Yatra Online, Inc. Q3 FY2025 earnings call

• Revenue from operations grew 113% y-o-y to INR 2.35 billion. - Corporate Travel segment onboarded 50 new corporate clients in Q3 FY '25 with annual billing potential of INR 2.8 billion. - Integration of Globe acquired in Sep 2024 is ahead of schedule, generating synergies. - Hotels and Packages segment saw hotel gross bookings up 83% and adjusted margin up 65.8% y-o-y. - Adjusted EBITDA surged 75% y-o-y. - Stabilized volumes in B2C air business despite competition, with personal travel attach rate to corporate channel up ~22% y-o-y. - Yatra recognized as one of India's biggest brand movers by YouGov. - Progress on simplifying corporate structure and enhancing corporate SaaS platform, with expense management solution progressing well. - Deloitte study highlights growth in India's corporate travel market, boding well for Yatra's cross-sell opportunities.

For the quarter ended December 31, 2024, Yatra reported revenue from operations of INR 2.35 billion, up 113% year-over-year. Revenue less Service Costs (gross margin) grew 25% year-over-year to INR 1.04 billion. On the air ticketing side, adjusted margin was INR 858 million, down 23% year-over-year due to lower gross bookings and mix change. On the Hotels and Packages segment, adjusted margin surged to INR 438 million, an increase of 66% year-over-year, driven by MICE segment expansion and cross-selling initiatives. Marketing and sales promotion costs declined 32% year-over-year, personnel expenses increased 34% due to Globe acquisition and appraisal cycle, and other operating expenses increased 9% due to business combination and Globe acquisition impact.

• Confident in sustaining growth in high-margin businesses. - Focus on expanding Hotel and Packages and MICE business to diversify revenue streams. - Enhance corporate travel solutions including expense management and cross-selling. - Maintain cost discipline and operational efficiency while investing strategically in key growth areas.

• Competitive pressures in the B2C segment. - Direct airline supplier pricing challenges.

Q: Given the momentum in MICE, can you give an indication of how large that market is and how long the positive momentum can continue?

A: MICE in India is a highly fragmented market. The organized sector barely accounts for about 15% of the overall MICE business. The overall MICE business in India is expected to be between $8 billion to $10 billion on an annualized basis. It's highly fragmented and offers tremendous long-term growth opportunity.

Q: Can you remind us how long it takes to ramp a corporate client relationship once they're onboarded?

A: For accounts with an annual billing potential of more than INR 5 million, they will go live in a phased manner, taking anywhere between 6 to 9 months to get to the appropriate run rate of our share of wallet. For accounts in the $2 million to $4 million range, it will take 3 to 6 months.

Q: What was Global India's revenue contribution during the quarter?

A: While not called out separately, Globe's revenue less service costs last year was approximately about $5.4 million or $5.3 million.

Q: Any update on the timeline on the work the Board is doing on potential legal structure?

A: We are working with appropriate council in different jurisdictions. We've made meaningful progress over the last 3 months and are hopeful of having something more concrete in the relatively near future.