Yatra 4Q26 and FY26 Earnings Conference Call

Good morning, ladies and gentlemen, and welcome to the Yadra earnings call. Just a reminder, you all will all be in mute through the conversation, and we'll give you all an opportunity to unmute yourself. If you need a question to the management after they have shared the earnings and the quarter details, do raise your virtual hand and we'll unmute you. To take us through and introduce the management, I have my colleague, Nitin Padmanapu. I hand it over to you, Nitin. Go ahead, please. Thank you.

Yeah, hi. Good morning, everyone. And welcome to the Q4FI26 earnings call for YASRA Online Limited. Please note, certain statements made during this call may be forward-looking in nature and are subject to risks and uncertainty. Actual results may differ materially. Today we have with us the management of the company represented by Mr. Dhruv Sringi, Executive Chairperson and a whole-time director and CEO Mr. Siddharth Gupta and Chief Financial Officer Anuj Kumar Sethi. Thank you all for joining, over to you Dhruv, Siddharth and Anuj.

Thank you Nitin and good morning everyone and welcome to Yatra's full year 2026 and Q4 2026 earnings call. Fiscal year 2026 has been a landmark year for Yatra. Despite some very significant headwinds that impacted three out of the 12 months of the year, it's the most profitable year in the company's 20-year history. This strong performance is a testament to the resilience of our business model, our commitment to innovation, the balance in our revenue mix, the quality of of our corporate franchise and the dedication of our teams. I'm very proud to announce our FY26 results. Our revenue from operations grew 27% year-over-year to INR, 10,065 million, while revenue less service cost, which is our gross margin, increased to INR, 4,824 million, a growth of 24.5% year-over-year, ahead of the revised guidance that we issued in Q3 of 22%. Adjusted EBITDA grew to INR 917 million in line with our revised guidance of 37.5% reflecting strong operating leverage. During the year, cash flow from operations also increased almost 10-fold year-over-year to INR 761 million for the year. On the corporate customer acquisition front as well, we added during FY26 163 new corporate customers with annual billable value of approximately INR $9,568 million, up from 148 customers and INR $7,475 million in FI-25. As Sid will delve further in his remarks, you will see that this number has been increasing on a quarterly basis, underscoring the continued traction in our enterprise travel business and the strength of our go-to-market execution. Online penetration of corporate travel is still less than 25% in the managed business travel segment, and as the market leader, we are well positioned to capitalize on this as the industry moves up the online penetration curve. We have demonstrated over the years that we not only have the ability to acquire customers, but with a retention rate of almost 97%, have the ability to retain them for a very long lifetime value. In our assessment, the current macro environment driven by a conflict which has impacted energy prices and disruptive travel in the Middle East and more broadly international travel does not reflect a structural change in underlying travel demand trends. It is a short-term glitch which the industry will tide over as soon as normalcy returns. Corporate travel demand in India continues to remain resilient and we expect recovery momentum to strengthen meaningfully in the second half of the year driven by revenge travel just like we witnessed in the years following covid that said the escalating conflict significantly impacted our mice and some parts of our international corporate travel business weighing in on the q4 results several q4 mice and international travel group bookings were either cancelled or deferred into FY27. Barring the impact of this, it was quite likely that we would have reported stronger results ahead of last year's performance. The current conflict and the balance of payments challenge has also heightened the government's focus on domestic tourism as a strategic player. The infrastructure base built out in rail and aviation, and even the domestic highway network bodes well for domestic tourism. Yatra, given its market-leading domestic hotel supply, we believe is extremely well-positioned to capitalize on this trend. We have enhanced our API infrastructure framework and our migration to the Google Cloud Platform has significantly improved our ability to distribute our hotel content to a large network of domestic and international partners. This is a highly margin-efficient business for Yatra and one that we expect to scale up further in the coming year. From a quarter's perspective, despite the headwinds, we reported resilient performance in Q4, especially in our core air and hotel segments. Gross bookings grew 8.3% year-over-year. Air passenger volumes grew 9.6% year-over-year, roughly 2x the industry growth rate, reflecting continued market share gains. Our hotels business continued its strong momentum, with room nights growing 36% in the quarter and gross bookings growing 9% despite the significant disruptions in mice. Total transactions increased 16.6% year over year, a strong indicator of platform activity and engagement. Our corporate business added 55 new clients during the quarter with an annual billable potential of INR $2,709 million, which is higher than the potty closures worth $2,234 million in Q3, demonstrating the strength of our sales engine even throughout a challenging environment. While there is a macro disruption outside our control, more importantly, the underlying demand from our corporate customers remains intact, and we expect a meaningful portion of deferred business to return as conditions normalize. Structurally, the outlook for India's travel and corporate mobility market remains compelling. India continues to be the fastest-growing major economy with strong investment flows across manufacturing and GCC's driving business travel demand. Based on the strength of our corporate customer base, our industry-leading hotel supply, and our AI-enhanced corporate travel technology, we remain confident of our medium-term growth stagger of revenue less service cost of 20 percent and adjusted EBIT of 30 percent with that overview let me hand you over to Sid to walk you through the details of our performance Sid thank you Dhruv good morning everyone the larger headline as Dhruv said is that Yaksa delivered its strongest performance in financial year 26 despite a volatile macroeconomic and geopolitical backdrop even as this year reflected only nine months of full operations. RLSE performance was ahead of our revised guidance of 22%.

In FI26, we delivered RLSE growth of 24.5% while adjusted EBITDA grew at 37.5% year-on-year, aligned with our guidance and reflecting strong operating leverage as well as disciplined cost control. This operation strength also translated in healthy cash generation. The free cash flow for the year stood at INR 761 million compared with cash generation of INR 73 million last year.

This is particularly notable given FY26 reflected only 9 months of full operations underscoring both the strength of execution during the period and our ability to outperform guidance while maintaining financial discipline.

Another achievement worth emphasizing is the balance nature of this growth across segments and lines of businesses. Let me start by taking you through the product lines. Across both air and hotel, Yatra strengthened its competitive position. The air segment delivered healthy TTV growth of 12% for the year to INR 61,874 million from 55,273 million INR last year while maintaining margin discipline. With passenger growth outpacing industry level throughout the quarter and the full year while maintaining margin discipline again. Our margins have steadily improved from approximately 2.7% in financial year 24 to nearly 4% in financial year 26. Reflecting a structural improvement in the quality of our business mix, we remain one of the very few players in this space to consistently expand air margins despite intense competitive pressures across the sector. The hotel and packages business also gained strong momentum led by strong TTV growth of 25% with standalone hotel margins also growing from 7.7% to nearly 9% driven by a strong business mix and improved monetization. With the government's continued push towards domestic tourism and infrastructure-led travel growth, our extensive hotel supply footprint across India positions as well to capture demand across major metropolitan markets and emerging tier 2 and tier 3 cities. Moving now to across lines of businesses. During financial year 26, Yatra added 163 new corporate customers with an annual billable value of approximately INR 9,568 million up from 148 customers and INR 7,475 million in financial year 25. This underscores the continued traction in our enterprise travel business and the strength of our go-to-market execution. It is important to note that corporate wins typically take three to six months to go live and ramp up to their full trading potential. This provides strong visibility into incremental revenue contribution over the coming year. Beyond our large enterprises win, we continue to see significant white space in India's mid-market corporate travel segment, which remains substantially under-penetrated online. To capture this opportunity, we invested in building a dedicated mid-market sales team during Q3 of last year, with early contribution already visible in Q4. Given the scale of the untapped market, we believe this segment can become a meaningful incremental growth driver for our corporate business over the medium term. Coupled with the fact that our corporate business continues to demonstrate exceptional sickiness with customer retention consistently above 97%, This positions us well for continued growth performance in our corporate segment. Our consumer business performed well through the year as well, demonstrating the inherent resilience of domestic consumer spending. The diversified nature of our operations and multiple revenue levers enabled us to navigate periods of disruption while continuing to deliver resilient full-year performance. During financial year 26, Yatra benefited from incremental demand from newly signed affiliates and partnerships helping us gain both air and hotel market share while further improving margins. This highlights the strong scalability of our API-led distribution model which has emerged as an important growth driver. Combined with our extensive domestic hotel supply network, it positions us well to accelerate growth in the periods ahead. We are seeing strong traction in API-led distribution with travel agents, affiliates and B2B partners increasingly sourcing hotel inventory through the Yatra platform. This allows us to scale transaction volumes efficiently while preserving margin discipline. We expect this trend to continue and any near-term softness in consumer demand during the first half of the year should be mitigated as the year progresses. Yatra delivered a resilient performance in Q4. As Dhruv said, with gross bookings growing at 8.3% year-on-year, air passenger volumes increased 9.6% year-on-year, approximately 2x of the industry growth rate, while total transactions rose 16.5% year-on-year. This quarter was impacted by conflict-related disruption, which slightly depressed air volumes and had a more pronounced impact on several MICE and International Corporate Group travel bookings, a number of which were either cancelled or deferred into financial year 27. While the category experienced temporary disruption during the quarter, we are seeing instances where customer preference is shifting from international to domestic programs, partially offsetting the impact. Importantly, we are already seeing signs of recovery with Q1 run rates currently trending approximately 20% above Q4 levels. We continue to view MICE as a structurally attractive category, given its close linkages to corporate rewards, engagement and incentive programs. Over the years, we have built strong execution capabilities and a broad partner network across domestic and international markets, creating a meaningful competitive advantage. Our gross margin, defined as revenue-less service costs, increased 4% year-on-year to INR 1133 million. As just said, EBITDA declined 34% year-on-year to INR 166 million. However, However, we still delivered a healthy EBITDA to gross margin ratio of 11.15%, reflecting the underlying resilience of the business despite near-term external headwinds. Our corporate business added 55 new clients during the quarter, with annual billable potential of INR 2,709 million, compared with 40 client wins worth 2,234 million in Q3. This demonstrated the continued strength of our sales engine, even in a challenging operating environment overall while the quarter was impacted by geopolitical uncertainty stemming from the west asia conflict we remain optimistic about our trajectory supported by our continued focus on scaling the corporate travel business the steady addition of new enterprise clients improving online adoption and the growing contribution of our hotel business within the corporate segment positions as well to drive operating leverage and drive and deliver gradual margin expansion over the medium term. Looking ahead, AI and automation remain a core strategic focus for Yatra. We continue to see encouraging adoption of AI-powered servicing capabilities across both consumer and corporate channels. Our continued investments in automation and successful deployment across customer touch points reinforce both operation scalability and long-term profitability. Our continued collaboration with Google further centers our technology ecosystem and supports product innovation across customer acquisition and servicing in past cycles are any indication periods of market disruptions are often followed by a meaningful release of pent-up consumer demand accordingly we expect the second half of financial year 27 to be materially stronger than the first half while macro challenges are likely to persist in the first half of the year we remain optimistic about financial year 27. Backed by structural growth in India's travel and corporate mobility markets, and we have first continued investment in AI technology, customer acquisition, hotel supply, and its B2E platform. As Dhruv mentioned earlier, we are confident of our medium-term growth, cargo of 20% RLSC growth and 30% additional EBITDA growth. Thank you, everyone. With that, let me hand over to our CFO, Anuj Sethi, to walk you through the detailed financial performance.

Thank you, Zidrat. Good morning everyone. For the fourth quarter of the financial year 2026 on a consolidated basis our revenue from operations decreased 14% year on year to INR 1890 million. A gross margin defined as revenue less service cost close 4% year on year to INR 1133 million. Our EBITDA decreased 46% year on year to INR 126 million translating to a healthy 11.15% EBITDA to gross margin ratio. As a result, a profit after tax decreased 46% year-on-year to INR $82 million. For the full year ended financial year 2026, on a consolidated basis, our revenue from operations grew 27% year-on-year to INR $10,065 million. Our gross margin grows 24% year-on-year to INR $4,824 million ahead of the revised guidance of 22.5%. Adjusted a beta of INR 917 million, a year-on-year growth of 37.5%, came in line with revised guidance. While a beta improved to 855 million, a year-on-year growth of 53%, translating to a healthy 17.73%, a beta to gross margin ratio. Profit after tax for the period increased 28%, year-on-year to INR 468 million. In terms of segmental performance, our air ticketing passenger volume increased 2% year-on-year to 5395,000 and gross air booking grew 12% year-on-year to 61874,000,000. Air gloss margin rose 30% year-on-year to INR 2449,000,000 with margins improving from 3.42% to 3.96%. Under hotels and packages segment, the hotel room nights grew by 16% year-on-year to 1936,000,000. However, gross bookings increased 27% year-on-year to 16578 million, while the gross bookings margins expanded 37% year-on-year to 1534 million, with margins improving from 8.60% to 9.25%. With respect to expenses, people cost has moved from 1481.98 million in financial year 25 to 1669.75 million in FI23 primarily on account of salary inflation, investments in technology teams, mid-market sales teams, the benefits of which should accrue over short term. The people cost has increased largely on account of change in share-based payments in quarter four on a year-on-year basis. Other expenses have increased largely due to increase in affiliate commission which is in line with increase in volumes and is margin equity. On the liquidity front, cash in cash equivalent and term deposits stood at INR 2230 million as of 31st March 2026. Further, the company generated cash flow from operations of INR 761 million during the year as compared to 73 million in FY25. With this, I would like to hand it back to the moderator and open up for question and answer session.

Thank you, ladies and gentlemen. We will wait for a few minutes to start the question answers, request all participants who have a question to raise their virtual hand and we will unmute you. Thank you very much.

So see first thing that I want to understand is how much of a my business is sort of driven by internationally because I mean Q3 was a major disruption domestically wherein almost everything came to a fault but despite that Q4 the impact on my seems to be much higher despite it being much more of a international regional enforcement that has happened. So just trying to understand this part, like how much of MICE is like driven by international travel and how much is domestic.

Good morning, Ankush. So in terms of our MICE business, firstly, just to put that in context, the average MICE transaction domestically versus an average MICE transaction internationally has almost a 1 is to 3 ratio, almost a 1 is to 3 3.5 ratio right because values are much higher when it comes to international travel so there is a disproportionate impact that happens on account of that secondly what also transpired this year particularly if you look at the destination that got impacted i.e. Dubai and Abu Dhabi these destinations in this quarter see very heavy pickup after Eid and Ramazan right So, you know, that's basically 20 days, 23 days of March, where mice typically happened in these destinations. So all of that lumped into this period, and that's the, unfortunately, the precise period which got disrupted. Secondly, what also ended up happening in this quarter is that as airfare rose on account of the conflict, mice travel which was happening in certain parts of Europe right that became more expensive and that also then negatively impacted margins because you know the price at which you're selling is fixed and then your cost input cost is going up on account of this right so those were the two factors which disproportionately impacted this going forward what we do expect is that in the current quarters as Siddharth mentioned we've already seen recovery happening people have started looking at alternative destinations we've seen

Southeast Asia pick up we've seen domestic pickup and on a run rate basis we are already 20% higher than the previous quarter just to just to add to Dhruv's answer Ankush you know mice overall ecosystems responding to the changes that are being thrown up. We have ourselves hugely now built capabilities to go to other destinations which don't require you to pass through the Middle East or the conflict region. And also domestically we have again based up our capabilities to respond to this. So as I mentioned during my narrative for Q4 and financial year, we are already seeing in this current quarter much better traction compared to last quarter. So I think the fact that my business is inherently linked to reward and engagement of employees and the ecosystem, I think companies are going ahead with my spend. But it's just that this was a temporary blip which we have overcome as an industry.

The second thing that I want to understand is, would it be possible for you to give some sense how much of a corporate business is being driven by headline IT services company? I mean the concern largely with our business is that if the IT services get disproportionately impacted with all these AI things, because our business is much more corporate driven versus other OTs which is like B2C the impact for us would be higher so if you can just give a sense like how much of our B2B business is driven by this IT services as an end consumer.

Maybe you know Dhruv could add to this but if you if you look at our history and when we started focusing on B2E as a segment a fairly high percentage of our overall B2E business used to be coming from some of the largest IT IT services companies but over the last three to four years with the prolonged you know slowness of the impact on IT services has been there for the last three to four years now IT IT services constitute only about 10 to 11 percent of overall B2E business that Yatra has and other industries have got a much larger share now and hence the The impact of AI and on IT services is kind of baked in onto our B2E business already. We have significant business coming now from consulting companies which form a very large part of the business that flows through our platform on the corporate side. We also have newer industries like pharma, automobile who have become a significant part of our overall B2E portfolio as well. Dhruv, you want to add to that?

Sure, Sudh. So, in FY24, right, during the time when we were going public, IT services accounted for about 20% of our business. Today, as Sid mentioned, they account for just a shade under 10% of our large corporate business. If you were to factor in the globe acquisition, if you factor in the MICE business, which are alternative revenue streams that we've built, the share of IT services in our total B2E business today would be about 7 odd percent. So that number has come down pretty meaningfully as we've gone about diversifying our business beyond just the initial segments of IT and consulting.

That's great to hear. That was all. Thank you. Thank you. Great. Madhur Rati, over to you.

Sir, thank you for the opportunity. Sir, I wanted to understand regarding the air travel segment and this air ticketing, sir, the first question was, sir, how should the economics or the gross take rate change with adoption of the offer and order model versus the GDS model? Will the economics be better or will the take rates be better going forward for us? And the second question was the discounting that we give. So the gross, the discounting we give as a percentage of the gross stake rate has increased from I think 34-35% 3-4 quarters back to closer to 48-49% currently. So why is that? So if you could help us understand on these two things.

Sure. So if you look at firstly the stake rate, right, and we mentioned this in our prepared remarks as well, we are, if you look at us amongst the OTAs, going to be the only one who's actually over the last three years consistently improved their take rates. The reason the take rates for Yatra, the next take rates for Yatra are improving is because we are working more and more towards the enterprise side of the business. Airlines are also keener to partner more with enterprise travel platforms than with the B2C platforms you rightly pointed out that there is obviously a bit of a structural shift which is happening in the air distribution with airlines on the b2c side trying to go more and more direct so you do face that scenario more on the b2c side of things however on the enterprise side airlines want more and more share of enterprise business an average enterprise customer spends about 50% more than an average b2c customer on a per ticket basis hence the realization for an airline is much better from an enterprise traveler airlines don't really make that much money of a b2c traveler who's booking 30 days in advance and booking the cheapest fare airlines typically and this is not just in india this is a global phenomena airlines and hotels will typically make money from business travelers who are booking at the very last minute and are booking, you know, fares which are going to be more flexible, fares which will be more focused on business and first class. That's where the airlines typically end up making money. Hence, the takeaways for Yatra should remain consistent, irrespective of the kind of macro shift which is happening on some of the direct-to-customer channels. Enterprise is a managed business, so we don't see the same kind of impact on the enterprise side of things. To your second point on the discounting, while the discounting optically might have gone up, the thing to look at is the net take rate. The net take rate has continued to improve.

I'll just add to that. If you look at our gross take, which was in the range of about 7.7% overall, it's improved to about 8.1%. Our air gross take has improved from 7% to 7.1% in 26 from 24. And then if you go down, as Dhruv said, you know, discounts might be optically saying the wrong things. But if you look at the net margin, the gross margin that we make on our air ticketing business, we would be one of the only OTAs which have improved our air gross margin from 2.7% in 24. consistently we came to about 3.4 percent in financial year 25 and this year we are at 4 percent so we are consistently improving there which shows that our leaning towards b2e is helping us improve our margins for air business yeah got it and since my second question was on the value added service that we are expecting to provide like a expense management or or some other value-added services that we can integrate with our platform where are we on that in terms of adoption as well as displacing the existing vendors or product providers for these products yeah so maybe i'll start there and who can add see as you know we are one of the largest B2E players with more than 1,300 odd large enterprises who use us for their corporate travel program and two large upsell opportunities exist for Yatra. One is the expense management piece which is a new solution that Yatra has launched which is anchored around AI and in Q3 I announced that we have got eight new ones. So Q3 was the first quarter where we had one full quarter of recap being available for us to sell it to our customers very happy to announce that we have added another eight new logos to that kitty and we've already gone live in four of them last quarter so i think this upsell opportunity is really playing out for yatra it is not so much from a from a marker of a revenue but overall once you do expense management along with travel then the stickiness of our engagement with our customers really, really goes up. And as I mentioned earlier, we have a net dollar retention of nearly 97%. So recap is going to add more to stickiness of business in our B2E space for us. The other upsell is if you look at our overall MICE business, I think overall revenues from MICE last year, about 15% to 17% of that would have come from our base account. So, there is a huge potential for us to upsell in our existing base accounts and we are pursuing that with a very, very sharp focus across our go-to market in the financial year, in the current financial year.

Thank you. Madhu, just a quick pointer to your first part of the question. In FY23 and FY24, our air discounts were hovering around 61% of gross take, whereas in FY25 and FY 26 they are at about 47 48 percent so there is actually a meaningful improvement in the ratio of discount to gross state as the business has moved more towards enterprise travel also do we have any number like like any figure like this would be the ideal ratio that we would like it to take 40 percent or whatever that number might be so if you look at just the way our business is trending more and more towards corporate with enterprise travel growth outfacing

b2c travel growth mathematically itself it's likely that in the next year or so this number will become closer to 45 percent and continue to optimize got it so uh if i look at your investor presentation q4 and q1 were these anomalies or some serenality there because this was like 35 I'm just getting a clarification, I'll get back in with you after that. Yeah, so the 35% was there, this one-off during, I think, Q4 and Q1 of FI25 and FI26?

So if you look at Q1 of FI26, Q1, you would recall was Operation Sindhuur and Pulwama and all of that, right? So there was significant amount of disruption and the Air India crash, unfortunately, also happened in that quarter. So, there is a significant amount of B2C disruption that happened in that quarter. That's why discounts in that particular quarter were abnormally low. That's it.

Otherwise, the trend you'll see in the remaining quarters, including Q4, it's at 48%. Dhruv Sitalani, please go ahead. I did announce your company name as well. Mr. Sitalani, are you able to hear us? You can unmute yourself. Am I audible?

Yes, you are, sir. Thank you.

Thank you for the opportunity and congratulations on a strong full year despite a tough Q4. I wanted to ask about corporate restructuring. So we saw that THCL, the holding company above the India listed entities, hold about 1.8% stake in Feb 26. Two questions on this. First one is the internal NCLT merger of the six subsidiaries done as of December 25. but the larger holding company simplification that is collapsing the KMN and suppressed layers into a clear India structure. Is it still going on and can you give us any sense of where this stands and a rough timeline for completion as well?

See that process is still going on. The reason THCL sold these shares was to fund itself from a legal and legal cost point of view to be able to do that collapse process. It is a process that entails multiple jurisdictions. We've got, you know, jurisdictions of India, obviously, and then Cyprus, Singapore, and came up to deal with. But given that, you know, we've gone ahead now and capitalized that entity as well with a little bit of liquidity to take care of all these legal expenses, that could be an indicator that, you know, we are making progress in that direction. I think beyond that, it will be difficult for me at this point of time to give you anything more concrete given the complexities involved in the process.

Okay, thank you. That was really helpful. And second, given that the holding company already had to sell shares once to fund these costs, should we expect any further stake sales or does the holding company have enough liquidity to see the process through it without further dilution to the NDR's entity promoter holding?

See, to the best of our knowledge and understanding, what we have sold at this point of time from the holding company should take care of the entire cost of the process. We do not expect to come back to the markets anytime in the near future to do another sale.

Dheeraj, please go ahead.

My only request is that when we unmute, please let us know your name of the organization. It will help us. Thank you very much. Ziraj, I've unmuted you. Please go ahead.

Hi, this is Nirvan here from Padreanath Holdings. My mic got muted, so I assume I can ask my question. Yeah, hi, Dhruv. So my first question is on, you know, agentic AI penetration. We have heard a lot about this in the last few months. Some industry predictions are saying that by FI 30, you know, 30% of transactions on fast, fast, et cetera, like travel could be done by agentic AI. So my question is, how important is this going to be towards your ad revenue that you earn from the website? Because if humans are not going to look at the website increasingly, is that a threat and how are you seeing it and how do you expect it to play out?

Sure. I'll start this response and then maybe Siddharth can also add to this. For our business, we are much more obviously focused on the enterprise side. On the enterprise side, you know, the customer sits behind a wall garden. There are multiple other processes, business processes, and, you know, multiple other rate configurations that come in specially for that corporate customer. So we don't think here the booking process will move to any platform beyond people like us who are doing the vertical SaaS component out here. But where the AI will help us tremendously is in automating our own business processes. We have our own internal project also going on, and Sudhak will talk a bit more about that, where we are tremendously working on optimizing our business processes using AR, and the results of that are extremely encouraging. On the B2C side of things, on the B2C side, yes, there is a likelihood that we might see demand patterns shift from the likes of Google and the meta platforms, which are today the primary drivers of demand, onto the bot platforms from where the traffic will come in. But the traffic will still come in from an execution standpoint, we feel, onto platforms like ours. Advertisement revenue for us is a relatively small component compared to a lot of our peers. So for us, it's not really something that we feel would be majorly disruptive because there are certain other avenues through which we are able to, I feel, recoup that. Avenues like, you know, working together with hotels to optimize and prioritize certain hotels, put in place certain sponsored listings, etc. Yatra, these are some models that we are trying out using data analytics, which will, I feel confident, help us offset the little bit of impact which might be there on the advertisement revenue. So that's not a key driver for us. Siddharth, maybe you can add a bit more about the stuff that we are doing on AI, which is more accretive for the company.

Yeah, I think just to add to what Drew said, you know, from a first principle basis, Yatra was one of the first movers to put the data model and the data structure in place which helps us not only to write better more efficient machine algorithms but also to train our own bots so we have a research lab equivalent within Yatra which is continuously working on the DR bot that we have which is consumer thing we also have a self-booking bot which is our corporate user facing so our ability to, you know, go through the travel data and then learn from it and then respond back to all queries from our customers, whether they are B2C customers or our B2E customers, our ability to create itineraries for them, which are personalized and fit their travel needs is very, very high. So we are fairly high on that learning curve. When it comes to investing in our platform to make sure that we are agentic ready or as they say headless SaaS ready we are hugely invested in that process as well and as Dhruv said because our leaning is so much towards B2E we actually are not feeling threatened by demand coming from a different channel for us if there is an agentic demand coming our way we want to be as ready as possible so that they became they become one more of you know demand source for us so earlier we used to you know look at organic demand coming through seo sem and this could get added as one more demand source but we want to play on our product and technology strength our ability to you know add more and more supply both from air and hotel standpoint and our ability to personalize and execute that transaction that the agent is bringing on our platform so i think that way we are fairly high on the learning curve, well prepared and investing quite a bit for making sure that Yatra always remains very, very relevant in the travel space, both for B2C as well as for B2E traffic.

Sure, one quick follow up on that, if you can let me know the advertising revenue in FI26 and what it was in FI25 and if you can tell us what percentage of that flows through to EBITDA, I assume quite a lot of that flows through to EBITDA directly.

See, we don't call out our advertisement revenue separately, right? It's part of our other income. But all I can say is that from a materiality point of view, it is not really going to be very material to the overall earnings. There are, you know, pure advertisements like you would define based on traffic. That is fairly minimal. There is different kind of advertisement revenue which we get, which is like partnering with the banks, partnering with the tourism boards, partnering with the airlines. That is separate from any pure traffic-led advertisement, which is likely to get impacted by things like this. So, short answer to that is that we don't think it is a material amount for us. and anything that we would lose sleep over.

Sure. My last question is on the...

Thank you, Mr. Nirvan. Sorry, can I ask one more?

I just got an opportunity to ask one question.

I think, can I request you to come back in the queue? I have Dheeraj and we have a few more. I apologize to be rude. Yeah, thank you. Mr. Dheeraj, I have, I will ask you to go ahead. My apologies.

Yes, my apologies earlier, we couldn't get you on this. yeah so please go ahead do let us know which firm you are from yeah i come from alphaspur so through my question is basically today how much of our business is contributed by b2c vertical and uh what is the i mean are we is it uh profitable today or how much loss are we making from this vertical if you can just give out some details here.

So in terms of gross bookings for the full year B2C would be roughly about 30 in the early 30s from an overall business mix point of view and it's definitely not loss making it's you know it's profitable that's the way we've been running it and part of our efforts over the last two three years right the reason we took a hit in terms of volume in FY25 was on account of us readjusting our B2C business to make sure that we were unit positive on every transaction. So we don't have a situation where B2C incurs a loss. B2C is making a reasonable amount of profit. Obviously, B2C profitability will always be lower than the enterprise profitability. But from an overall contribution point of view, it's about early 30s in terms of gross booking and about you know mid to high single digits of operating margin.

But you know my question is basically if you see globally you know pretty much this is a duopoly structure right and B2C business is so hard because in other days there is something called you know that flywheel effect which kicks in even if you see in the US or in China etc why are we even because today I'm assuming we are like say third or fourth player in the b2c space why are we trying to really put our efforts into this vertical rather we can actually focus this completely into the b2b vertical because I mean ideally we are probably the market leader at this point of time even if we compare it with make my trip today so what is the core motivation for us to even like invest this money into the b2c vertically

See, just to be clear, we're not investing into the B2C vertical. B2C vertical, you know, generates a meaningful amount of free cash as well, right? So it doesn't consume any capital from our perspective. It's both contribution and EBITDA positive. The incremental volume that comes from the B2C side of things helps us get better deals from the suppliers. The B2C element and the B2C band rub-off allows us on the corporate side to cross-sell personal travel to the employees. So there are meaningful benefits which accrue of having the B2C part to the business. If it was a case where B2C was causing us to invest incremental amount of capital into that business, then maybe we might have taken a different call.

But today, that business is very well positioned to be able to sustain itself with decent market volume-led growth with a reasonable amount of profitability. anything else that you would like to add yeah maybe just to add to that you know you will have to see our business from a first principle basis where the product and the technology platform that we have we are investing in that to ensure that our ability to add more suppliers faster our ability to dedupe and give out results with lowest latency with the flushes cash and our ability to personalize uh both on the air and the hotel front so you know there's a huge amount of first principle investing happening in ensuring that dyatra is highest on the innovation curve from a first principle basis and frankly moment that happens moment uh you are the fastest platform you have the deepest inventory and if you are able to personalize the best and if you have a solid API framework on top of it to ensure that any demand source can consume your output better than the competition, you know, every line of business starts profiting from it. And hence, the investments that we are doing on the tech front, which might be getting us better operating leverage from B2E is also having a cascading impact on the business that comes to us from our B2C demand sources and from our affiliate partners and any other partnership which doesn't, you know, doesn't need too much of marketing spend from our side and hence contribute positively to our bottom line. So, I think that's broadly the flywheel that's playing for Yatra.

It would be great if you can actually segment B2B and B2C in the presentation as well so that going forward we can we can probably slice and dice it better I think that could be anything yeah I think as Siddharth mentioned there is still a significant amount of you know interplay between the two businesses especially when it comes to things like technology and product so it's not as simple to just you know do a segmental reporting for us as it might be for someone who has a more more discreet and more segregated business. So that's part of the reason why we don't do this. But, you know, at a gross booking level, that's something that we will try and see if we can start putting that out more consistently.

Thanks. I'll move to the next question by Sonal Minhans. Before I move to Sonal, I will request all participants to kindly, you know, in the interest of time, keep their questions to two questions. And do mention the company that you belong to.

Go ahead, Sonal. you can unmute yourself am i audible this is sonal menas from pca capital yeah you are you are audible thank you thank you uh good number group and team and thanks for giving me the opportunity i have two questions first one was you've given a guidance of revenue of around 20 percent for the for this financial year uh is q1 this year looking on similar lines better than q1 last year uh and what gives you the confidence given that uh we the demand is still a little

somber and you didn't mention that the domestic uh travel is actually substituting the international travel and that's a smaller ticket site so just want to understand that the first so just to be clear on the guidance that we are giving out it's not even a hard guidance that we are giving out right so the indication that we are giving is that our medium term chagas so if you recall and if you've been following Yatra, you'll see that over the last couple of years, we've been talking about a 20-30 model, right? 20% growth in revenue-less service costs leading to 30% growth in adjunct-to-debita.

We are saying that model remains constant.

And if I was to look at this on a CAGR basis over the next, you know, median term, let's say a two to three year horizon, we will see this CAGR being maintained. Now, there might be short-term disruptions. So, you know, to your point on Q1, Q1, given that we've already seen two months of the quarter play out, would remain a bit muted. But it's not to say that in the second half of the year, as things normalize, the recovery won't offset the drop that we have in Q1. So, it's more of a medium term kind of view that we are taking on this and using the current quarter and the last quarter more of an aberration as opposed to something that will pay out going forward as well.

Got it Dhruv. Thanks for clarifying that and explaining that. Second thing again congrats on improving your working capital receivable days. I just wanted to understand, is that a tip because Q4 was kind of somber or is that DL working on actually improving the receivables? Partly this and partly that, but just want to get your take on how the receivables have actually improved.

No, I think that's more of a structural thing where, you know, Siddharth and team have been making strong inroads in terms of, you know, optimizing and streamlining the working capital cycles so we will continue to see improvement happening if you look at it on an annualized basis we will continue to see optimization happening in that when it comes to the receivable days that's a key focus area for us because we know that's the key determinant to the ROC so you will continue to see optimization in that I I think one of the core differentiators any B2E setup has, one of the key differentiators is your ability to manage working capital.

And as I said, you know, investments are happening in the tech platform, but we are also using our expertise to automate internal processes, which help us, you know, shorten the cycle of delivering a service, invoicing it and collecting it from the customer. So, I think there is a huge focus across our B2E team to ensure that we not only sell more, we monetize more, plus we collect more and faster as well, so I think that cycle is playing for us.

Thanks for explaining that. I just have a follow up on this one, like if you have a near term guidance or a medium term guidance for the sales and the EBITDA, is there a near term guidance for Rootsie?

We should also anchor ourselves to, we are around 5,5% obviously right now. from a two-three year perspective like is there internal milestone you have absolutely so if you look at our roce right so uh last year we were you know around four this year you know we are closing close to about six had the disruption not happened our indication was that we would be somewhere in the seven seven and a half percent range or if you just see from a trend point of view the way our business is structured our incremental roce is extremely high because for every new customer who comes in given that a large part of our cost structure is fixed our technology investment has been done to a great extent and we deploy only a few frontline staff for exception handling our incremental roc is very high so we would expect that in the next three to four years we want to get to a you know high teens kind of number when it comes to roc and that's something that should just mathematically follow as the business continues to scale up and we continue to optimize our working capital cycle. Got it.

Thanks a lot. Thank you.

Thanks. My next, I will request Mr. Aditya Kumar to unmute himself and do let us know which firm you are from. Thank you. Go ahead with your question, sir.

Hi, thanks for the opportunity. I'm Aditya from Old Bridge. Congratulations team for the good set. My first question is on the hotels business so what has happened this quarter is like on a q1 q basis or even a y-o-y basis our average realizations per room night has dropped and commensurate to that I think our gross margins have also dropped over the last quarter so last in the last q2 and q3 we saw discounts being very low for the hotel systems but again it's at Instagram around 17% so two things on why the realizations have dropped what has happened there what's the what's the uh happening in the back and second on the uh discounts part what's leading to a q1q jump on the discounts

front uh i'll start off on this and that can then build on it as well so if you see from a room nights point of view yes room nights have grown uh very strongly at 36 percent and gross bookings have grown at nine the average realization which has come down is also on account of part of the the mixed change where we've seen in the current quarter more affiliate business more domestic business coming in as opposed to you know mice business which has got disrupted so transaction values for international travel and mice are significantly higher than the average transaction value for domestic business right so that's been the key driver why you have a situation where

today you know your average hotel room night has come down meaningfully that's the only thing which is there it's more of a you know just a short-term disruption where the business mix got changed more in favor of affiliate versus mice we should as you know the year progresses see that normalizing okay okay and yeah yeah yeah nothing more to add through i think i think it's pretty evident it's the it's the revenue mix uh and uh uh largely standalone hotels have uh given a very good growth about 32% year on year and and margins have improved there as well but it's just the mice impact in a particular quarter which is pulling the numbers down.

Okay second part on the discounting right which you were referring to right that's also largely to do with the change in mix only nothing again from a structural standpoint it's just the change in business mix given that, you know, you've got higher amount of affiliates and B2C as opposed to MICE and B2E where the discounting does not exist or is at very nominal levels.

Okay, so any particular target number we have for discounts, like if things normalize and the MICE number that we are targeting and the mix that we are targeting, what kind of discounts should we be baking in for hotels?

And so if you look at, you know, from a discount to our revenue, right, or discount to gross margin kind of ratio, that was, you know, last year, I think somewhere close to about 75%, right? And in the current year, that number is hovering close to about, you know, 85%, which is predominantly on account of the last quarter. we feel post the current quarter we will start anyways as Sagar mentioned this quarter itself we're seeing a 20% improvement Q1Q and MICE so you will see that optimization happening in the current quarter itself and we feel in the second half of the year we'll be again back to the 75% or lower kind of number only Alright, alright I'll just ask you a bookkeeping question what would be the MICE business for FY26 as compared to FY25 total you know we don't really call out the mice business separately but you can look at the the revenue less service cost at a good indicator of the trending in the mice business right a large part of the service cost comes in from the mice business only and if I point you to the service cost, the service cost went up from like 400 crores in FY25 to about 525 crores in FY26. So that plus a markup would be the equivalent of the gross bookings of mice.

Mr. Gautam, I've unbuted. Please go ahead and let us know which form you are from.

I'm an HNI investor. so thank you for the opportunity i just uh wanted to ask you know we have been saying that a lot of mice companies are getting listed and many have many of them have also filed drhp so you know are we expecting you know some kind of competition from them in the future or are we you know operating in a in a place where we will not be affected by them see mice is a very large market in India, it's still highly fragmented, the number of organized players in this category, right?

And we would be, I think, at this point of time, the second largest player in the category. The number of organized players are only a handful. When it comes to mice as well, especially large mice of reputed companies, they want to work with a partner who has the wherewithal to handle things if something does go wrong, right? As we've seen in these kinds of disruptions, our ability to be able to handle exceptions is much better than any of our peers. And when it comes to large customers, that is a very important aspect for them when it comes to MICE execution. We've also built out a deep distribution network and partnership network with DMC's destination management companies which focus and specialize in mice across the globe whether it's in Europe whether it's in the Middle East whether it's in Southeast Asia these are deep relationships and expertise that we have built so while I understand some smaller mice companies are also looking at going public we don't think this is something which will meaningfully you know disrupt us in any shape of call just to add to that i think the larger market size of mice is you know our approximation is about 35 000 crores i think the organized market

is uh maybe about 10 percent or less and uh as i said earlier uh if you look at our mice business itself you know we are about 10 to 15 percent of our installed bases where we have sold mice our capabilities to deliver very high-end group travel you know married to an event that or impactful event that our customers want those are the kind of capabilities that Yatra has built over the last four to five years in this space it's a differentiator very difficult to replicate even if there are newer players who are coming in. Again, I wanted to highlight that, you know, these group travels have multiple complex events that need to happen together. For example, if you're taking, you know, 500 to 1,000 people from India to any other location, their visas, if the visas don't come on time, then they would not be able to take the flight. If the flight disruption happened, then their hotel itineraries and their ground support itineraries will change completely. So it's an ecosystem that needs to be managed every time a group travel happens. And Yatra over years with their disciplined execution and we've become an entity of repute in this space. It's a place where we believe we've got enough mode to ensure that we keep growing and don't get impacted by newer players coming in. But that said, we are fairly agile.

We want to build more capabilities using tech in this space and we make sure that we keep leading this space. okay that sounds really good so just to follow up uh you know someone else also asked this uh you know sir it would be great if we could see different uh you know like numbers for different segments like mice and b2b and b2e b2c that would be really great just just a suggestion though thank you so much uh you know suggestion taken we'll try and work on that going forward Thanks.

So, before I move to the next participant, just a reminder, if there are any more questions, we're ready to take a few more questions. Please do raise your virtual hand and we'll unmute you. I'm now going to next to Mr. Taysha. So, please unmute yourself.

Yeah, thanks for the opportunity. This is Keshav from Nivesha. Hope I'm on the phone.

Yeah, you are.

We can hear you. So, like, my question was broadly on the AI side. Like, additionally, like, are we planning to integrate with these large LLMs or potentially build up our own NCPs since, you know, the majority of these enterprises are now adopting this, you know, LLM 30 enterprise level. so you know it would be much easier like if we build an mcp and then if these guys want to book anything uh online so what what are your thoughts like sure so the mcp protocol has already been you know worked upon we've been doing this now for the better part of the year we've been working on the mcp protocol from an integration standpoint uh you will see some of that all you know in the

very near term because we are working with the LLMs to be able to provide them the requisite information that they need. What Yatra has done is that our focus and I think both Siddharth and I touched upon this has been on improving our API infrastructure as well. While the NTP protocol is what's connecting you to them, the underlying API and the micro API infrastructure also has to be you know, agile enough and strong enough to be able to support the demand patterns, which is coming in from there. And that's where we think we are very well positioned given the work that we've done over the course of the last 12 months. So, I think that's a good question, a good opportunity for us, and we are actively working towards it. So, that's any more color that you would like to add?

Yeah, I think just to add, you know, we have worked on the MCP protocol, But along with that, so you would hear from us very, very soon, you know, in a matter of a couple of weeks, a lot of innovations that we would come to market with. On the back end, as Dhruv said, you know, Travel World has got a lot of internal systems and, you know, talking to external back end systems at airlines, at intermediaries, at hotels where we need APIs to call the right event to happen. So, I think we've tried to pick end-to-end processes and we are actually automating that using a very strong API framework. And then finally, the last one is the MCP protocol where we want to make everything available for an agent to do directly on our platform. So, I think the entire continuum you'll see across financial year 27, a lot of announcements coming our way where we'll keep adding more and more functionality which can be done by an agent directly onto the Astra platform. yeah that would be helpful and also my second question was like on the b2a segment like which geography are we seeing the like you know the strongest growth coming like which regions yeah frankly uh you know this is again as bro said earlier uh corporate online travel is penetrated only about 23 to 24 percent so there's a huge headroom for growth across all regions and uh So that's why you see such robust number reporting by us every quarter where we are adding 40 to 55 this quarter. We've added 55 new logos with the annual billable potential of nearly 270 to 180 odd crores every quarter. So last full financial year, if you see, we've added 163 new logos with nearly 1,000 crore annual billable amount. So there is a huge headroom for us to grow corporate business. We are nowhere close to penetrating it to the levels what we've seen in the consumer side of things. You know, frankly, obviously, you know, we are headquartered out of Gurgaon. So hence, our corporate business has a significant component coming from north of India, as well as obviously, you know, Mumbai being the corporate capital of India. We have a large chunk coming from there. We are working very hard on ensuring that we penetrate south more as well. And especially with the mid-market, go-to-market firing for us now, we believe that our growth would come from all across India. So maybe growth would come a lot more from a step-change perspective from the south side because we are underpenetrated there, but it's fairly democratic in its spread across India.

Got it. That's all from my second conversation panel. All the rest for the next day.

Thank you.

Thanks, sir. Mr. Nirvana, I think you can go ahead. I've unmuted you.

Hi, thanks for the opportunity again. So, I wanted to ask a question on what's happening on your corporate credit card initiative, where I think at some point you had said that you would look forward to more tie-ups and also maybe launching something branded Yatra. so just wanted to understand how much of a priority this is for us to reduce receivables is it a genuine lever for us to be able to do this and secondly if it is how difficult it actually is because you have to I think go to every account and convince them to transition to a credit card solution if they are not in it so how practical is this and how how much of a focus as an organization do we have on this and the last bit on that is will there be a will Will there be an impact on our take rates, our next take rate if we do implement a corporate credit card solution like the denominator of our ROC will go down, but will the numerator also go down?

So this is a, you know, we now have the teams also in place, right, including the leader who is coming from this segment, who is heading this exercise. So this is something which we are hopeful that within, let's say a quarter or two on the very outside we will have a product which will be ready to go to market right there is a platform also which is being worked upon with this team to do that kind of integration where you know the flows can work seamlessly for the customers it is an important area and it will have a meaningful positive impact but you're right that it will improve gradually this is something which has to be on and sold customer by customer and then there is an implementation process in the customer And the reason it takes, it's not as straightforward is because of your second question. There is a certain mix of customers who will have a particular airline mix, and then we have to partner with those airlines to make sure that the airlines are giving us relief on the credit card fees. Because if we don't get relief from the airlines on the credit card fee and we end up absorbing them, then it does impact the numerator as well. So while, you know, the denominator of the capital employed comes down, the numerator also gets impacted by the payment gate charges. That's the reason why it has to work in tandem between the airline and us to make sure that on a customer-by-customer basis, we are able to do this and create a proposition which doesn't leave us holding that cost and also, you know, make sure that we end up optimizing our working capital receivable cycles. So, it is slightly complex, but it is a key focus and priority area for us with a team in place now.

Sure, and what about the hotel side?

Is it also as complicated as tying up with the airlines on not taking an impact on the See, on the hotel side, there is, you know, a virtual credit card platform which is already in place and we've already implemented that. So, hotels is a bit easier. Hotels has a different challenge. hotels you're dealing with a myriad of mid-year suppliers as well a lot of whom might not be fully digitally savvy right so there the implementation process is a bit different even though the the the commercials are simpler and easier to implement understood understood uh that will be all thanks thanks thanks everybody uh sir we don't have any further questions so before we end the call Firstly, I would like to thank the management of Yatra for giving us the opportunity and

I would request you all to make a closing statement before we end the call.

Sure. Thank you. Yeah. Thank you everyone for being on the call. We would just like to reiterate that while yes, in the near term and in the last quarter we've seen a little bit of disruption, but this does not in any meaningful manner change the structural business of Yatra. Our momentum when it comes to new customer acquisitions on the corporate side, our retention of corporate customers, our margins, our ability to implement AI to continue to enhance and optimize our business, all of those remain strong. and we also feel that mice will benefit significantly in the second half of the year from revenge travel. We've seen this play out before when it came to COVID as well so we don't in any way shape or form feel that this will have a lasting impact on the business. This is a very short-term blip and you know greatly appreciate the support that all of you as shareholders have shown to us. Thank Thank you for that.

Maybe just to add to Dhruv's, you know, closing remarks, if past cycles are an indication, I think periods of market disruptions are usually followed by a fairly meaningful release of pent-up consumer demand, so accordingly, I think all of us at Yatra, we expect second half of financial year 27 to be materially stronger than the first half, and hopefully, you know, we would be on the right track going forward, yeah. Thank you so much for your time and support for this call.

Thank you, everybody. With that, you may now hang up.

Thank you.