Operator
Hello, everyone, and welcome to Yatra's First Quarter Fiscal 2027 Financial Results Call for the period ended June 30, 2026. I am pleased to be joined on the call today by Yatra's Executive Chairman, Dhruv Sringhi, CEO, Siddhartha Gupta, and CFO, Anuj Sethi. The following discussion, including responses to your questions, reflects the management's views as of today, August 13, 2026. we do not undertake any obligation to update or revise the information. Before we begin our formal remarks, let me remind you that certain statements made on today's call may constitute forward-looking statements which are based on management's current expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially. For a description of these risks, please refer to our filings with the SEC and our press release filed earlier this morning on the IR section of our website. With that, let me turn the call over to Dhruv. Dhruv, please go ahead.
Thank you, Ellen, and good morning, everyone. Thank you for joining us on this conference call to discuss our first quarter ended 2027 earnings. As you might have seen in social media and our marketing campaigns, we recently completed 20 years of taking Indians to work and helping Indians get off from work an accomplishment we are very proud of. As we look back, I would like to reflect on a few of the key strengths that have shaped Yatra over the past two decades. First, the trust in our brand from over 1,000 corporate customers and millions of retail customers. Secondly, our technology capability. And thirdly, the resilience of our business model. Over this period, our brand has become synonymous with online travel in India. This trust has won us numerous consumer accolades and continues to drive a high degree of repeat usage and direct traffic onto our platforms. Our corporate customer base also continues to rise consistently, with retention rates in excess of 97%. For nearly 20 years, technology has been at the core of our business, enabling us to continuously evolve with the changing needs of travelers and enterprises. Over this period, we have built and refined a comprehensive travel technology ecosystem covering booking, travel management, expense management, automation, and analytics, which support more than 1,300 large and mid-sized enterprise customers across India. And now, with our partnership with Kanu Travels, we will be extending our reach into the Middle East as well. We believe the capabilities we have built over the last two decades provide a strong foundation for the next phase of Yatra's AI-driven growth as AI becomes an integral layer across our platform, making travel simpler for users, smarter for enterprises, and more efficient for our own operations.
We believe that AI can fundamentally change the economics of managed travel.
AI is automating routine workflows, surfacing saving opportunities in real time, improving policy compliance at the point of booking, and accelerating expense reconciliation. As a result, companies are able to handle higher transaction volume with fewer manual touchpoints, reduce cost leakages for their customers, and unlock better operating leverage at their scale. Our investments are firmly aligned with these trends. We are embedding AI into search, recommendations, and conversational interfaces so that travelers can find the right options faster and with less friction while staying within policy. We are also using AI and machine learning to automate service interactions, flag out of policy, spends, and provide travel and finance leaders with richer, more actionable insight into their programs. In practical terms, this translates into a better user experience, stronger compliance for our corporate clients, lower costs to serve, and a more scalable operating model for us. We believe AI will increasingly be a structural advantage in travel management for us, not just enhancing the customer journey, but also improving margins and returns for our businesses. As we deepen these capabilities across Yatra's platform, we see a clear opportunity to drive both sustainable top-line growth and continued improvement in our operating efficiency over Let me now turn to the broader travel ecosystem. The travel industry has gone through a period of disruption over the last few months. International travel was particularly impacted with the West Asia conflict resulting in air connectivity and affecting mice activity. At the same time, we are operating in a structurally expanding market. India's overall online travel market is expected to grow at a high single-to-low double-digit category over the next several years, outpacing many global peers, supported by rising disposable income, rapid digital adoption, and improving air and rail connectivity across Tier 2 and Tier 3 cities. Domestic travel has remained resilient despite global challenges. Air passenger traffic in India grew around 2.3% year-over-year in the period, driven by a young, increasingly affluent, and mobile population that is prioritizing travel and experience over discretionary goods. We're also seeing sustained strength in non-air categories, such as hotels, as travelers look for short-haul getaways and value-for-money options. Outbound and international travel have seen more mixed results. The West Asia conflict and rerouting of flights led to higher airfares, longer routes, and uncertainty around certain long-haul destinations, which weighed on outbound travel sentiment. Industry-wide inquiries for some international destinations declined by roughly 10% to 15% during the peak. At the same time, the medium-term outlook for outbound travel from India remains robust, with multiple industry reports projecting low-team growth in outbound spend over the next decade as many more Indians travel overseas for leisure, business, and education. As these are regimes, ease, connectivity improves, and new destinations ramp up targeted campaigns at Indian travelers, we see a long runway for growth in this segment. Our discussions with the Foreign Tourism Boards also support this view, with Foreign Tourism Boards keenly awaiting the normalization of the situation to initiate joint marketing campaigns to stimulate demand. Given our higher business mix of international travel and might, these near-term headwinds have had a disproportionate impact on our business. However, based on past cycles and what we are already seeing in the market, we expect this to recover quickly as the macro environment stabilizes. As we have seen in the past, revenge travel following periods of disruption has been very strong and prompt, both in India and globally. and we expect it to be the same this time around. In fact, we are already seeing early signs of this in our own numbers. In the first half of the current quarter, our MICE bookings are trending approximately 50% higher than the first quarter. Importantly, if we step back from these temporary factors, the underlying travel opportunity in India continues to strengthen, Rising disposable incomes, improving airport and road infrastructure, and a growing preference for experiences are supporting greater demand for domestic tourism, while corporate mobility is being supported by continued economic activity and investments. Importantly, the shift from offline to online travel still has a long way to go. Online channels currently account for only a small part of business travel and are expected to grow meaningfully faster than the broader market over the coming years. Against this backdrop, our Q1 performance reflects the resilience of our franchise and the benefits of our diversified model. Despite the challenging external environment, gross bookings increased 16.3% year-over-year to INR 21,007 million, which is approximately USD 222 million. Gross Cost margin increased 6.1% to INR 1,227 million, or approximately USD 13 million. Total transactions grew 11%, and the air passenger volume increased 4.8%, roughly double the industry growth rate, reflecting continued market share expansion for us. Our corporate business also continues to demonstrate strong traction. During the quarter, we added 53 new corporate customers with an expected annual billable potential of INR $2.2 billion, which is approximately USD $23 million. This provides a healthy pipeline of incremental business as these accounts progressively ramp up. We believe this is where Yastra's differentiated positioning becomes particularly relevant. Our diversified business model across corporate and consumer travel, air, hotel, and other travel services, combined with our strong corporate relationships, extensive domestic hotel supply, and technology-led platform gives us a strong foundation to capture the growing travel opportunity in India. As the market continues to shift towards organized and online travel, and as outbound demand normalizes from current geopolitical disruptions, we believe we are well positioned to benefit from the structural transition and to deliver sustainable, profitable growth. With this, I will now hand you over to our CEO, Siddharth Gupta, to walk you through the quarter's performance.
Thank you so much, Dhruv. Building on Dhruv's commands, I want to spend a few moments on something that has been fundamental to Yatra throughout our journey, which is our ability to innovate, adapt, and continually rethink how travel should work. Over the last two decades, the travel industry has been reshaped repeatedly. Through each period of disruption, our response has not simply been to manage the immediate challenge. we have used these periods to question established ways of working rethink the fundamentals of our business and build for a more resilient future that mindset has been part of yatra from the beginning and i think our approach to the current environment is another example of it coming to q1 the larger headline is that yatra continued to deliver strong underlying growth despite a challenging macroeconomic and geopolitical environment for the travel industry gross bookings grew 16.3 percent year on year to INR 21007 million approximately usd 222 million while total transactions increased 11 percent supported by a healthy growth across air and hotel segments gross margins increased 6.1 percent year on year to 1227 million approximately usd 13 million revenue from operations stood at 1879 million approximately 20 million down uh about 10% year on year, primarily reflecting lower MICE top line during the quarter. This is the group corporate travel. Just at Abita stood at INR 216 million, approximately USD 2 million, compared to INR 206 million last year, up nearly 5% year on year. There are two important factors behind this movement. The first factor was the impact of temporary macro geopolitical disruptions on mice group corporate travel and corporate travel. The mice top line was approximately INR 300 million, about USD 3 million lower year on year, mainly due to disruption in international group travel. This had approximately INR 30 million, which is about 0.3 million USD impact on our gross margins. In addition, the shift from international to domestic group travel increased competitive pressures resulting in a further impact of about 30 million INR on gross margins. So I want to reiterate that we view this drop of 60 million INR on gross margins as a short-term transitory factor rather than structural change in the business and we expect the impact to normalize going forward as travel patterns have started to stabilize already. Corporate travel demand was also impacted because of elevated fares while the timing of airline incentive programs created an additional near-term headwind during the quarter the second factor however is one that i want to spend a little more time on because it reflects a deliberate choice we have made we have continued to invest and build through this period of turbulence rather than allowing short-term disruption to define our priorities we have used this period to invest in capabilities and capacity that we believe can materially expand yatra's future growth opportunity we've been doing this through a three-pronged approach first strengthening and scaling our core b2e business we have continued to invest behind travel pro our small medium enterprise offering including building out the people platform and go to market capabilities required to expand our reach within the corporate market we are already seen early validation of that investment of the 53 new corporate customers won during q1 30 plus customers representing approximately inr 800 mil or usd 8.5 million came through travel pro while still early this gives us confidence in the potential of the new go to market engine we have built around our core corporate offering second expanding our addressable market through recap our expense management solution since its launch we have already added more than 20 customers we continue to invest in the product and technology behind recap and believe it can develop into another meaningful growth engine as we scale the proposition third taking our corporate platform beyond india over the preceding two quarters we have invested in making our technology globally ready including the product infrastructure solutions and teams required to support international deployment our partnership with canoe travel gives us the opportunity to take the capabilities built and refined over many years in india into a large adjacent market in the middle east alongside a mature and highly respected regional partner with deep customer relationships and market knowledge while the region itself is currently experiencing some near-term disruption we believe the long-term opportunity is very significant. Importantly, across all three initiatives, we've been building capacity ahead of the revenues we expect them to generate as they scale. While this investment is visible in our cost base today, we believe it materially expands the future earning capacity of the business. Periods of turbulence have often been the periods in which Yatra has done some of its most important building. We believe this period will be no different. Let me now turn to the individual businesses. Our air business delivered healthy growth during the quarter, with gross air booking increasing approximately 18% year-on-year to INR 16,579 million, approximately USD 175 million. Growth was supported by higher average ticket price, along with continued expansion across our distribution channels. Importantly, air passenger volumes grew approximately 5% year-on-year, nearly twice the industry growth rate. Despite capacity constraint, elevated fares, and a software demand environment, we continue to grow passenger volumes materially ahead of the market, resulting in further market share gains. Air margins remained under pressure during the quarter. Our focus remains on building a healthy and sustainable air business with continued discipline around unit economics and the quality of growth. Moving to hotels and packages, the segment delivered gross booking growth of approximately 13% year on year. Within this segment, our standalone hotels business continued to perform particularly well, with gross bookings growing approximately 34%, revenues increasing by about 62%, and room nights growing approximately 30% year on year. this performance reinforces our conviction that our investments in expanding hotel supply is the right strategic priority we're seeing these investments drive stronger demand across our businesses while increasing the contribution from hotels a higher margin and increasingly important part of yatra's business mix on mice corporate group travel as i mentioned earlier MICE faced a particularly challenging operating environment during Q1, given its greater exposure to international and discretionary travel. Geopolitical uncertainties led to delays in corporate decision-making, and in several cases, a shift from international program towards shorthold and domestic destinations happened. As discussed earlier, the combination of lower top-line and temporary margin compression resulted in an approximate inr 60 million year-on-year impact on mice gross margins during the quarter but what is important however is what we are seeing as we enter q2 the q2 mice pipeline is significantly stronger than q1 and has a much healthier margin profile based on the visibility that we have today we believe the q1 impact was temporary and we are seeing encouraging signs that business is returning to a growth phase coming down to our corporate travel business corporate travel remains one of yatra's key strategic growth pillars despite elevated fares and disruption to international travel the underlying business remained resilient and customer acquisition momentum continued to be strong as i mentioned earlier during q1 we added 53 new corporate customers these additions provide visibility into incremental volumes as customers are onboarded and progressively ramp up beyond new customer acquisitions we remain focused on increasing wallet share with our existing customers and expanding the range of services consumed through the yatra platform the structural opportunity remains significant with online penetration in india's managed corporate travel still relatively low we believe our scale technology platform extensive hotel supply and long-standing enterprise relationship positions as well as the market continues to digitize as we look forward we have several reasons to be constructive mice is seeing a stronger pipeline and improved margins corporate travel is recovering air margins are improving and hotel continues its strong growth trajectory at the same time our investments are expanding our growth opportunity travel pro is strengthening our b2e go to market recap is opening new customer segment and canoe partnership is expanding and extending our corporate capabilities beyond india as these factors come together we expect the operating capacity we have already built to support a much larger revenue base driving operating leverage and rebuilding a better margins towards 20 plus as corporate travel normalizes and our growth initiative scale we believe this EBITDA margin can progress into the 30% plus range over time the macro environment remains uncertain but the underlying opportunity has not changed india remains one of the world's most attractive long-term travel markets and yatra today has a broader set of growth opportunities than at any point in our recent history our priorities therefore remain clear strengthen the core expand our addressable market take our capabilities into new geographies and continue using technology AI and automation to build a more scalable yatra this is how we have approached periods of disruption throughout our 20-year history and it is how we intend to build the next phase of yatras go thank you everyone I will now request our CFO Anuj Sethi to brief you on the financial performance of the quarter Thank you, Siddharth.
Good morning, everyone. For the first quarter of financial year, 2027, on a consolidated basis, our revenue from operations decreased 10.4% year-on-year to INR 1879 million, equivalent USD of 20 million approximately. Our gross margin defined as revenue-less service cost rose 6.1% year-on-year to INR 1227 million, approximately USD 13 million. Adjusted EBITDA increased 4.9% year-on-year to INR 216 million, approximately USD 2 million, translating to 17.6% adjusted EBITDA to gross margin ratio. As a result, a profit after tax came at INR 41 million equivalent to USD of 0.4 million. In terms of segmental performance, our air ticketing passengers volume increased by 4.8% year-on-year to 1 to 64,000. However, gross year bookings grew 17.6% year on year to INR 1657 million, equivalent USD of approximately 175 million. And our gross margin rose 8% year on year to INR 699 million with margins declining from 4.6% to 4.2%. Under the hotels and packages segment, hotel room nights grew by nearly 30% year-on-year to 548,000 gross bookings increased 13% year-on-year to INR 3876 million equivalent of USD 41 million while gross margin expanded 24% year-on-year to INR 386 million approximately USD 4 million with margins improving from 9.05% to 9.95% on the liquidity front cash and cash equivalent and term deposits stood at INR 2162.8 million, equivalent to USD 22.8 million as of 30 June 2026. With this, I would like to hand it back to the moderator and open up for the question and answer session. Thank you.
Operator
Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question for optimum sound quality. And if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. There are no questions at this time. I will now pass the call back to Siddharth Gupta for closing remarks.
Thank you so much. I would like to thank all of you for joining the call today on behalf of Yatra family. I hope we were able to give you enough insights and were able to address all the queries you might have. If you have any further questions, you can reach out to our IR partner at ICR Inc. Thank you once again for participating in the call.
Operator
This concludes today's call. Thank you for attending. You may now disconnect.
