Earnings Call Transcript - YTRA Q1 2026

Operator, Operator

Hello, everyone, and welcome to Yatra's Fiscal First Quarter 2026 Financial Results Call for the period ended June 30, 2025. Today's call is hosted by Yatra's CEO and Co-Founder, Dhruv Shringi, and CFO, Anuj Sethi. The following discussion includes responses to your questions that reflect the management's views as of today, August 11, 2025. The company does not take any obligation to update or revise the information. Before they begin their formal remarks, please be reminded that certain statements made on this call may constitute forward-looking statements, which are based on Yatra's 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 Yatra's filings with the SEC on the press release filed earlier this morning on the IR section of Yatra's website. With that, let me turn the call over to Yatra's CEO and Co-Founder, Dhruv Shringi. Dhruv, please go ahead.

Dhruv Shringi, CEO

Thank you, and good morning, everyone. Thank you for joining us to discuss our first quarter fiscal year 2026 earnings. I'm pleased to share that our first quarter performance delivered strong financial and operational results, with growth well ahead of our annual guidance despite the disruption in travel in India due to the cross-border tension and the unfortunate air crash in June 2025. This momentum was driven by sustained demand in our business channel and strong execution across our platforms. For Q1 FY '26, we are pleased to report revenue of INR 2.098 billion, which is approximately USD 24.5 million, up 99.7% year-over-year, and revenue less service cost or gross margin for the quarter of INR 1.15 billion, or USD 13.5 million, up 36.6% year-over-year. Our growth in revenue and gross margin reflects the momentum we have in our corporate business and in the higher-margin hotels and packages business, driven by continued momentum in MICE and standalone hotel cross-selling to existing customers. Notably, our profitability metrics underscore our disciplined execution. Profit for the quarter stood at INR 110 million, which is approximately USD 1.3 million versus the loss of INR 0.8 million or approximately $0.1 million in the June FY '25 quarter. Our adjusted EBITDA of INR 206 million, which is approximately USD 2.4 million, was up 214% year-over-year, significantly ahead of our annual guidance of 30% growth for adjusted EBITDA. These results reaffirm the strength and sustainability of our business model as well as our commitment to delivering value to our shareholders. The corporate travel market in India is expected to reach around $20 billion by FY '27. However, online penetration in this segment remains low at just about 20% in FY '24 compared to almost 45% for the overall travel market in India. This indicates substantial headroom for digital adoption across the corporate travel industry. Online penetration is accelerating, driven by rapid adoption of digital booking platforms and the uptake of self-booking tools and integrated expense management solutions. In the lodging space, branded hotels and curated packages are witnessing increasing demand from both leisure and MICE travelers, supported by improving supply, better service standards, and a growing preference for experiential stays. Overall, this large and expanding market, coupled with increasing digital adoption, presents a significant opportunity for Yatra, particularly in the underpenetrated corporate segment. Our corporate travel segment continues to deliver strong momentum by Yatra. In Q1, we onboarded 34 new corporate clients, collectively adding an annual billing potential of approximately INR 2 billion. On the B2C front, we continue to make good progress on rationalizing our cost of acquisitions and identifying avenues to scale profitably. B2C bookings were more impacted by the macro events of the quarter and declined marginally year-over-year. Had it not been for these macro events, it is likely that B2C gross bookings would have registered a marginal year-over-year increase. On the technology front, we introduced a more refined user interface, which makes it easier to upsell branded fares across airlines, which offer unique airline-specific fare options bundled with benefits such as baggage allowance, speed selection, and flexible changes. We have recently launched our AI assistant DIYA, which stands for Digital Intelligent Yatra Adviser, which assists customers not only with usual customer service inquiries but also helps refine searches and book personalized travel products. AI-enabled servicing will provide us with further operating leverage in the quarters to come and a more refined service process to enable us to attract new customers to Yatra. Additionally, our expense management solution offers an end-to-end travel and expense solution with GenAI-Powered Receipt Parsing, ERP integration, and advanced analytics and visualization, and continues to receive very positive feedback from initial customers. In sales and marketing, we continue to amplify our partner offers from banks and airlines through our owned media and social media channels, ensuring consistent visibility and engagement. Our content marketing initiatives strengthen brand reach with compelling travel stories, seasonal campaigns, and milestone celebrations that resonate with our audience. We also execute innovative brand collaborations with leading consumer brands, delivering impactful outdoor campaigns and co-branded experiences that capture attention and grow conversion. Regarding our fare convertibility, as previously stated, we have a strategy in place to restructure to effectively support the conversion of U.S. shares into India shares. While some regulatory complexities remain, we are navigating the required processes across multiple jurisdictions. Given this complexity, the timeline is still unclear, but we'll keep you informed as we continue to make progress. Just to clarify on this from an exchange ratio perspective, 1 U.S. share is equivalent to approximately 1.5x shares in India. As you look ahead, we see strong sustained growth opportunities driven by rising digital adoption across both leisure and corporate travel segments. Yatra is well positioned to capture this growth through our expanding corporate client base, enhanced technology offerings, a growing share of high-margin hotels and packages, and MICE business. We remain committed to disciplined cost management, profitable scaling, and delivering long-term value to our shareholders while strengthening our competitive edge in the evolving global travel ecosystem. Thank you, everyone, and I will now request our CFO, Anuj Sethi, to brief you on the financial performance for the quarter under review. Anuj?

Anuj Kumar Sethi, CFO

Thank you, Dhruv. Good morning, everyone. For the first quarter of financial year 2026, on a consolidated basis, our revenue from operations was INR 2,098 million, which is approximately USD 24.5 million, an increase of 99.7%, driven by continued momentum across key segments, including robust growth in our hotels and packages business and a meaningful contribution from our MICE business. Our gross margin, defined as revenue less service cost, stood at INR 1,156 million, approximately USD 13.5 million, rising 36% year-on-year, underscoring the strength of our diversified business model. Adjusted EBITDA surged to INR 206 million, which is approximately $2.4 million, up 214% year-on-year. As a result, profit for the period increased to INR 110 million, approximately USD 1.3 million. In terms of segment performance, our air ticketing passenger volumes declined 9% year-on-year to INR 1.206 million. However, gross share bookings grew 4% year-on-year to INR 14,103 million, approximately USD 4.4 million. NRA gross margin rose 54% year-on-year to INR 647 million with margin improving from 3.10% to 4.60%. Under the Hotels and Packages segment, the hotel room nights grew marginally by 1% year-on-year to about INR 423,000. Gross bookings increased 43% year-on-year to INR 3,433 million, while gross margin expanded 74% year-on-year to INR 311 million, or USD 40 million, with margins improving from 7.46% to 9.05%. While the macroeconomic headwinds and the recent air crash impacted volumes in both segments, we successfully delivered higher revenue and stronger margins. On the liquidity front, cash, cash equivalents, and term deposits stood at INR 2,235 million, approximately USD 26 million as of June 30, 2025, compared to INR 1.9 billion, approximately USD 22 million as of March 31, 2025. Gross debt has been significantly reduced from INR 546 million, about $6 million as of March 31, 2025, to just about INR 29 million, around USD 0.3 million as of June 30, 2025. With this, I would like to hand it back to the moderator to open up the question and answer session. Thank you.

Scott Christian Buck, Analyst

Congrats on the quarter. Dhruv, I'm curious, given the momentum in MICE, what is your appetite for potentially doing another deal in the space to accelerate that growth further?

Dhruv Shringi, CEO

Integrated within Yatra, and that's something we've been able to achieve over the course of the last couple of quarters. We continue to look out for opportunities; if something interesting comes up, we will evaluate it on its merits. But it's a segment that we are quite attracted to. It has the right dynamics from a growth trajectory point of view.

Scott Christian Buck, Analyst

Any additional color there would be helpful.

Dhruv Shringi, CEO

Scott, regarding that, given that it's more of a regulatory process, there isn't much else I can share at this point except that we do have a strategy in place that we are executing on. It entails working with multiple regulators in different jurisdictions and multiple law firms across different markets. So it is a time-consuming process, but it’s definitely something that remains top of mind for us and the Board.

Scott Christian Buck, Analyst

As a follow-up, what were the quarterly operating expenses tied to this effort? Were they material?

Dhruv Shringi, CEO

In the current quarter, they were not material, but in the last quarter, obviously, it was quite significant. In the current quarter, they were less so.

Unidentified Analyst, Analyst

Are you losing market share in air and gaining in hotels and meetings?

Dhruv Shringi, CEO

Yes, in terms of your question, the overall industry growth rates on the aviation side would have been slightly higher. For Yatra, specifically, what has happened is there are two parts to our business. One is the corporate business, which is the larger part of our gross bookings, and then we have the consumer business. While the corporate business was growing and has grown well ahead of the market, the consumer business declined marginally due to macro factors in India, including a product skirmish with Pakistan in May and a large air crash in June, both of which negatively impacted consumer sentiment regarding travel. Business travel, on the other hand, recovered quite promptly. Hence, the business travel arm of Yatra was able to grow at a much higher rate, while the B2C business lagged behind a bit. On hotels and packages, given that these are largely on the corporate travel side, you see growth rates that are well ahead of the market.

Unidentified Analyst, Analyst

What is the share of your business for corporate travel to consumer? It used to be two-thirds and one-third, right?

Anuj Kumar Sethi, CFO

Yes, sir. So corporate is about two-thirds and consumer is one-third.

Unidentified Analyst, Analyst

Regarding the restructuring of companies merging into Yatra Limited, will that provide any significant savings, or is it not a material amount?

Anuj Kumar Sethi, CFO

There will be some savings, plus there will be tax savings as well. In India, the tax saving impact of that will be approximately $0.5 million per year.

Operator, Operator

We have no further questions, and that concludes the question-and-answer session here. I would like to hand it back to management for some final closing comments.

Dhruv Shringi, CEO

Thank you, operator. I would like to thank all of you for joining the call today. If you have any further questions, you can reach out to our IR partner. Thank you once again for participating in today's call, and we look forward to your support going forward. Thank you.

Anuj Kumar Sethi, CFO

Thank you.

Operator, Operator

Thank you for dialing in. I can confirm that this concludes today's conference call with Yatra. Thank you all for your participation. You may now disconnect, and please enjoy the rest of your day.