhruv Shringi: We are confident, however, of the recovery in the near term from our largest contributing sector, especially, as you know, AI-related software development, which they include globally. In addition, we expect that the new business that we have won over the last few quarters is more than likely to offset the drop that we have seen on account of softnecks in the IT and ITES sector in the coming quarters. On the hotel front, revenue from our hotels and packages business was INR 449 million, which is approximately USD 5.4 million. For the three months ended December 31st, 2023, this reflected an increase of 17% year-over-year. The increase in revenue is attributable to a recovery in domestic travel, with a higher number of holiday packages sold as a result. From a competitive standpoint, the intensity has remained stable from the last quarter and remains manageable overall.
We are confident however that the recovery in the near term from our largest contributing sector.
Especially has with them.
Weighted software developers seafood globally.
In addition, we expect the new business that we have done over the last few quarters.
To offset the drop that we've seen on account of soft late in the <unk> sector.
Sector in the coming quarters.
On the hotel trying to move from our hotels and packages business was INR 449.
Women, which is approximately USD five 4 million in the three months ended December 31 2023.
This reflected an increase of 17% year over year.
The increase in revenue is attributable to a recovery in domestic travel with a higher number of holiday that could be sold as a result.
From a competitive standpoint, the intensity has remained stable from the last quarter and remains manageable overall.
Some of you may recall, we had long till you ought to apply and membership program in the middle of 2023, we are taking that a step further and as a gradual do I didnt shadowlands, we've offered that subscription fee to our shareholders in India, expanding the shareholder base from debates for upgrading customers.
Dhruv Shringi: As some of you may recall, we launched our Yatra Prime membership program in the middle of 2023. We are taking that a step further, and as a thank you to our Indian shareholders, we have offered that subscription-free to our shareholders in India, expanding the shareholder base and the base for our Prime customers. With a positive macro backdrop and given the ongoing recovery in corporate and ledger travel and the rise in discretionary spending on now a significantly bolstered balance sheet, we believe we are well-poised for a strong FY24 and 25. Aside from seasonality and some softness that I touched upon earlier in the ITEA section, we expect our results to benefit from accelerating growth in both our corporate business and our consumer business as we continue to add to our formidable blue-chip customer base and the legislative strength of our brand.
With the positive macro backdrop, and given the ongoing recovery in corporate and leisure travelers and there isn't discretionary spending and knowledge significantly bolstered our balance sheet. We believe we are well poised for a strong FY 'twenty four 'twenty five.
From seasonality and some software that I touched upon the idea and the idea is that.
We expect our results should benefit from accelerating growth in both our corporate business and consumer business as we continue to add to our formidable blue chip customer base and they sometimes above that.
Dhruv Shringi: Given our stronger balance sheet following the IPO, we've already begun to see early signs of improving supplier margins, and we expect this to gain further momentum in the quarters ahead and have a meaningful positive impact on our operating performance going forward. With that, I'll hand it over to Rohan to walk you through the details of the financial performance. Thank you.
Given our stronger balance sheet following the IPO, we've already begun to see early signs of improving supply margins and we expect this to gain further momentum in the quarters ahead and have a meaningful positive impact on our operating performance going forward.
With that let me hand, it over to go home to walk you through the details of the financial performance.
Sure.
Thank you Luke.
Rohan Mittal: I will now review our quarter 3 numbers for the quarter ending December 31, 2022. Gross booking for the quarter was 18.6 million INR, which is roughly US$224 million, up by 18% yoy, with air up by 22% and hotels and packages up by 4% yoy. For the December quarter, our total revenue grew by 23% to INR 1.1 billion, which is roughly USD 13.4 million on account of sustained travel. Distribute margins were up across air, hotel package, and other services, and the air-ticketing business will be up by 10,000 YY to INR 1.1 billion. While the hotel and package business's adjusted margin was up by 4% yy, to I&R $264 million, which is roughly $3.2 million. Adjusted margin from other services was also up by 49%, by the way. Moving to the expenses. Quarter 3 Marketing and Sales Promotion Expenses, including Consumer Promotions and Multi-Programme Costs, increased by 8% with a live audience to INR 884 million, which is roughly USD 10.6 million.
Longer view of quarter three numbers for the quarter ended December 31 2023.
Our gross margin for the quarter.
$18 6 million INR, which is roughly USD $24 million.
On slide 18 books environment.
But when you do and people development packages.
In my life.
For the December quarter, our total revenue grew by 23%.
And I had $1 1 billion.
USD $13 4 million on account books of fee income or demand.
Different markets.
Across air package and other functions.
The air ticketing business quite dangerous environment.
London.
But in the hotel and package.
Martin was a back office environment to INR 264 million, which was a $52 million.
I guess, we're involved in from other services was also up by 49%.
I mean, we could be extended.
Quarter, three marketing and sales promotion expenses, including can be moved from women and people of Greencore.
But each person on a lot of mortgages.
To iron ore.
The $4 million, which is roughly USD $10 6 million.
The marketing increase.
Rohan Mittal: The marketing increase lacks the overall gross pittance growth of 18%, which shows a strong brand recall for it. Our personal expenses, excluding share dispayment expenses, increased by 8% by 1 to INR 279 million, which is roughly USD 3.4 million.
The overall gross bookings growth of 18%, which is a strong brand recall.
Unfortunately expensive.
<unk> shared their statement expenses increased by 8% coupon on that 279 million, which is up EUR three preferred formula.
And then get the costs as a percentage of the broker gross bookings remain very strong.
Rohan Mittal: Payment gateway costs as a percentage of the total gross bookings remain the range found, while other expenses increased by about 13% on my work. On an overall basis, adjusted EBITDA stands at INR 34.5 million as compared to INR 36 million in the quarter ended December 2018. Lastly, as of 24th December, 2023. The balance of Cash and Cash Equivalents in Term Deposits on our book was INR, a little above INR 5 billion, which is roughly USD 60.7 billion.
<unk> expenses increased by about 30% of our myeloid diseases.
On an overall basis adjusted EBITDA stands at INR 444 $45 million.
Compared to 36 million in the quarter indicative liquidity.
Murphy.
Before we get really cheap.
Balance of cash and cash equivalents and term deposits on our books.
Nickel.
Nickel above INR 5 billion, which is roughly USD 67.
On drastic and from peripheral sufficient liquidity was INR 852 million.
Rohan Mittal: Our gross debt as of 31st December 2023 was INR 852 million. We've reduced this by almost 51% at a gross level on a cotton-cotton basis. With that, we conclude our prepared remarks, and I would like to hand the floor over to the moderator for Q&A. Thank you. Thank you. We will now start the Q&A portion of today's call. If you would like to ask a question, please press the star followed by one on your telephone keypad. If you change your mind, please press the star followed by two.
It reduces by almost 61% of the grassman on Oklahoma.
With this we conclude our prepared remarks, I'd like to hand, it over to Margaret.
Yes.
Yeah.
Thank you we will now start the Q&A portion of today's curve. If you would like to ask a question. Please press star followed by one on just kind of think keypad. If you change your mind. Please press star followed by chain.
Our first question today comes from Scott Burk from H C. Wainwright. Your line is my wife and please go ahead.
Operator: Our first question today comes from Scott Beck from HC Wainwright. Your line is now open; please go ahead. Hi, good morning, guys.
Hi, Good morning, guys. Thanks for taking my questions first one I may have missed it.
Scott Beck: Thanks for taking my questions. First one, I may have missed it, excuse me, I may have missed it in the prepared remarks, Dhruv, but can you comment a little bit on some of those pricing headwinds that you saw in the second quarter and how they impacted the third quarter and maybe what the outlook is for the fourth quarter on those? So in terms of pricing, headwinds. What we've seen is that during the quarter...
Excuse me I may have missed it in the prepared remarks drew but can you comment a little bit on some of those pricing headwinds that you saw in the second quarter and how they impacted the third quarter and maybe what the outlook is for the fourth quarter on those.
Yeah.
So in terms of pricing headwind.
What we've seen is that during the quarter.
The overall macro industry.
Dhruv Shringi: The overall macro industry has remained fairly robust, but there is an expectation that on the domestic aviation side, we will see some capacity constraints and capacity being pulled out by one of the largest in India for repair of their Bratton Whitney engines. Withdrawal of capacity in the current quarter is likely to see a slight increase in airfares. We would expect airfares to go up in the mid to high single digits compared to the same quarter last year. So there is a little bit of a slicing headwind, which is there.
That's remained fairly robust, but there is an expectation that on the domestic aviation side.
We'll see some capacity constrained in capacity being pulled out by one of the largest in India for your bed up there flattened with many engines and this.
The goal of capacity in the current quarter is likely to see a slight increase in aircrafts.
The airfares to go up in the mid to high single digits compared to the same quarter last year.
So there is a little bit of pricing had been glitches there and.
And we expect this to carry on until about the summer months and it's only around the July August timeframe that we see the capacity, they're going to come back into the ecosystem.
Dhruv Shringi: We expect this to carry on till about the summer months, and it's only around the July-August timeframe that we see the capacity beginning to come back into the ecosystem. So for the next two quarters, there is going to be a bit of a pricing increase, which we will see, and that may have a slight bit of softening or that may result in a slight bit of softening in demand. Great, that's helpful. And my second question is, I'm hoping you can give us a little bit more of an update or a little more color on international travel and the trends you're seeing there. I mean, it seems like that's been a bit of a laggard versus corporate and leisure travel just in catching up since COVID. Yes, sorry.
For the next two quarters, there is going to be a bigger pricing increase which we will see and that may have a slight bit of softening or that may result, in a slight bit of softening in demand.
Great. That's helpful and my second hoping you could give us a little bit more of an update or a little more color around international travel and the trends Youre seeing there I mean, it seems like thats been.
A bit of a laggard versus corporate and leisure travel.
And catching up.
Since COVID-19.
Yes.
So international travel actually improved quite meaningfully in the last quarter.
Dhruv Shringi: So, international travel actually improved quite meaningfully in the last quarter. It was just a little bit ahead of the weighted average growth rate of 26% that we saw. So, we've seen strong recovery on the international side in the last quarter, and there is more capacity expansion that's happening on the international front. We've seen some airlines like Air India deploy more capacity on international routes. We've also seen some international airlines bring back a little bit of their capacity into the Indian market on the back of the demarches there. So, we should continue to see good momentum on international travel. In the first half of our fiscal year last year, international travel lagged behind.
It was just a little bit ahead of our weighted average growth rate of 26%.
So so we've seen strong recovery happening on the international side in the last quarter and there is more capacity expansion that's happening on the international front, we've seen some of the airlines like data and they are deploying more capacity on the international routes. We've also seen some of the international Airlines bring back a little bit of.
Capacity into the Indian market on the back of the deck, which is that so we should continue to see good momentum on international travelers so while in the.
In the first half of our fiscal year of last year International travel lagged behind in the last quarter, which.
Dhruv Shringi: In the last quarter, which is the December quarter, international travel has gained momentum and is carrying forward that same momentum into the current quarter. Great, that's helpful. And then last one for me. I'm just curious, given the severe dislocation between where the U.S. shares trade and where the local shares are valued, what kind of fungibility, if any, is there between the shares? I mean, maybe you could help kind of walk us through that a little bit. As of today, Scott, there are two separate entities. One is a holding company; the other is an operating company.
Which is the December quarter International travel has gained momentum.
And just carrying forward that same momentum into the current quarter.
Great. That's helpful. And then last one for me I'm just curious given the severe.
Dislocation between where the U S shares trade and where the local shares are valued what kind of fungibility. If anything is there between the shares I mean, maybe you could help kind of walk us through that a little bit.
As of today, it's got they're two separate entities, one as a holding company and the other three operating company.
Dhruv Shringi: So on account of that, these two shares today, I think they are not fungible, but we continue to work with our council to see if there is any way for us to make them fungible. But it's a bit too early to state categorically as to what shape that would take. But having said that, as you pointed out, I think there is a large arbitrage opportunity that exists today between the prices of the two indexes, right? India, being the home market, is trading at a very different price point compared to where the US is trading.
So on account of that these tumors.
Today It is fungible.
But we continue to work with our counsel to see if there is any way for us to make them fungible.
But it's a bit too early to state on categorically, what would that what shape would that take.
Having said that I think like you pointed out I think that is the large arbitrage opportunity that exists today.
When the prices of the two.
Indexes.
India being the home market is trading at a very different price point compared to where the U S is trading.
But in terms of Fungibility I think that's all unfortunately that I can share at the moment.
Dhruv Shringi: But in terms of fungibility, I think that's all that I can share at the moment. [inaudible] Yeah. Great. Well, I appreciate the added color and congrats on the results, guys.
Yeah.
Great well I appreciate the added color and congrats on the results guys.
Okay.
Thanks Ginger.
Operator: Thank you. Just to remind everyone, if you would like to ask a question, please press start followed by 1 on your telephone keypad. If you change your mind, please press start followed by 2. We have no further questions in the queue, so I'll hand over for any closing remarks. Thanks, Dhruv. Thank you, everyone, for joining the call today. And, as always, we are available for follow-up. Thank you. That concludes today's Yatra Online, Inc.'s fiscal third quarter 2024 earnings conference call. You may now disconnect your line.
Just to remind everyone. If you would like to ask a question. Please press star one on your kind of think keypad. If you change your mind. Please press star followed by T.
We have no further questions in the key so I'll hand back over for any closing remarks.
Thanks drew.
Thank you everyone for joining the call today and as always we are available for follow ups. Thank.
Thank you.
That concludes today's Yatra online, Inc. Fiscal <unk> 'twenty 'twenty four earnings Conference call. You May now disconnect your lines.