Yatra 3Q26 Earnings Conference Call

Ladies and gentlemen, good day and welcome to the Yatra Online Limited Q3F526 Earnings Conference Call hosted by Dam Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Gharg from Dam Capital Advices Limited. Thank you and over to you, sir.

Thanks, Anushka. Good morning, everyone. On behalf of Dam Capital, we welcome you all to Yadras Q3 and 9-month FY26 post-result earnings call. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's call may be forward-looking in nature And some forward-looking statements are subject to risk and uncertainties, which could cause results to differ from those anticipated. From the call, we have the management. We have with us Mr. Dhruv Shingi, Executive Chairperson and Hold-Time Director, Mr. Siddharth Gupta, Chief Executive Officer, and Mr. Anuj Kumar Sethi, Chief Financial Officer of the company. Now, I hand over the call to Dhruv for his opening remarks. Thank you and over to you, Dhruv.

And good morning, everyone. Thank you for joining us in this conference call to discuss our third quarter and nine months ended of fiscal year 2026 earnings. Let me start by briefing you first on the events that happened during the quarter and how it has impacted the industry. Then our new CEO, Siddharth Gupta, will tell you about the operational performance for the period under review, following which our CFO, Mr. Anut Sethi, will brief you on the financial performance in detail. The third quarter, which is typically a strong period for leisure travel in India, witnessed healthy demand across the industry in the first two months of the quarter. This was supported by the festive season and multiple long weekends, which drove higher travel activity and improved customer sentiment during the quarter. December, however, saw significant disruption in the first two weeks of the month. This was following the implementation of the stricter flight-duty travel limitation norms, which led to operational challenges for the airline and a spike in cancellation and delays across the entire industry. Industry data indicates that domestic air passenger traffic declined modestly during this period, reflecting capacity rationalization and these temporary disruptions. Importantly, though, this was just an operational event rather than a demand issue, and we saw load factors recover subsequently, underscoring the underlying strength of the travel industry and demand patterns in India. A key positive during the period was the continued divergence between domestic and international travel trends. While domestic travel experienced, international travel remained strong with healthy year-on-year and sequential growth. Hourses that outbound and long-haul travel, benefiting organized travel players like Yastra, the corporate and international travel franchise, Union budget sends a clear and positive signal about the government's long-term commitment to the travel and tourism sector. By positioning tourism as a strategic growth initiative linked to the employment generation, foreign exchange earnings, and regional development, the policy framework shifts from episodic support to building a more structural and sustainable ecosystem for the travel and hospitality sector. Key measures, such as the rationalization of TCS on overseas to our packages to a uniform 2% rate are expected to lower upfront costs for consumers and improve the demand patterns for the organized players. Supporting this demand in the outbound sector, destination connectivity through infrastructure enhancement, see high-speed domestic hospitality industry capabilities. Indian organizations also to digitize automation, self-service bookings, in compliance and cost savings. AI and predictive analytics platform can automate travel procurement by forecasting demand, optimizing costs, enforcing policies, and enhancing risk management in real time. AI-enabled self-booking tools can perform real-time policy compliance checks, flag risks like disruption or unrest via itinerary analysis, and personalize itineraries in time needed for the platform supported by our business for the quarter. Our B2C business has, as projected earlier by us, turned the corner and is now steadily growing with profitable unit economics. Additionally, our corporate and MICE businesses continue to perform strongly. Business was well on track to deliver our strongest third quarter ever. Systems in the aviation market led to large-scale cancellation of business travel, which had an impact on revenue, as well as increase the working capital deployed in the business. We will detail that more when Siddharth speaks about our operational performance in the quarter. We remain optimistic about our trajectory supported by our continued focus on scaling the corporate travel business. The steady growth in corporate bookings, along with the increasing contribution for higher margin hotels and mice segments, positions us well for sustained margin expansion and profitable growth over the long term. With this, let me now introduce you to Mr. Siddharth Gupta, who recently joined us as our CEO. Siddharth, or Sid, brings with him a wealth of experience across the B2B SaaS industry, and in his last role was the President of Mercer Consulting in India, and was also heading their SaaS-based talent assessment program globally. Prior to this, Sid has been in large tech and SaaS companies like SAP and Asia.

Thank you, Dhruv, for giving a preamble on our quarter performance and the industry A very good morning, everyone. Adding to Dhruv's comments, despite an industry-wide disruption in the airline during the quarter, Yatra continued to deliver growth in its air ticketing business, supported by seasonally strong B2C travel demand. Gross bookings in the air ticketing increased 22% year-on-year, supported by 14% growth in air passenger, which far exceeds the industry growth of about 1%. Take rates also improved from 6.2% to 7.1% on account of the quarter being more B2C-focused. In the hotels and packages segment, our overall performance during the quarter remained healthy. However, we did see some temporary impact in the miles and corporate events sub-segment with a few bookings getting deferred due to flight disruptions. This resulted in a modest one-time impact on the quarter, part of which we expect to roll over into quarter four, supported by a continued strength in underlying corporate travel demand. Gross bookings in the segment grew 20% year-on-year. Excluding the impact of deferment of the minus business, hotels would have grown 30% on a standalone basis, supported by strong growth in our corporate business and in our affiliate business. With gross stake rates moderating slightly from 12.2% to 11.7% year-on-year, on account of change in business mix. Gross margins improved further from 9.7% to 10.2% year-on-year, reflecting proven discounting in B2C and better margin realizations from suppliers. Our B2B to B2C mix was approximately 60-40 for the quarter versus a nine-month average of 65-35 in favor of B2B. Our corporate travel business continues its strong momentum. We onboarded 40 new corporate clients in the quarter, collectively adding an annual billing potential of rupees 2.2 billion. As mentioned earlier, the disruption happened during the highly productive first two weeks of December when corporate travel peaks before holiday. We saw decrement of mice travel into Q4 and Q1 of next financial year as a direct result of uncertainty in the travel during that period. This disruption not only adversely impacted our operating performance but also led to incremental working capital deployment where advances had already been paid to vendors for mild groups. These impacts were largely limited to the month of December and the business is back on track. In the corporate business there's more to share. The early response to our expense management solution has been very very encouraging. We have onboarded eight new customers in one quarter itself. They are all on our now expense management platform. Early traction proves that Yatra understands the pulse of what our corporate customers need. And this solution has not only become a door opener for getting new accounts, but also gives us a huge upsell potential in our existing accounts. Just a few thoughts on what you can expect from Yatra in quarters ahead. Our consumer focus line of business has returned to growth path while improving margins. This was a result of sharp execution coupled with successful tapping into partnerships and affiliates for demand generation. In the near future, you should hear more on organic demand generation projects making impact, helping us further improve margins in this line of business. On corporate value proposition, our corporate value proposition still has a huge headroom for growth. Online penetration in corporate travel market is just about 23%. We have laid a very strong foundation for chasing this potential. We have sharpened our go-to market by establishing separate teams to chase large and small medium enterprises. Demand generation is now amplified by a new inside sales team which has started augmenting the efforts of the team on ground. Early finds are very very promising. Beyond customer acquisition, our farming teams have won multi-year renewals from some of our largest customers, proving that corporates want trusted partners who can deliver value to them. Needless to say that our success is closely tied to the speed at which we can deliver tech innovations.

Our early investments in adding talent to our product and tech team has started showing results you can expect us to further add gap between us and what's available in the market hope that gives you a flavor of where we headed i will pause and hand over to anuj who will brief you on the financial performance for the quarter under review anuj thank you sudad good morning everyone for the third quarter of financial year 2026 on a consolidated basis our revenue from operations grew nine percent year on year to iron 2568 million driven by steady demand across key segments with robust growth from air ticketing business. A gross margin defined as revenue less service cost rose 23% year on year to INR 1277 million driven by better traction in air booking and continued momentum in orders and packages. Adjusted EBITDA surge 41% year on year to INR 247 million translating to a healthy 19.34% adjusted EBITDA to gross margin ratio. Profit after tax to debt INR 83 million, down 17% year-on-year, largely reflecting a one-time charge of INR 38 million related to implementation of new labor courts. For the nine months ended of the financial year of 2026, on a consolidated basis, our revenue from operations grew 43% year-on-year to INR 8.75 million, a gross margin increased 33% year-on-year to INR 3691 million. Adjusted EBITDA grew strongly by 81% year-on-year to INR 751 million. Healthy adjusted EBITDA to a gross margin ratio of 20.35%. Importantly, both our RLSE and EBITDA remained comfortably above our stated guidance. Profit after tax for the period increased 81% year-on-year to INR 386 million. In terms of segmental performance, Our air ticketing passenger volume grew 14% year-on-year to 1491,000. However, gross air booking grew 22% year-on-year, NR16931 million. And our gross air margin rose 32% year-on-year to NR611 million, with gross margins improving from 3.4% to 3.6%. Under the hotels and packages segment, hotel room nights grew by 22% year-on-year to 508,000. Gross cooking increased 20% year-on-year to INR 4306 million, while gross margins expanded 25% year-on-year to INR 438 million, with margins improving from 9.7% to 10.17%. On the liquidity front, cash and cash balance and term deposits stood at 2005.51 million as of 31st December 2025. Grosstech has marginally increased from INR 546 million as of 31st March 25 to INR 583 million as of 31st September 2025. With this, I would like to hand it back to the moderator and open up for question and answer session.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star in one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Anmol Garkh from Dam Capital Advisors Limited. Over to you.

Yeah, thanks for the opportunity and congrats on good performance in the AR segment. So, my first question is on the air segment itself, I wanted to understand that, you know, we have seen very strong growth in the air segment despite the impact of Indigo and weaker seasonality on the corporate travel side. So, what has led to this? Have we increased our focus on the B2C side of the business, particularly on the air side Thank you for that question, Anmol.

So in terms of our air business, we've seen growth both across B2C and on the corporate side. On the corporate side, it's more a question of new customer additions which have been done, and there is volume benefit which is accruing from the new customer ads that have happened, and this is on account of the pipeline that we are carrying forward from the previous quarters. In terms of B2C, there is some tech innovation work that we've been working towards, which is helping us drive demand with positive unit economics. You would recall that on the B2C side, our key focus shifted from just driving volume to driving profitable growth. And there, you know, some of the tech interventions that we've been doing over the course of the last now six, nine months, for the last two quarters now, have begun to bear results and bear fruits. And on the back of that, we think we can continue to sustain growth in the air segment with profitable unit economics on the B2C side as well. So we are today in a very healthy situation where both B2C and B2B are driving growth for us in a very, very healthy and profitable manner.

Sure, Lou. If you can, within this only, if you can also highlight some of the tech innovations that we have done on the air side of things. And also, during our opening remarks, we had indicated that our focus has increased towards tapping on to the partnership and affiliates for demand generation. Is it particularly on the air side of things? And if you can indicate which are some of these partners?

So, in terms of, you know, some of the tech innovations that we've been working on, these have been focused around driving better conversion and providing more upsell opportunities to customers. So whether it's more effective ways of selling seat, meal, baggage, and other add-ons, whether it's branded fares, and then introduction of NDC fares, the objective of all of this is to drive up the revenue per customer. As the revenue per customer goes up, it creates more headroom for us to be more proactive on customer acquisition. So there are multiple layers led by driving up revenue per customer through things like optimizing conversion and driving more cross-sell. And then from there, deploying some part of that judiciously in terms of customer acquisition. On the affiliate side, you know, we've had our affiliate partners, especially on the hotel front, driving strong growth for us. You would recall we have one of the strongest inventories of domestic hotels in India. And we have a wide spread of customers on the domestic hotel side who are sourcing inventory from Yatra. So, we are beginning to monetize the inventory capabilities that we've built over the course of the last decade.

Understood, understood, understood. Okay. Secondly, a question to Siddharth. Siddharth, what is your strategy for the business if any newer initiatives that we are planning to do, any newer products that we are planning to launch or in or is there any particular area that we want to increase our focus towards uh your thoughts with the answer you know i think i shared larger directions we have added it actually completes the bouquet of offering that run their travel

and related expenses uh budgeting and planning and execution on that so i think that has been a great addition we are looking for and working towards more such areas where we could add more value for our customers. And you would hear more on how the LLM-based bot is going to cut down on efficiency, like it will improve efficiencies across the way we deliver more value to our corporate. So I think you'll hear a lot about stabilizing the platform, adding more features, giving more real-time dashboards. You'll hear more about end-to-end automation of the entire value proposition from Yatra going forward. And we use a lot of capabilities that Dr. Shakti's team who heads our AI initiative, he is adding more and more capabilities to the bot that frontends many a times for most of our corporate customer's needs. So we are kind of creating an end-to-end solution portfolio. On the B2C front, just to add to what Drew said, we've done a massive tech refresh to overall improve the organic demand that comes to Yatra. Beyond that, we've worked very hard on maturing the platform end-to-end so that we can have more and better API-based integrations with our partners so that we are able to render very, very good and optimized supply to them so that they give us more demand. So I think on both fronts, the tech team has been really, really active over the last six months trying to deliver as much as possible so that we keep our nose ahead of the competition.

Just adding a little bit more to start, I think while Siddharth is being a bit modest on his capabilities, he's also come in and he's had to put more structure around our sales team, adding to the sales team, defining the inside sales process much more sharply. So I think on the basis of that, we will see our corporate business growth also accelerate on the initiatives that Siddharth and the team are now taking from a corporate demand generation point of view. I think that's going to be another area which you will see, you know, in the near term, more momentum on.

Sure. Thanks for this. So going ahead, should we expect that the corporate side of the business will grow faster with the sales initiatives that we are taking and increasing larger focus in that part of the business?

So Anwal, just to qualify that, you know, as I said, we have sharpened our go-to-market. It would have three pillars. One, Yatra has the largest, you know, B2E business coming from very large corporates. So there is an existing account base of very large customers, there is a team which is going to focus on ensuring that we do renewals, we do upsells and we do more business there. So, year on year, we are seeing our business grow there. On the other two pillars of the go-to market, one is our small and medium enterprise business has been set newly about six months back. We have a new sales leader there and we have set an inside sales team to work very closely with them to add to the demand generation activities that were going on. And the third pillar is our elite sales team, which manages to bring very large customers in every quarter. So it's a three-pronged pillar, go-to-market, one, existing accounts, second is large enterprise, and third is small and medium enterprise. And all three are today firing on all cylinders. We have seen a lot of new leads and new conversions into our CRM, and the price is looking very, very healthy. So, you can expect that going forward in couple of quarters, you will see an increase in conversion and faster growth in the between space, and that has been aligned to our larger strategy.

Thanks for this. I get back in the queue, yeah, and good luck for future.

Thank you. We take the next question from the line of Keshav Sudeikov from Nivershaya. Please proceed.

Congrats on the good set of numbers. So, I have a question on the expense management solution. So, it's because, you know, you mentioned that you have added a key in time for that platform. If you could share some early metrics, the number of files, you know, pilot files and the conversion rate and what could be the average lead size that you are seeing and if you can write, I guess you can expect some meaningful revenue coming from FY27.

So, in terms of the expense management solution, our focus is two-pronged on this. One, to use this as a retention tool, and two, to use this as a tool where we are able to get a foot in the door in customers who typically might not have been Yatra corporate travel customers. So the pricing strategy that we've adopted for the time being on expense is more of a price-led approach to acquire customers and enable greater retention. Our expectation and the feedback on the product is exceptional at this point of time. The feedback we have from some of the large customers that we've pitched it to, they are clearly of the view that there aren't too many solutions, both locally or internationally, which are demonstrating this degree of capability. So we think in FY27, we will add between 5 to 7 crores of revenue from here. The reason the revenue number at this point is not very large because the focus, as I said, is more on getting the initial spread of customers going. Once we have that spread in place, we will see acceleration of revenue from there on. But for FY27 at least, we would expect revenue to still be more muted, but customer adoption to scale up immensely.

We were more in a product market, you know, fitment chase in the early part of this year. Q3 performance and adding eight new customers and new customers all together. These are not our existing customers. So eight new customers looking at the product and evaluating us against what's there in market and choosing us is a great validation that the product market fit has been established and from now here on we will be working very aggressively towards giving shape to what kind of revenue we can earn from this this line of business but it complements it complements our corporate strategy very beautifully because now we will take this product into our existing account base and that's where the upsell magic could happen.

Thank you for the due diligence. And on the corporate card platform, as we mentioned last month about it, in the late 20% adoption. So, like, how are we taking, like, has there been any meaningful uptake in the adoption this quarter?

The corporate online adoption continues to gain momentum. It's now trending at upwards of 70% of transactions being done directly by the corporate customers. So that is on a positive momentum, right? There is no, I don't think that trend is going to slow down at any point. That's more of a, you know, just a universal macro shift that we are seeing in India from a first principle point of view where customers want to digitize business processes. So we don't see that changing at all. You know, that trajectory of more and more customers moving online will continue to happen.

Sorry, like my question was on the corporate cart platform.

Sorry, corporate card. On the corporate card, you know, it's still relatively early days on the card platform. We've had, I think, one incremental customer that's moved on the card platform at this point of time. But that is still more gradual in nature. And this also got compounded by the fact that during the last quarter, we had amalgamation of our entities, which needed, you know, new contracts to be signed, new billings to be moved from one entity to another for corporate customers. So from a card platform adoption point of view, that wasn't really, you know, the focus. The focus was on making sure that these administrative and operational issues got addressed as part of the amalgamation. But going forward, for sure, card platform adoption remains a key criteria for us.

Okay, so I'll come back in with you. Thank you so much.

We take the next question from the line of Biplav Dabarma. from Antic Stock Broking. Please proceed.

Good morning, everyone. And congratulations on the continued good performance.

So, three questions. One is on the AI-related things.

You have explained well. But just, you know, recently there was a lot of news and noise on AI, how it is impacting SaaS, you know. So, just wondering what would be, is there any real threat of AI on OTA business? That is the question number one.

Question number two is the status on the US structure collapsing. Where are we now? And yeah, and the third question is on the, how is the momentum in January in business?

How's the business in January? And do we think we'll be able to meet our guidance or the same business momentum that we had seen in the last three, fourth quarter also? So these are my three questions.

Sure. Thank you for those, Biplug. I'll address the first two and then request Sid to comment on the Jan quarter. So in terms of the AI, you know, there are two parts to this that we look at. For us, we look at AI as a great opportunity for us to be able to deliver to our customers a much more seamless and uniform experience and also be able to personalize the kind of service delivery that we are doing to our corporate customers. We don't see AI as a risk from a corporate platform point of view. On the corporate platform, we think we are today very well-entrenched, and as the market leader, we have an opportunity to adopt AI to a greater extent and use that to further differentiate our services versus our offline peers. So there I see it as a great enabler and something which will allow us to be able to deliver even better service and win even more customers going forward. So I think that is a great positive for us. And similarly, on the customer servicing side as well, the work that our team under Dr. Shakti Goyal has been doing is yielding great positive results on the optimization of the workforce and how we can utilize our workforce better from a customer servicing standpoint as well. So those are big net positives for us on the corporate side. On the B2C side, our focus is on seeing how do we partner better with the AI platforms. In a way, what's happening is the shift in demand generation is happening away from platforms like Google onto the chatbots now, right? So our focus is on seeing how do we become the preferred partner for these bots. And given that B2C is not really the core focus area, it allows us to be more aggressive versus someone who's been investing a lot of dollars in terms of building brands for direct customer acquisition. So it plays into our hands when it comes to the AI proposition. Sarat?

Yatra over the last two decades has a humongous amount of travel memory for both our consumers as well as our corporate customers. And one of the key focus for us is how we can use AI to create an institutional memory for each traveler. And I think that those are the kind of projects which will help us connect better with our customers, both on the consumer side as well as corporate side. And those initiatives will start, you know, making us more meaningful for our customers and hence increase conversions on our platform. That's one which cuts across B2C and B2B. But I completely concur with what Drew said. But on the consumer side, we want to take a leap beyond just working on SEO optimizations and trying to get more traffic through them. Now with chatbots playing a part, we are working fairly hard on ensuring that tech architecture responds better and we get better demand coming from that side. So I think on both fronts, we are working fairly hard.

Which was your second question, Libra? So we continue to work on that. It remains a key priority for our US shareholder base, you know, simplify the holding structure. Beyond that, I think at this point of time, we can't really state much. But this is all I can say. It continues to remain a key priority for us. In terms of January trends, you know, Siddharth can maybe elaborate a bit more on the January trends.

And maybe before we jump a quarter, you know, it's good to see where we stand as of now. So just to refresh everyone's memory, you know, we've given a revised guidance of about 22% growth on revenue-less service cost and around 37.5% growth on the adjusted EBITDA to the market as of last quarter in. Very happy to report that, you know, that revised guidance would have expected us to do about 4, 7 to 8 million rupees overall on RLSE and 917 million on adjusted EBITDA. Today, we are at quarter end Q3 and we stand at about 78% achievement on the RLSE already. And we stand at about 82% achievement on the adjusted EBITDA. So I think we've had a phenomenal nine months in this year, this financial year, and that leaves us with a target for Q4, which is fairly moderate, and hence we believe we are firmly on track to deliver our revised guidance that we gave at the end of H1. That should hint to you what the next year is going to look like. I think on a B2C as well as on a B2E front, we believe that consumer travel demand is not cyclical anymore. Now it's part and parcel of everyone's life. So, you know, I think New Year resolutions and along with that people now plan how much is travel across the year, across 12 months. So I think that demand is not slowing down at all and we intend to benefit from it. With Indian economy being the fastest growing economy, with so many investments coming into the country, especially across manufacturing and GCC, we expect corporate demand to be up next year as well. And hence, fairly confident that we will have growth trending the way it has been trending this year. So, we don't have an exact Q1 guidance right now, but overall things look trending positive.

So, you know, on that, we remain firmly on track to achieve our guidance. I don't think there's anything which has transpired in the last 45 days post-quarter end which would make us think otherwise.

Okay. That's great. Thank you. And all the best. Thank you.

Thank you. Before we proceed with the next question, participants, in order to ensure that the management is able to address questions from all the participants, Please limit your questions to two per participant. We take the next question from the line of Vivek Desai from Investec India. Please proceed. I would request Mr. Vivek to unmute and then speak. Till then we will proceed with the next participant. We take the next question is from the line of Hardik Dushi from White Whale. Please proceed.

Yeah, hi. uh thanks for taking a question uh just continuing on conversation about ai and you mentioned that you don't see ai the threat on the corporate side can you elaborate a bit more uh you know just from the context of how you know how you would have seen in the last 30 years how anthropic and its data has created a lot of turmoil globally. The capabilities of these companies are like expanding maybe on where you know software companies are under threat as companies are under threat and a lot of enterprises could potentially create these solutions on their own. So just want to understand from that context.

Sure. I think that's an excellent question. Just in terms of how the model is evolving on the corporate travel side, right? So if you dig a bit deeper on the corporate travel front, you'll see this is more of a managed service which goes from end-to-end policy compliance to, you know, putting in place the kind of limits that need to be there to integrating within the ERP systems and the HRMS systems of the organizations to then from there providing, you know, working capital credit as well. Now, this is a fairly comprehensive solution, which is at times tailor-made to each organization. The limits are defined. All of them tends to be fairly unique across organizations. That's where we feel from a corporate travel point of view, we don't see these large organizations customizing to that great an extent. So, I understand that on the B2C side, yes, this is, you know, where it's the most standardized solution. The chances of disruption are higher. But given on the corporate side, it's a fairly comprehensive solution that takes care of multiple facets. I don't see that being, you know, let's say the AI tools which have evolved at least in the recent past. Our take is different. Our take is that these tools offer a great opportunity for us to be able to integrate them in differentiating our servicing, in being able to personalize the kind of experience which we have, in being able to provide predictive models from a pricing standpoint to our corporate customers, in being able to digitize and automate the kind of responses and customer servicing experience for our customers. So we see much more of an upside from these AI tools at this point of time for business travel, as opposed to there being a downside to it. On the B2C front, you know, I think it's a slightly different view. The jury is still out on the B2C front, but I would look at, you know, corporate and B2C very differently when it comes to AI tools and their impact.

Got it. Got it. So then just kind of keeping the question, what percentage of corporate travel is offline? And then I guess you expect that to access it online given that you'll be able to provide better solutions.

So if I look at it from an India perspective, and I'll do a top-down approach on that, from a macro India point of view, less than 20% of it is online. The vast majority of India business travel still continues to be transacted offline. For Yatra, we are at about 70% adoption. We see more of the complex, multi-city kind of itineraries which remain offline, but the standard point-to-point has quickly moved online over the last two, three years. So our sense is that from an adoption point of view, we will continue to see improved adoption on the online platform, and it will stabilize somewhere between 80-85%. It will still be that last leg of 15% where people are traveling, you know, you're going from Delhi to London to, you know, Germany to U.S., and then doing a multi-city kind of trip. Those kinds of trips, people will still need a little bit of hand-holding and offline support. A bit of it also gets complicated because of the visa requirements that Indians have, and I don't see that changing at any point in the near future. So I see maybe about 80-85% being the benchmark from an online adoption point of view, and 15% being the offline servicing component.

Just to add, because there is such a headroom for growth, the adoption of a solution like Yatra brings immediate value for corporate customers because not only they discover prices which are more transparent and they can compare those prices, they also know that their organizational policies, travel policies and boundaries are respected by an employee books. And then the immediate benefit is that employees are booking their own travel knowing that they are fully compliant. So that additional layer which is there in terms of, you know, having a travel agent or a travel task manned by hundreds of people, all of that goes away. So I think now that consumers are fairly comfortable with booking their personal travel online, adoption of a platform like us is increasing. And I think that's where going from 70 to 85 looks like a trend that's going to happen very quickly. So it's a double-fold advantage, one, that there's a huge headroom for growth so we can convert more accounts from moving them from offline to online and then within our customer space as well, increasing adoption of costs for more complex segments that travelers are planning for. And that's where, again, our bots play the role. We're trying to automate as much complexity as possible so that we get more efficiency out for our customers.

Thank you.

We take the next question from the line of Chira Kachadia from Motila Luswal Financial Services. Please proceed.

Hello, can you hear me?

Yes, I have just one question. If your U.S. related issue get addressed, then what cost saving and margin expansion is possible for the India visa entity?

Chira, those costs which are related to the U.S. entity don't come into the India books. Those costs sit at the U.S. whole core level only, but yet in terms of management bandwidth and time, that will be a significant saving from a management bandwidth and time point of view. And I think that definitely has a lot of advantage for the company, given that it will increase the focus and the bandwidth that Siddharth and I would have on the core operations. But from a pure number perspective, there isn't really any cost related to that entity that sits in the India books. There is incremental time and effort that goes in things like SOX compliance, etc., which would not be needed going forward once that structure cleans out.

Okay, thank you.

Thank you. We take the next question from the line of Moksh Ranka from Aurum Capital. Please proceed.

Hello, my question has been answered. You can move on to the next question.

Thank you. We take the next question from the line of Vivek Desai from Investec India. Please proceed.

Yeah. Am I audible?

Yes, Vivek.

Yeah. Hi. So I had two questions. One, that in the press release and even on the call, you mentioned that almost 300 million worth of revenue has slipped into the subsequent quarters. So is it possible to gorge as to how much of that will flow through into Q4? And my second question is pertaining to rationalizing the headcount. So in the last quarter, upon call, you had mentioned that you will rationalize the headcount to the extent of 75 personnel by the end of the financial year with a potential of almost 200 employees by next year. So where are we on this plan and will it aid our margins going forward? Anything that you can, you know, quantify on that end?

Yeah, so on my slippages, you know, as Dhruv commented earlier as well, you know, this disruption kind of came as a fairly sudden event for the entire industry. And especially corporate travelers had planned for some of these groups. and these are large groups that need to travel together and sudden shrinkage and supply kind of put a spanner and it was more perception as well they thought there's a lot of chaos on Indian airports and hence many people said it's better to shift these events so we can't give you a number right now in terms of how much is coming into Q4 but we are fairly confident that you know in the range of 70 to 75 percent of businesses for sure coming in to Q4 only very complicated travels which where for which bookings are not available right now because you know there is a organic q4 demand as well which is which is something that we are addressing so we are trying to limit the slippages to q1 but uh but we believe 75 to 80 percent of that entire business should come in in q4 and hence you would see the mice performance go up in the current quota. Maybe on the headcount, Drew could add, but our thought, and this is something that we've been going through, our commitments and our strategy for the company. You have to see it from a perspective where the company is growing at high double digits. So we are a company that is growing at 20%. Our B2E business has a very strong growth quarter on quarter and hence when you add more customers you need people so we might be delivering more from the same set of folks than adding new headcounts i think that's that's something that maybe through could elaborate more but you need to see it from that prism yeah so the way we've looked at this uh we want to look at optimizing 70 to 75 people right which means we should be able to take on new work with the same headcount so if you look at our overall headcount number on the corporate offside.

We've not seen any increase in our corporate headcount and, you know, I don't see us getting to any incremental corporate headcount either in the near term because of the tools that we've implemented from an online adoption point of view and from an automation point of view. So, we remain on track to be able to deliver on that and that will see, you know, some margin expansion for us. And on the MICE part, as well as Tidhar mentioned you know we will see the vast majority of the vice my spot get transacted in the current quarter with some complex identities where you know we are not able to get enough inventory from the airlines getting shifted into the first quarter but vast majority will come in in the current quarter itself got it thanks we take the next question from the line of Sumukh from Kodman Capital, please proceed.

Hey team, am I audible? So my question is on the working capital.

So can you please let us know what's your working capital days in airlines and in hotels and how is this being funded? Because we see an increment of almost 1.4 crores in your interest cost Q1Q and you guys have cash of go to 69 crores in your bank. So just wanted to understand that part.

Sure. So I'll give you what the standard working capital model is, and then we can talk specifically about what factors led to this increase in cost in the current quarter, and those are more one-off in nature. So if you look at our standard working capital cycle, we have on average a 28-day DSO from our customers, and we get about effectively seven days of credit from our suppliers. So net 21 days of working capital is what we end up funding in our own corporate business. In terms of what has transpired in the current quarter, and I think Siddharth mentioned in his opening remarks, because of the disruption that happened at the last minute with some ICE groups, there was advance to suppliers which had already been paid off for the groups which were to travel over the next week, two weeks. So that advance remained outstanding with the suppliers because the groups have now gotten deferred into the current quarter. The second factor which impacted working capital was given the amalgamation of our subsidiaries. We had some customers who were directly, those had to move the accounts from Yatra for business. As you can understand, with large corporations, it ends up taking a few weeks' time. And that's the other reason why capital got extended from a deployment point of view. So net-net in this quarter, we had somewhere between 35 to 40 crores of extra working capital getting deployed, which has now started getting released in the months of January and February. So we would see normalization happening on the working capital front before the end of March.

So normalization for the 21 days working capital, is it only for your B2B business?

Is it only airline or is it a blended for hotels Yeah, so that for the B2B business, that is the blended number.

B2C anyways works on negative working capital.

Okay, so 35 to 40 crores was the incremental working capital. So how was this funded? Was it borrowings or was it through the cash that you guys had?

See, we have cash which is deployed in fixed deposits. So it doesn't make sense for a short period of time for us to break the fixed deposits. We do have overdraft facilities with the binds, and those are what we have dipped into during this period.

Thank you, sir. That answers my question. Thank you.

I think, just to add, you need to see it from a perspective of changing more execution excellence. So, hence, you know, multiple legal entities are now falling into one. It will help the management run the company more efficiently going forward. We had to bite this bullet. This is something that, you know, re-registration of the new company with some of our existing customers is something that we had two times in one of the portals. So, I think that's why it came into Q3, but it's a one-off.

Thank you. We take the next question from the line of Anmol Garkh from DAM Capital Advisors Limited. Please proceed.

Hi. Thanks for the opportunity. Again, I have just one question. Dhruvan, we have spoken about leveraging our hotel APIs as for generating revenue. So on that aspect, just wanted to understand are we giving this hotel APIs to some of the other OTA players and would this mean that overall our gross take rate in the hotel segment will come down while the overall net take rate might increase or the overall profitability might increase in the segment.

So, Anil, that's, you know, I think you've in a way answered your own question as well and your analysis is spot on. We are seeing very strong traction on the hotel side from our affiliate network as well. Obviously, the base is still relatively small and there's a lot of headroom for growth over there, but the trend from a growth point of view is excellent in that part of the business. It will impact the take rate maybe adversely, but it will improve the net gross margin pretty significantly because that business comes in with extremely high contribution margin. So we will continue to see improvement happening in the profitability from that factor as well. And I think for FY27, I think we see that as a meaningful generator of profits for us. So that's another lever of growth for us going into the next year.

But Dhruv, don't you think that this will kind of increase our competition per se, which will now have access to our hotel inventory or so, which would be our, you know, key points why maybe people are coming to Yatra for hotels because I think properties would be available only at Yatra.

See, on the corporate side, let's break this again into two parts, into corporate and B2C. Vast majority of our business on the hotel side comes from corporates. On the corporate side, we have special rates which we offer to our corporate customers. Those rates are not rates that get further distributed. Those are closed user group rates that we have negotiated for our own corporate customers. The distribution that typically happens will happen to people with whom we don't have a massive overlap in terms of customer base on the B2C side of things. So this would be foreign players, for example, who are generating inbound demand into India. We are not chasing demand from outside India into India. So that becomes, you know, a complementary demand generation mechanism for us rather than something which is competing directly with us. Similarly, you know, we have offline travel agency partners who are sourcing from us. These are, again, not areas where we are very active in. So there is large enough white space in that sector for us to pick and choose who we partner with where there isn't any direct impact on our business. Sure.

And lastly, do you believe that this could have an increase on our working capital side of the business as well?

No. So, here it's largely, you know, working capital negative or at max, you know, working capital break-even, meaning the payments from the customer are timed with the payment to the supplier. So, there isn't really any working capital pressure that comes on account of it.

Sure. That's it for my end. Thank you. Sure. Thank you.

Thank you. We take the next question from the line of Harj from NV Alpha. Before that, a reminder to the participants, please limit your questions to two per participant. Please proceed.

Hello, am I audible? Sir, my question was on the B2C part. like 40% of gross bookings was B2C in quarter 3 which is around 870. So my question was what percentage of this 870 would be from B2B cross selling site?

No, this number is directly coming in from the B2C part only.

Okay. Yeah. So out of the total B2C gross bookings 0% is from the cross-selling from B2B, right?

Yes, the B2B part sits separately within B2B. There is no B2B coming in this. So, if your question is more on the personal travel of the employees of the organization, Sash, is that what you were asking? Yes, yes. You know, sits within our B2B side of things and if I look at that effectively, right, that is today adding to about, you know, about 6% to 7% of B2B business and will effectively be about 10% to 12% of our B2C business. But that's a sector that's growing or that's a component which is growing quite strongly given that there is very strong value proposition for the employees of the companies that they are servicing to book their personal travel as well on their corporate travel platform.

And sir, my second question was on the like, how do you see the gross bookings growth for the next two, three years shaping up?

See, we would expect gross booking growth to be in the range of early 20s. The mix of that, as we had alluded to earlier, we would see air growing between 15 and 20 and we would expect hotels to grow upwards of 25. So giving us a weighted average growth rate of around 20 plus percent in terms of gross bookings.

And sir, are we looking at around 1.5% of EBITDA margin as a percent of gross bookings by FY28?

Yes, by FY28. We are currently at about 1.1% to 1.2%. That's why we are trending at the moment. We see strong operating leverage in the business as we've demonstrated.

So, I don't see a reason for us to not get to that in FY28. answer my last question would be due to this disruption which happened in q3 of 480 million 480 million impact in the air passenger side this was the impact on the net revenue or on the gross bookings this is on the gross booking so what would be the impact on the net in your revenue So, 1 percent of that would be the impact ok, that is it from us, thank you sir.

Thank you. We take the next question from the line of Harish Singh from Shubh Lab Research Private Limited please proceed.

Hi Dhruv, greetings this is Pratik from Shubh Lab Research, thank you for the opportunity.

Dhruv, I have my first question on the B2E and the B2C rather B2B in the B2B. B2C makes. So if we look at the numbers for the past six, seven, eight quarters, I think numbers have gone up from roughly 60% to 68%. I am not taking Q3 in account because that is an abnormal quarter for us. Now this shift from around 60 to 68% when we were so much focused on B2E part and probably in most of the quarters we have alluded that the retail is showing some degrowth also or rather some conscious degrowth which we have taken. Now if I say that this mix change is slow is that a statement correct or am I missing something here because when we shifted the business model to B2E in my opinion this shift the pace is quite slow If you can throw some light there.

See, the good thing, and I look at this while I understand your thing, that we today have a situation where all we should look at this, it's not one at the expense of the other. Our B2C business, yes, has been through a bit of a transition over the course of the last few quarters, a stage where it's able to drive growth organically and with profitable unit economics. That's not to in any way suggest that our focus on our B2E business, on our corporate business, is diminishing in any manner. That focus on the corporate business remains heavily and that's the key driver from a growth point of view. There is a certain amount of base effect which is there today because B2C was quite depressed in the last year same quarter. So you are seeing some base effect impact of that. But from an organic point of view and from a business strategy point of view, our focus remains squarely on the B2E side of things, right? So corporate is where, you know, we have pivoted our business and that will continue to be the focus area. B2C, given the competitive landscapes, will go through its own ebbs and flows, but we will not compromise on profitability when it comes to the B2C business.

I think just to add to Dhruv's commentary, I think we referred to B2C, the headlines for the B2C business was that, you know, we've turned the corner around, you know, instead of added to own the business while keeping the net contribution margin positive. So, I think that is what is the impact you see. That doesn't take away from the fact that, you know, our pivot towards B2E has been strong and I think both the businesses have benefited from a bit of a tailwind on the travel demand front across. But just to be saying that we don't want to do positive contribution business and growing then it will ride on Yatra's two-day supply strength actually. So I think that's what you see. But we are sticking to our B2E growth plans.

No, this is helpful. Just that group, you know, every quarter we have been adding probably large enterprise clients and yet this number was a little subdued in my opinion so that is why I asked but I understand your point that it will certainly grow but probably at this pace only so that 75-25 target probably which you have given will be achieved gradually not in one shot.

The reason why you see this being a bit more subdued in this quarter is If you look at the month of December for corporate travel, typically what happens is corporate travel.

No, this quarter I am excluding, bro. This quarter I am entirely excluding.

Yeah, so if we exclude this quarter, then we are anyways at like 60, you know, almost touching now 70-30, right? I think our number would have been 68-32. 32, correct. In order to exclude this quarter, yeah.

Yes, yes. No, no, understood, understood. Point taken, point taken. So my second question is on the RLSE growth driver in last seven, eight quarters. So if I closely look at the numbers, probably because of my business, our gross profit growth grew handsomely, particularly after the acquisition of Globe Travel, because that was primarily into my segment. Now, in lieu of this, you know, I just wanted to ask how do you see the cost structure moving for that particular segment because in my limited understanding that is less tech dependent and more people dependent because of customization, customized nature of the business. So that's the part one, the cost in that segment. And secondly, probably that is also not that ROC accredited because that business or that segment demands some capital as it is a bulk business, multiple bookings at once. So if you can help me understand, you know, this point in the light of margins and ROC vote.

Sure. So firstly, on the margins, MICE is a very margin accredited business. because, you know, from a margin point of view, overall take rate point of view, it's a product with between 9% to 10% kind of gross take rate which is there. And even though the servicing might still be largely offline while we guys are working on some AI solutions for that, while still the servicing is largely offline, from a net contribution point of view, it's a business with contribution margins in excess of 50%. So it is fairly margin-accretive to that extent. On the working capital cycle, what typically ends up happening in the case of MICE is that you will also get an advance from customer, which will range between 50% to 70% of the trip value before the trip departs. So, it is not as working capital intensive as is anticipated to be the case. this quarter was unique to the extent that you know just before departure or literally you know a few days before departure trips got cancelled so you had a situation where there was a mismatch where an advance has been made to a supplier but the advance from the customer did not come through because the trip did not materialize and got pushed into Jan or Feb as the case might be This again is very encouraging, I was of the opinion that there is no advance, I mean the entire money comes after the trip happens, but this is really encouraging to see that

this also is backed by advance payments which reduces the working capital requirement. So even in case we scale this further, we have some cost advantages as you said because you are exploring AI there and then working capital also will be moderate only. So, frankly, very encouraging though this is very encouraging. Thanks a lot, always pleasure talking to you and Siddharth, welcome to Yatra, hope to see Thank you.

Thank you.

Thank you. We take the next question from the line of Survarit from Paladin Capital, please proceed.

Yeah, hi, just a very quick clarification in the numbers that are put out in the presentation every quarter for uh new corporate customers they'll add let's say 220 odd crore is that a gross number or a net revenue number that's a gross number please okay so about six seven percent of that is what would be next that is right that is absolutely right yes okay thank you thanks thank you we take the next question from the line of gunjan kabra from nevishai please proceed Hi Dhruv and Siddharth, so basically just one question that we have a very good corporate

base now of 1300 plus corporates and adding a lot of customers every quarter. So as per my understanding a lot of customers are just booking air travel right now and hotel booking is something which you know large corporate, most of the corporates are not doing both the things right now. So, wanted to understand that, you know, if the hotel booking from the existing base also increases a lot, it would be a very good operating leverage that will come into our system. So what strategy are we adopting right now because that number would be very minimum in terms of percentage of corporates using both the services. So what strategy are we adopting to increase that number?

Sure. So, Binjan, maybe I'll give you a bit of color and then Siddharth will add to that, right? I mean, that's been one of the core focus areas for us over the course of the last two years. There is an initial amount of inertia that you face from organizations because you've got, you know, their own procurement teams who have closed relationships with hotels which have been built over the years. And, you know, based on that, they are a bit reluctant to move. So, one of the big changes that we made in our system when we retooled our entire platform was to open out corporate rates as well. So, the inertia was broken by bringing in flexibility in our technology platform to incorporate corporate rates as well and retail rates. So, now the customers see both their specially negotiated rates plus the rate that we have and we let the best rate win. On the back of that retooling that we did about, you know, I think 18 to maybe 24 months ago now, we are seeing strong traction, and that's why you've been seeing hotels growing at upwards of 30%. We continue to adopt similar kind of, you know, solutions and creative solutions to be able to drive more cross-sell. You know, I think Siddharth can add more color around how we are adding the CAM KRAs as well in terms of focusing the company towards that.

So, I think I was just wanting to highlight and to say it already that if you look at hotel standalone, we've actually grown very handsomely at more than 30% year on year. So, adoption is increasing and as we mentioned earlier, out of our overall hotel revenue, a lot comes from B2E. So, the adoption is really increasing. What you said was, you know, few customers using us only for air is kind of a good news for us. because that allows us a huge upsell opportunity. So when I spoke about the three pillars of GoToMarket, the farming team or the team which is, we call it the key accounts management team, their KRA has a specific target for upsell and getting our customers to use our hotel inventory. And you can visualize a scenario where you are a large corporate it and you have got company contracted rates for various hotel chains, Yatra actually absorbs those rates and when you search for a hotel and a flight, we actually give you both the options. So you will see the company contracted rates and you will see the Yatra contracted rates as well and you have the flexibility to use whichever is lowest and gives you the best deal. So mostly all our customers, especially B2E customers are coming back and telling us that we want that flexibility to come from Yatra. If you, as an aggregator, have better rates available for my employees, I want to pass on that flexibility to them. I think that is where the adoption is improving now. So I think we've already established the value proposition of this offering. Now you'll only see more and more adoption going forward.

I think another recent initiative that Siddharth has led the team with is we've realized that for a number of our corporate customers, the barrier was that they wanted their employees to pay at the hotel as opposed to prepay. So Siddharth and the team over the course of the last two months have worked out a solution which now enables our corporate customers to also be able to use a pay at hotel facility that we've built out along with some of our supply partners. So these are just some examples to give you, Gunjan, an idea that this is a key focus area for us. And a lot of our tooling efforts around technology are around how do we break down any barriers. See, there is at the end of the day, inertia, there are procurement teams who've been building these relationships with hotels for, you know, decades.

So breaking that inertia means that at every stage, you get a new ask from a customer, and then we come up with creative solutions to break those barriers down but I think I think the markets appreciating the fact that Yatra has one of the deepest inventories of hotel with you know I think more than 25 to 30,000 active you know hotels which we manage which give us business every year and the total universe of relationship is nearly 90,000 so I think you know that's what's giving us the tailwind around getting more of our customers moving on to our hotels got it and for corporates international presence is also if

we have an international presence is also very important and if it also helps in onboarding uh larger size corporates also so how are we planning on that side and if we go international like in bcc or you know asian country that you were mentioning also in one of the calls so So, will that also, the gross stake rate basically improve than the domestic rate when we go to the international markets also?

Yes, Subhanjan, that remains, you know, an important opportunity for us to explore going We do want to become, at least in the first step, a regional player over the course of the next couple of years. We continue to evaluate opportunities in the region which will help us build out a network and that network then enables us to pitch for larger businesses. So that remains one of the key focus areas for us.

Over the last three to four months, we have significantly invested in our back-end capability to absorb supply from various partners. So I think that's something that you should keep your eyes open for. We will be announcing more of such partnerships which will add to our supply base for international.

Got it, got it. Thank you so much and good luck to the team, both of you and the team of Yasa.

Thank you.

Thank you. We take the next question from Vilainafanko Shagarwal from Surge Capital. Please proceed.

Hi, thank you for taking my question. So, firstly, I think a few quarters back, I think when we were around 21%, the commentary was that 85% and then less than three years, it would be near 13%. Since then, obviously, the margins are sort of tapered off, obviously there's some sort of similarity over there in the last six months, but directionally, are we still on that path to achieve those sort of...

Yeah, so if you look at, you know, this quarter, because of these two one-off events which happened, which is one, the deferment of the mice, which is a highly profitable segment for us, and secondly, absorbing some incremental costs related to the cancellations that happened on the b2c side we've seen margin taper off a bit into you know close to about 19 percent at the moment that trend that we spoke about remains the same right so we don't see any change in that trend happening and we expect that you know this margin decline which happened in the current quarter will correct itself you know in the coming quarters i think you know those margin trends

Air and hotel margins both are trending right. I think this quarter was more about the mice moving from one quarter to another. Not cancelling, but moving from one quarter to another. I think that's what kind of tapered it for the quarter. Otherwise, we would have had a bump for them.

Got it. Secondly, just a clarification from what was earlier been discussed about my business. So you mentioned that the gross take rate is around 9 to 10 percent and we have contribution margin north of 50 percent. So when you mean by contribution margin, this is similar to EBITDA or like what does that come from?

This would be taking out all direct cost. So EBITDA would mean that there would be allocation of carbon cost and all, which will also come into the picture. But this is taking out direct cost related to that business. So contribution would be 50, EBITDA would be, you know, I think almost late 20s, 30s.

But just to understand the ladder, at an EBITDA level, MICE would be the highest margin business, then hotels and then KF, right?

That is absolutely right, yes.

Thank you. We take the next question from the line of Sonal from President Capital, please proceed.

Hi, this is Honal Manhas, thanks for taking my question. I had two three questions, first it was a clarificatory question when you were talking about implementation of your AI tools with the corporates and making it more personalized. So now to understand, do you have access to the data and the booking patterns of employees or companies?

Just trying to understand that for your intelligence to be better than, let's say, anything that Yeah, I think, you know, we've got one of the richest bases from a data point of view today when it comes to corporate travel. We would have, you know, details around what level the employees are at, what are their current spend patterns, what are their preferred programs, like, you know, hotel programs or air mileage programs that they are members of, you know, other details around their preferences. So there is a lot of data which is available with us when it comes to corporate travel.

So you can visualize where, which is integrated with the HRMA system of the customer, so we know which employee at what level is allowed, you know, what category of hotel and what kind of air ticket needs to be booked for them in terms of class, all of that data and then we also have the path data of where the person has travelled and what their preferences So, when we dish out the supply or when they look for something on Yatra, we give them whatever is the cheapest, whatever is compliant, as well as, you know, what their preferred air and hotel combinations are, and that helps us be more relevant to their environment. So, that's broadly the solution, and hence, we have the data to train the LLM to be more personalized for our customers.

Got it. Thanks for explaining that. Second question, a quick one on return on capital growth. If you were to just analyze your numbers for this nine months, I think we're looking at roughly 60-65 CR of whatever annualized EBIT. And then, so your ROC is inching up from 5% last year to 6% this year. Is there a target for next year? Because I think you do talk about growth numbers. You don't talk about margin numbers. but is there a target for ROC for next year? Because I think the real breakout moment for this business is the value sheet remains safer and the top line grows compared to that. So, just want to understand that.

Sure. I think that's one of the key focus areas for us. Our target, you know, for next year would be to get the ROC in cover digits, right? That's what we are focused on. We see this being a secular trend from an ROC growth point of view. Because the incremental ROC on every corporate customer is extremely high. You know, we are at upwards of 30% ROC on every incremental customer. So as we continue to build scale, we will just mathematically see our ROC continue to improve. Focus area for us.

Gap between 33%, I don't want to go to the detail enough. But basically, after that, there are corporate overheads and hence B2C comes down to a lower number as well as B2C as well. So is that the way to understand the gap between 33% and 8%?

Yeah, so what will end up happening is that, you know, for every incremental customer, there is a higher ROC. Your fixed cost remains most, you know, obviously fixed in nature. So that flows through then to the bottom line. So every year, as you continue to add, you know, 10 to 20% more business, right, you're adding 20% more business, which is coming in at like, let's say, 30% kind of ROC. you will see a weighted average ROCE continue to inch up. That's why from, let's say, 4% of ROCE last year, we will end up somewhere close to about 7% of ROCE in the current year. And we will see a similar kind of improvement in the next year as well.

I understand that. Thanks for explaining. If I can just ask the last question, your operating expenses for this quarter are a little higher. If you double click, I think the payment gateway charges are also up. talking quarter and quarter. Is there a padding to be to be right there just to try to get a clarification?

So, the payment gateway had you know some one-time effect of the cancellations which happened at the on the Indigo site because you know as for the guidance from the regulator we had to refund the full conveniency as well. So, we were left absorbing the payment gateway cost.

I understand that, so the way to understand the OPEX charges is that it should be understand this more as a percentage of your revenue from operations or we should just assume this will grow at an annual rate of 5-10% worldwide from, you know, just trying to build it in our mind for position purposes.

Yeah, so if you look at the charges which are there, employee costs will grow mostly in line with inflation, barring any exception where we make some, let's say, additions from a new team point of view or get into a new business line, right? So barring that, it will grow at inflation. Other expenses similarly will grow broadly in line with inflation only. In terms of payment gateway, payment gateway growth will be more linked to gross bookings and also to the mix between B2C and B2B. If B2C is growing at a slightly faster pace, payment gateway might increase at a slightly faster click, but payment gateway will be linked more to gross booking.

Got it. So, this is more variable, I presume. Yes. Thanks for clarifying this. This is from B2B.

Thank you. We take the next question from the line of Vinay from Hathaway Investments Private Limited. Please proceed.

Yeah. Hi, Guru. Just two data points. Your DIA downloads in this quarter were how many? And how have they grown from the quarter prior to this? And what is the MICE contribution as a percentage of your total B2B saved?

So, Dia would not be an incremental download. Dia is definitely integrated within the app itself and within the desktop. So, there is no incremental download that a customer needs to do for Dia. It's something which is now available and accessible to everyone.

But that's for the B2B you're talking?

Yes, for B2B and for B2C. For both of them, Dia would be available. okay so b2c also doesn't need to download no b2c if you download the app then there comes pre-embedded in it okay okay fine fine and mice as a contribution so mice you know while we don't call it out separately you know uh if i look at for the quarter and this would be a bit of an aberration from a quarter the way to look at mice you know the easiest way to reverse engineer that is to look at service cost because the service cost largely pertains to MICE. So if I look at from a service cost point of view, service cost in the current quarter was about 130 crores and MICE gross bookings would be, you know, you gross that up for 10%. That gives you an approximation of the MICE gross bookings.

Okay, okay. And just one point on this digital data, personal data protection rule.

You have so much of customer data with you how are you looking at complying with this is it going to be will you be ending up losing some customers because of this you know i'll you know i and then sit can also elaborate on that so dpdp is obviously an evolving situation right we are working closely with our corporate customers it used to be clear on the corporate side the data is heavily and it's all post consents.

So there is no data that on the corporate side we end up storing which is without consent from the corporate customers.

On the DTC side, you know, where data that we store is fairly minimal, it's more transactional as opposed to any personal data of a customer that we end up storing.

Not much of an impact.

No, not much of an impact. We work with some of the largest companies in the world. We have invested quite a bit in ensuring that we comply to the global privacy laws. We have a consulting company on board as well as our CIOs personally leading the project where we have phase one, phase two defined in terms of complying to DPDPA. So it's an evolution of something that we are already doing and we have fully committed from a resource standpoint to ensure that we are compliant because that's a very critical part of the differentiator that Yatra offers as well compared to other smaller vendors.

Thanks sir, thanks a lot. Just one last question if I may allow, if I'm allowed.

Sorry to interrupt, Binaya. I would request you to join back the queue as well as several participants waiting for this.

No, no problem. I understand. Thank you.

Thank you. Participants are reminded to you, please limit your questions to two per participants. We take the next question from the line of Naeem Patel from Bastion Research. Please proceed.

Hi, thank you for this opportunity. So, I had a couple of questions regarding our working capital. I know in the call you had said that we have disabled days around 21 to 28 days but I wanted to understand from the payable side that we had around 277 crores of payables in FY25 and I wanted to understand towards whom are these payables, autos, are these airlines or hotels, some more clarity on that and on the same front, what should we view them as a percentage cross booking value, RMSE or revenue? So that's the first question from me.

Sure. So the payables are linked, firstly, you know, just simply to the gross bookings and not to RLSE. That's the simpler question and clarification. In terms of, you know, the amount, these are amounts which are due typically to airlines, especially the international airlines and airlines which form a part of the BSP cycle, which is a banking settlement plan that some of the airlines are a part of. so this would be payable to them and it would be payable to hotels for future bookings and then there might be some gna suppliers as well but vastly it will pertain to air and hotel suppliers yeah thank you understood and secondly so from a from an independent research i found that there are like 2.4 lakhs hotels in india and out of which one third are branded and remaining are

unbranded and yatra itself i think has around 80 000 hotels in its inventory of course it's not possible to capture all of them but what is our uh like ceiling on that that we can get on our platform the number of hotels in india so you see the issue with hotels is not to get them on the platform right you know that's an easier one to solve for the issue which is there is that you also need to have the right demand generation engine for those hotels.

It's no point for us to go to, you know, dharam shalas and smaller hotels, which are like 500,000 rupees, where our demand is coming in from corporate customers who are looking for a slightly better quality product. Hence, today, the kind of platform that we have and the kind of inventory that we've onboarded is sufficient from our perspective for the nature of business that we are doing.

If, you know, the nature of business continues to evolve when we get into a stage where you know we are going deeper into tier 2 tier 3 markets and we are now looking at SME customers who need those kinds of hotels we will start onboarding them but for the time being I think we are sorted with that maybe just to add there to Dhruv's commentary in a year what we've seen about 75 to 80 percent of our overall revenue coming from 25 000 active hotels who have contracts with us so that kind of should give you a view to what percentage of the total inventory on our platform is actively trading with us and getting served to our country but we are adding we are adding a lot of

chains we are adding a lot of towns and tiers as well because now Yatra has made inroads into you know pharma and cement and other industries where there is a lot of corporate travel that happens to smaller towns as well so we are leasing up quality supply there understood and if i could squeeze another question our other operating income is like 11 to 12 percent of our rlsc and if i take it out of our pbt along with other income our pbt becomes negative so on i want to understand what expenses are we incurring on the other operating front and And how does it, how do we view on the PBT if I take both it and other income out, we are still on negative on that front. So, some more clarity on that would be helpful.

That would not be correct. You know, other income is about 4.7 crores in the current quarter.

Yeah.

Whereas PBT is 8.3. And if I look at, you know, let's say the last quarter, you know, PBT would have been in the range of about 17 crores and other income was about 5 crores. So it's definitely not the case where other income is what's driving profitability. There are two components to look at out here. I hope you're not looking at other revenue.

Other revenue will be things like advertisement income, platform income worth, which are core operating incomes for us. yeah so on that aspect itself that if I take away both other operating income as well as other income the core business about ticketing and hotel and packaging so if I take away those incomes from us and we are PBT negative so is our core income profitable at PBT level so that's what I'm trying to do yeah yeah when you look at other income right and I'm now not talking I'm talking about other operating income other operating income is core earnings of the company.

So if I look at the B2C business, for example, advertisement revenue that you generate on the B2C platform is an integral part of your earnings. If I look at, you know, the other components in that, which will be things like, you know, gift vouchers, contribution from partners, bank, those are banks, those are critical components of B2C earnings. So you can't exclude those. Those are, you know, that's how B2C platforms work. it's like saying on zomato you exclude the platform fee which is there and then assess the profitability those are core of you know components that's how all b2c platforms would work yeah sure that has just one clarity on that that how does that trickle down up to the abidda level so like we had around 16 crores in q3 so does that flow completely at abidda level or do we still incur some expenses for advertisement income the yeah yeah so there would be some expenses related to that which will be there but yes you know these would be things which will have a higher contribution margin could you quantify that in a broad range so approximately you know this would have upwards of you know almost 55 60 percent kind of contribution margin oh got it thank thank you very much that's all from that and that was very helpful thank you we take the next question from the line of rajit agarwal from milkeri investment managers please proceed hello thank you for taking my question a quick one on the expense management offering

there are established players who are offering a wide range of expense management platform which have a lot more to offer to a customer than a pure play travel expense so wouldn't it be better to tie up with them and you know instead of interning expense on a pure play travel expense platform evaluated you know so before taking up any project you know there is a very thorough review mechanism wherein we look at first of all whether that particular product could be in the periphery of what we offer as a core offering from Yatra and then post that we look at what's available in the market versus whether it's meeting our customers' requirements or not and you would see that in the expense space either there are global players who are too expensive for you know extensive adoption in India or there would be older technologies where they're looking at OCR kind of recognition of bills and things like that where they don't They are not LLM based so they are not able to support multiple languages. So we looked at a gap in the market and we spoke to our customers and they actually very strongly told us to focus on this area because they wanted one partner who could close the entire loop. So again going back to the entire flow, there is a company, a corporate, they have a particular configuration and a policy. They want a system which would be fully compliant to that. and finally where the rubber hits the road is where the expense gets booked for the travel and that is the that was the last bit that was not available from Yatra itself so they wanted us to be that partner who closes the loop for them and they wanted us to do it with the best technology and the latest technology possible so I think those were the the matrices which and this is the first quarter and our sales team took it and we've already converted eight customers in just one quarter. So we are very, very bullish that we qualify these eight customers. I think out of them, six of them are new customers. So they're not existing customers. That gives us more confidence that if we are able to bring in new customers who are not existing Yatra customers, then it will be an easier sell for us to take it to our base customers and convert them.

Right. That's great to hear. One question on the top line growth, and I'm just trying to link the commentary with the KPIs and you had mentioned that because of the subdued mice demand now one of the leading hotel chains attributed to their performance to a robust corporate and mice segment and during this quarter if a hotel chain is saying that I guess the volumes would have not suffered that much and even your numbers show good performance in terms of gross air bookings the total hotel room nights right now if i look at hotel booking value per night then that has come down and so has your take rate so how do i you know how do i just try so maybe i qualify that

mice actually if you look at the market dynamics is a very fragmented market so you know looking at a commentary of a particular hotel or a hotel chain or a property and trying to you know democratize that and try and look at overall trends in the entire sub-segment will be a very difficult one. As mentioned in the commentary earlier as well, MICE for each of the organization has a very different makeup. For us, MICE is a lot about very large customers of ours who trust us with their travel and hence they also want us to manage critical large group travels for them. So we would do very large group bookings and there will be a nuance of few of those customers maybe pushing their travel out by a quarter and hence that impacting our business. So that's not a reflection on the total mines industry and what other companies are reporting. I hope that clarifies.

I think just to add on the margin side on that, from a margin point of view, if you see yes you're saying the take rates have come down from 12.2 to 11.7 but our net margin you know our gross margin has actually improved from 9.7 to 10.2 and that is on account of the change in business mix so there is more business compared to let's say previous quarter which is coming from the corporate travel side of things which is maybe you know reducing the weighted average take rate because on corporate the take rate tends to be lower than consumer but because the bottom line profitability is better it's leading to higher gross margins

so effectively for us that's a very good change that's happening in the business I absolutely agree on that so that's exactly what I was trying to you know get a handle on you see the volumes have gone up the margins have gone up but even then the growth somehow has been lower and as you said that you know the 30 crores or 300 million of revenue would have got postponed, if we were to include that in Q3, then would it be right to say that the upper limit of revenue that could have been achieved is 287 crores. Is that a right way to look at it?

Yes, yeah. Somewhere close to 290 is where we would have been, yeah.

And that would be around 22 to 23% year-on-year growth. So would you have been satisfied or happy with that?

So in terms of gross bookings, yes. In terms of margins you know it could have been even higher so if and this is like a proforma that we are trying to build out right and that kind of proforma you would have you know upwards of 50% growth in EBITDA you would have like almost you know 45% growth in terms of that so yes that would have been obviously a stellar performance and that's where we were heading in the months of October and November.

Right all right sir thank you and thanks for taking my questions.

Thank you Ladies and gentlemen, due to time constraints, that was the last question for the day and would now like to hand the conference over to the management for closing comments.

And we would like to thank all of you for taking up the time today to participate in this call in what's been an extremely engaging discussion. We look forward to interacting with you on a one-on-one basis as well as we move forward. if there is anything that you require further clarification on please feel free to reach out to us or our IR team which is Valorem Investors thank you once again and with that we would like to conclude today's call thank you thank you on behalf of Dam Capital Advisors Limited that concludes this conference thank you for joining us and you may now disconnect your lines