Q3 2025 Yatra Online Inc Earnings Call

Ezra: Hello everyone and welcome to the YATRA Third Quarter 2025 Earnings Conference Call. My name is Ezra and I will be your coordinator today. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. I will now hand you over.

Speaker Change: to Manish Hemrajani, VP of Corporate Development and Investor Relations. Manish, please go ahead.

Speaker Change: Good morning everyone and welcome to our earnings conference call for the fiscal third quarter of 2025, covering the period ended December 31st, 2024. I'm pleased to be joined on the call today by YASA CEO and co-founder Dhruv Shringi and CFO Rohan Mittal.

Speaker Change: Before we begin, I'd like to remind you that certain statements made on today's call may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to various risks and uncertainty that could cause actual results to differ materially.

Speaker Change: For a detailed discussion of these risks, please refer to our filing with the NCC and the press release we issued earlier today.

Speaker Change: which is available on the Immersion Relations section of our website.

Dhruv Shringi: With that, I turn the call over to Dhruv. Dhruv, please go ahead.

Dhruv Shringi: Thank you, Manish, and good morning, everyone. Thank you for joining us for our third quarter 2025 earnings call.

Dhruv Shringi: For the quarter ended December 31st, 2024, we reported revenue from operations of INR 2.35 billion, representing a year-over-year increase of 113%.

Dhruv Shringi: Our revenue-led service cost, which is our gross margin, grew 25% year-over-year to I&R $1.04 billion.

Dhruv Shringi: These are primarily driven by strong performance in our hotels and packages segment, particularly within our corporate travel segment, including our meetings, incentives, conferences, and exhibitions with us, which is our MICE business.

Dhruv Shringi: The robust growth in our corporate travel business underscores our ability to capture the rising demand for corporate travel and event management services, further solidifying our market presence.

Dhruv Shringi: Our corporate travel segment continues to demonstrate strength, showing significant growth across all major metrics.

Dhruv Shringi: In the third quarter of FY25, we onboarded a record 50 new corporate clients, collectively adding an annual billing potential of INR 2.8 billion, which is approximately $32.2 million, reinforcing our leadership in the corporate travel space.

Dhruv Shringi: This not only expanded our corporate client portfolio, but also provided us access to some clients in new industries, which allows us to then build on that to go deeper into those market segments.

Dhruv Shringi: The integration of Globe, which is the company that we acquired in September 2024, is progressing ahead of schedule. The acquisition continues to generate positive synergies, contributing to our profitability and strengthening our supplier relationships.

Dhruv Shringi: Our hotels and packages segment saw a robust year-over-year adjusted margin increase of 65.8%, with hotel gross bookings up 83%. The growth was driven by our strategic focus on cross-selling standalone hotels to our existing corporate client base and growth in the new vice presidents.

Dhruv Shringi: Additionally, we saw improved conversion rates in our hotel business due to enhanced platform features, better inventory management, and strategic supplier relationships.

Thank you very much.

Dhruv Shringi: Despite competitive pressures in the B2C segment, we have stabilized volumes in our air business and are focused on improving operational performance.

Will direct airline supply pricing continue to be a challenge?

Dhruv Shringi: Our strategic efforts to enhance personal travel offerings for corporate clients and their employees have yielded positive results. The attached rate of personal travel bookings to our corporate channel increased by nearly 22% year-over-year, underscoring the effectiveness of our integrated travel solutions.

Dhruv Shringi: This channel continues to be a cost-effective means of customer acquisition for us.

Dhruv Shringi: Yafla.com maintains strong brand recall, which has helped offset industry headwinds in a relatively short period of time. Our ability to leverage this brand strength, coupled with deeper inroads into selling personal travel to corporate employees, has positioned us well for sustained growth.

Dhruv Shringi: With the stabilized B2C Air business and an improving attach rate for personal travel, we anticipate incremental gains moving forward.

Dhruv Shringi: The strength of our brand was further reinforced by the recent recognition of Yatra as one of India's biggest brand movers by YouGov for December 2024.

Dhruv Shringi: Reflecting significant gains in brand awareness, consumer engagement, and reputation. This recognition underscores the impact of our customer-centric approach, technology advancements, and ongoing efforts to enhance travel experience for millions of customers.

Dhruv Shringi: We are also making good progress towards simplifying our corporate structure.

Dhruv Shringi: The board appointed restructuring committee has come up with some pathways and we are actively engaging with relevant advisors and regulators across different jurisdictions to develop a comprehensive proposal aimed at streamlining operations and enhancing shareholder value.

Dhruv Shringi: We continue to enhance the capabilities of our corporate SaaS platform as well. While at the early days, our expense management solution, ReCap, is progressing well, with several prospects evaluating the product.

Dhruv Shringi: as a crossrail opportunity alongside their existing Yatra travel solution as well as a standalone solution.

Dhruv Shringi: Our expense management solution leverages some of the latest innovations in AI, which enables it to deliver a superior customer experience.

Dhruv Shringi: In addition, we continue to leverage AI to automate back-end customer service tasks, which we believe will further provide us with greater opportunities on the operating cost leverage front.

Dhruv Shringi: These initiatives combined with disciplined execution and a scalable cost structure will support sustained margin expansion and operational excellence.

Dhruv Shringi: Switching tacks to the macro environment, as per a recent Deloitte study, India's corporate travel market is expected to double by 2030 to 20.8 billion. This growth is projected to be driven by economic growth, infrastructure improvements and technology advancements.

Dhruv Shringi: The Deloitte report highlights that travel management companies are central to this growth, leveraging AI-powered chatbots, voice-assisted booking systems, and real-time data analytics to provide tailored, seamless experiences for business travelers.

Dhruv Shringi: Business and leisure trips are increasingly getting combined, which is changing the hospitality sector.

Dhruv Shringi: The report underscores how BeLeisure, the blending of business and leisure travel, is gaining momentum. This bodes well for our cross-sell opportunity to sell leisure travel to our corporate customers, where we've been seeing increased attach rates over the last few quarters.

Dhruv Shringi: While challenges remain in the B2C segment, we are highly encouraged by the strong momentum we are experiencing in our corporate travel business, alongside the value creation expected from the globe acquisition and the growth in our MySegments.

Dhruv Shringi: The addition of record new corporate accounts and the development in our mice business exemplify our commitment to delivering long-term value for stakeholders.

Dhruv Shringi: Looking ahead, we are confident in our ability to sustain growth in high-margin businesses while continuing to improve profitability.

Dhruv Shringi: Our focus remains on expanding our hotel and packages and mindset.

Dhruv Shringi: to further diversify our revenue streams. Enhancing corporate travel solutions, including expense management and cross-selling opportunities to maximize customer value. Maintaining cost discipline and operational efficiency while investing strategically include both areas.

Dhruv Shringi: We continue to refine our strategic initiatives to maintain our leadership in the corporate travel sector, and are also looking at restructuring efforts that will help us drive long-term shareholder value.

Dhruv Shringi: With that, I'll hand the call over to Rohan, who will provide a more detailed breakdown of our financial performance.

Rohan Mittal: Thank you, Dhruv. Good morning, everybody. Thank you for joining us today. I'm pleased to take you through Yatra's financial performance for the third quarter, fiscal year 2025.

Rohan Mittal: For Q3 FY25, our gross bookings totaled INR 1.8 billion, which is roughly USD 211 million, reflecting a 3.4% decline year-over-year. This was primarily driven by reduced air travel volumes in the B2C segment.

Thank you.

Rohan Mittal: This was offset by a strong rebound in our hotels and packages segment which grew 81% year over year.

Rohan Mittal: From a profitability standpoint, we've delivered robust results. Adjusted EBITDA reached INR 121.5 million, which is roughly USD 1.4 million, marking a substantial 173% year-over-year increase.

Rohan Mittal: This improvement was fueled by continued cost optimizations, a shift toward higher margin segments, and disciplined operational execution.

Rohan Mittal: Moving on to the segment performance, on the air-ticketing side, our adjusted margin came in at INR 858 million, which is roughly USD 10 million.

Thank you.

Rohan Mittal: Despite the decline, we continue to leverage our B2B business and corporate travel solutions to stabilize margins in the sector.

Rohan Mittal: On the hotels and packages, adjusted margins surged to INR 438 million.

Moving on to expenses.

Rohan Mittal: Marketing and sales promotion costs declined by 32% year over year. This reduction was a result of optimized spending in our B2C segment.

Rohan Mittal: Personal expenses, including ESOP cost, increased by 34% year-over-year. This is primarily due to the full quarter impact of the recently acquired NTT Globe as well as the annual appraisal cycle.

Rohan Mittal: Further, we continue to invest in MICE and expense management teams in line with the overall strategic focus.

Rohan Mittal: Other operating expenses saw a 9% increase over year-over-year. This was primarily due to the business combination effect and the full-quarter effect of acquisition of Globe.

Rohan Mittal: Looking at liquidity, as of 31st December 2024, our cash and term deposits totaled INR 1.89 billion, which is roughly USD 22 million, maintaining a very strong liquidity position.

Thank you.

Rohan Mittal: With this, I'd like to hand over the call back to the moderator to open up for Q&A. Thank you.

Thank you.

Thank you very much.

Speaker Change: We will now open the floor for the Q&A session. If you would like to ask a question please press star followed by one on your telephone keypad now. Please ensure your device is unmuted locally. If you change your mind or your question has already been answered please press star followed by two.

Thank you.

Speaker Change: Our first question comes from Scott Buck with HC Wainwright. Scott, your line is now open, please go ahead.

Scott Buck: Hello everybody, thank you for taking my questions. Dhruv, I'm curious, given the momentum you're seeing in mice, can you give us an indication or some call around how large that market is? Just trying to understand how long, you know, this kind of positive momentum can continue.

Scott Buck: Mice in India is a highly fragmented market, Scott. Firstly, good morning to you. Mice in India is a highly fragmented market. And if I look at from an organized sector point of view, the organized sector barely accounts for about 15% of the overall mice business.

Scott Buck: The overall mice business in India is expected to be close to about between 8-10 billion dollars on an annualized basis.

Scott Buck: So, it's highly fragmented, offers a tremendous amount of opportunity for long-term growth as we move forward. We are just, at the moment, you know, from an organized sector point of view, just dipping our toes literally in the ocean.

Speaker Change: Great, that's helpful. And then can you remind us how long it takes to ramp a corporate client relationship once they're onboarded? I forget, do you get a hundred percent of their business on day one or does that take some time?

Speaker Change: In that regard, I would qualify that answer into two parts, or categorize that answer into two parts. For accounts which are typically more than about $5 million per year,

Speaker Change: These kinds of companies will go live in a phased manner, they will typically take maybe one division or one location live and from there then do a ramp-up, right? So that kind of a scenario will take anywhere between six to nine months to get to the appropriate run rate of our share of wallet.

Speaker Change: In terms of accounts which are less than 5 million and more so in that 2 to 4 million kind of range, these accounts will go live within a 3 to 6 month period.

Speaker Change: Okay, perfect. Now can you tell us what Global India's revenue contribution was during the quarter?

Speaker Change: So while we don't call that out separately, just to give you a baseline, revenue and revenue less service cost, more importantly, last year was approximately about $5.3 million.

Thank you very much.

Speaker Change: Okay, I appreciate that. And then last one for me, any update on timeline on the work the board is doing on potential legal structure? And I'm just kind of curious when we could potentially see a resolution, if any.

To be working with appropriate counsel in different jurisdictions

Speaker Change: We've made, I would consider, meaningful progress over the last three months as part of the efforts that we've undertaken, and I'm hopeful that at some point in the relatively near future we can come back with something more concrete.

Speaker Change: Okay, I appreciate that. Thank you for your time, guys, and get out.

Yeah, yeah, thank you.

Speaker Change: As a reminder to ask a question please press star followed by 1 on your telephone keypad now.

Thank you very much.

Speaker Change: There are currently no more questions. I will hand back over to Manish for any closing remarks.

Manish Hemrajani: Thank you everyone for joining the call today. As always, we are available for follow-ups, so please feel free to reach out for the same. Thank you.

Thank you.

Speaker Change: Thank you very much Manish and thank you Dhruv and Rohan for being today's speakers. That concludes our conference call. We appreciate everyone for joining us today. You may now disconnect your lines.

Thank you.

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Nithyananda. Thank you. Nithyananda.