Yatra Online Q4 2024 Earnings Call Transcript

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Provided by Quartr
May 31, 2024

Key Takeaways

  • FY24 revenue up 11% YoY to INR 4.2 billion with air passenger volumes rising 24%, nearly double industry growth.
  • Q4 revenue fell 10% YoY to INR 1.07 billion, primarily due to catch-up COVID income in last year’s quarter, though like-for-like revenue was up 6.4%.
  • Adjusted EBITDA margins expanded ~6% sequentially to INR 110 million ($1.3 million), driven by optimized customer engagement costs and corporate travel recovery.
  • Completed a $5 million share buyback of 3.18 million NASDAQ-listed shares, and remains committed to strategic actions to maximise shareholder value.
  • Launched a Gen AI-based expense management solution to cross-sell to existing corporate and SME customers, targeting a large and profitable new revenue stream.
AI Generated. May Contain Errors.
Earnings Conference Call
Yatra Online Q4 2024
00:00 / 00:00

There are 5 speakers on the call.

Operator

Hello, and welcome to the Yatra Online Inc. Q4 2024 and Fiscal Year 20 24 Financial Results Earnings Call.

Operator

My name is Carla, and I will be coordinating your call today. I will now hand you over to your host, Manish Hemrajne to begin. Manish, please go ahead.

Speaker 1

Thank you, Carla. Good morning, everyone. Welcome to our fiscal Q4 and FY 'twenty four financial results for the period ended March 31, 2024. I'm pleased to be joined on the call today by Yatra's CEO and Co Founder, Dhruv Shringi and Group CFO, Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today, May 31, 2024.

Speaker 1

We don't take 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.

Speaker 2

Thank you, Manish, and good morning, everyone, and thank you for joining us for our 4th quarter and fiscal 2024 earnings call. We are pleased to report a solid 2024 fiscal year with an annual reported revenue of INR 4,200,000,000, up 11% year over year with air passenger volumes up 24%, nearly double the industry growth rate of 12%. For fiscal year 2024, we largely met or exceeded all our analyst expectations. On a quarterly basis, gross bookings expanded 12% year over year in the Q4 of fiscal 2024, driven by a 13.5% growth in air gross bookings. This growth was fueled by a robust rebound in international travel.

Speaker 2

Additionally, our adjusted EBITDA margins expanded by approximately 6% sequentially, reaching 110,000,000 dollars approximately US1.3 million dollars from INR US44.5 million dollars in the previous quarter. This was on account of optimization of customer engagement costs in the B2C business and recovery in the corporate travel business. Overall from a domestic air passenger perspective, the quarter was soft due to supply side constraints with the largest airline in India having taken out capacity for engine repair related issues. We expect supply side constraints to start improving in the second half of the year and expect between 100 to 150 incremental aircrafts being in operation by the same quarter of fiscal 2025. For the quarter ended March 31, 2024, we reported revenues of INR 1,070,000,000, which is approximately USD 12,900,000, down 10% year over year and adjusted revenue of INR 1,790,000,000 approximately USD 21,200,000 down 6.6% year over year, largely due to the impact of catch up income in the same quarter last year coming out of COVID of approximately INR 190,000,000 Excluding the benefit and comparing on a like for like basis, revenue was up 6.4% year over year and adjusted revenue grew 3.5% year over year.

Speaker 2

Our strategy to balance our consumer and corporate business while focusing efforts on the more profitable corporate business is resulting in a more favorable profit mix for us. During the fiscal year of 2024, we signed 83 new corporate customers, which translates into annual billing potential of INR 5,400,000,000. In the March quarter alone, we signed 25 new corporate clients. During the year, we landed numerous deals with large and industry leading companies like Aramco. And during this reporting quarter, just to give you a few examples, we won 2 large MNC customers, signed up a large private sector bank, a large pharma company and one of India's largest manufacturing conglomerates.

Speaker 2

Our consistent win and high customer retention provides concrete evidence of our team's relentless pursuit to expand our corporate share and provide service excellence. Furthermore, we continue to work on expanding our software services to further expand our total addressable market and better serve our existing and future clients. To that end, earlier this week, we announced the launch of our expense management solution. Yatra's expense management solution stands out with its utilization of cutting edge technologies, including Gen AI, large language models for receipt analysis. And unlike traditional OCR technology, this ensures more accurate and comprehensive expense tracking, significantly reducing errors and saving time.

Speaker 2

It also features an integrated chatbot based on Gen AI and RAG models. Our expense management solution is designed to grow with our clients, offering scalability and flexibility as their businesses evolve. We now have the opportunity to cross sell this solution to our already well established corporate and SME customer base. Now let me provide you with some more details on our 4th quarter. Travel volumes in the IT sector continued to remain soft in Q4.

Speaker 2

However, we are pleased to announce that volumes in the corporate segment overall for us are now back to pre COVID levels with IT sector softness offset by customer wins earlier in the year. We are increasingly optimistic with our ability to grow our corporate business through new customer wins and the potential of cross selling new products such as expense management in the future. In the current quarter, incidentally, we've also begun to see recovery in most of our IT services customers. As you may recall, Yatra had initiated a share buyback program in the U. S.

Speaker 2

Authorizing a repurchase of up to $5,000,000 of our NASDAQ listed YPRA shares. We are pleased to announce that under this program, we have repurchased 3,180,000 shares for approximately $5,000,000 and the repurchase has been completed. Going forward, we continue to evaluate strategic corporate actions based on our dedication to maximize shareholder value. In terms of recent initiatives, I would like to take the time to highlight some of the most strategic initiatives which we've undertaken to expand our position in the market and enhance our technology solutions. In the recent months, we have launched a new UI and improved our domestic flight search platform.

Speaker 2

This enhancement is designed to provide a more seamless and intuitive booking experience to our customers, driving data engagement and satisfaction. 1 of the key features of this new eye is its focus on upselling ancillary products, which offer additional value and convenience to travelers. These products include premium seats, travel insurance, additional baggage allowance and the ability to offset the carbon footprint. By integrating these offerings more prominently into the booking process, we aim to not only enhance the overall travel experience, but also increase our revenue streams. The revamped UI is not just about adding new features, it also includes significant improvement in functionality and design.

Speaker 2

The user can be layout faster loading times and enhanced search capabilities make the booking process smoother and more efficient. We've also incorporated personalized recommendations based on customer preferences and booking history, further enhancing the user experience. Additionally, on the corporate side, we've launched our guest house booking platform for our corporate customers. This new service is designed to provide companies with convenient and comfortable accommodation options for their employees. And by offering guest houses, we provide customers the option of being able to optimize their lodging spend.

Speaker 2

To further touch upon the capabilities of the expense management solution that I mentioned earlier, The expense management solution includes multi level approval process, seamless integration with ERP systems, advanced analytics powered by Power BI dashboards and deep insights for comprehensive expense analysis. The expense management is a large and highly profitable segment and our product capabilities make it a product that is suitable not just for the Indian market, but for international markets as well. Our initial response from customers has been very encouraging and the solution allows us to further deepen our relationship with our customers. This also provides us with an opportunity to differentiate our offering from our competitors by effectively offering a bundled solution. We recently also brought on board a senior executive who was prior to this the CEO of 1 of the large corporate travel management companies in the country.

Speaker 2

This gentleman has joined us as the Chief Business Officer for New Business Development. He will be responsible for building and further enhancing Yatra's mid market and SME corporate travel proposition and developing new products such as Visa facilitation and car rental for business travelers. This will help diversify our financial revenue streams. He brings with him a wealth of knowledge and experience and the capabilities that will be fundamental to help accelerate our presence in the mid market travel management space. In addition, we have also built out a team that is focused on the highly profitable MICE segment and the initial traction on that is very encouraging.

Speaker 2

While these additions have led to an increase in salvia costs in the quarter under discussion, we expect the benefit of these to start accruing in the near term itself. Now looking at the broader Indian economic landscape, as per the Reserve Bank of India, despite subdued global economic activity and multiple headwinds, the Indian economy expanded impressively with real GDP growth accelerating to 7.6% in fiscal year 2024 from 7% in the previous year. This is the 3rd successive year of 7% or higher growth. The RBI further highlighted in its recent report that the easing of supply chain pressure, broad based softening in the core inflation and the early indications of an above normal Southwest Monsoon augur well for the inflation outlook of 2024, 2025. The domestic economy is expected to continue growing at an accelerated rate as the government invests heavily into public infrastructure.

Speaker 2

India's ambitious goal to be a 5,000,000,000,000 economy by 2025 has driven planned investments was RMB1.4 trillion in the national infrastructure pipeline. This unparalleled growth in infrastructure injection bodes well for our industry As these investments are translating

Speaker 1

Hello, operator?

Operator

Hello. It seems that we have this lost connection with the speaker. Please standby while we get connected. We have the speaker back in the room now. Please, you can continue.

Speaker 2

Thank you. Thank you. So just to summarize, we continue to expect to benefit from the accelerating growth in our corporate travel and consumer business as we work to repeatedly win major customers and build up the value of our brand. We have seen improving supply and margins and continue to expect further improvement in the quarters ahead. This should help meaningfully contribute to our operating performance going forward.

Speaker 2

With that, let me hand it over to Rohan to walk you through the details of the financial performance. Rohan?

Speaker 3

Thank you, Roop, and good morning to everybody. I will now review our numbers for the quarter ended March 31, 2024, followed by the full year fiscal 2024 results. We delivered a strong quarter with 12% year on year growth in gross booking to INR19.96 billion which is about USD 239 million. Our air gross bookings grew by 13.5% y over 1, while the hotel and packages gross bookings grew by 5% on a y over y over. Our overall adjusted margin for the quarter was INR1.6 billion, which is roughly INR18.8 million.

Speaker 3

Our adjusted margins for the air ticketing business were at 7.3%, while the hotel and package margins were at 13.1%. Moving to expenses. Our marketing sales promotion expenses including consumer promo and loyalty, as a percentage of the total gross booking value decreased by 100 bps to 4.85% in quarter for 2024 versus quarter for 'twenty three. Our personal expenses excluding the share based payment increased by 19% y o y as we continue to build our teams for mid market, MICE and other business expansions. Other costs have remained range bound compared to the year ago quarter.

Speaker 3

For the full year fiscal 2024, we reported a revenue of INR4.2 billion, which is roughly US51 million dollars reflecting an 11% growth in FY 2024 versus FY2023. On a full year basis, our gross booking value increased by 13% to INF76 1,000,000,000 which is roughly about USD 911,000,000 in FY 2024. Overall adjusted margin for the full year was INR5.9 billion, up by 5% compared to FY 2023. Our overall adjusted margins on a percentage basis for Air Business was 7% for F4.24 and for hotel and package business was 13%. Adjusted EBITDA was INR304 million, which is roughly US3.7 million dollars in FY 2024 compared to INR423 million in FY23.

Speaker 3

Lastly, as of 31st March 2024, we were carrying cash and cash equivalents of INR4.5 billion, which is roughly US54 million dollars on our books. Our gross debt was down to INR638 billion, which is roughly INR7.7 million as of 31 March 2024. With this, we conclude our prepared remarks. I'd like to hand it over back to the moderator for the Q and A. Thank you.

Operator

Our first question comes from Scott Buck from H. C. Wainwright.

Speaker 4

Hi, good morning everyone. Thank you for taking my questions. Dhruv, I want to ask about the expense management tool announcement earlier in the week. I'm curious, are you currently actively selling the product into the corporate space? And 2, what kind of sales and marketing push should we expect in the quarters to come as you completely roll that out?

Speaker 2

Good morning, Scott. So Scott, this is a product that we recently launched in the market. We've done a soft beta test before this for the last month or so, before taking it out to market now. And the initial response is very encouraging. We've had some discussions with some of our large existing customers and mid sized existing customers who've shown keen interest in the product and the solution that it offers to them.

Speaker 2

So we will see firstly a big push in terms of cross selling to our existing customer base. And then in parallel, we will, as we go into the new pitches, offer this as a bundled solution to the new customer base that we are reaching out to. So for us, this is I feel a very large opportunity that we are just beginning to tap into. And over the course of the next few quarters years, we expect this to evolve into a very meaningful revenue stream for the company.

Speaker 4

Great. That's very helpful. And this was another nice quarter of corporate client signings. I'm curious when the comps start to get more difficult in terms of who you can sign. I mean, you guys have made some meaningful headway on the share side.

Speaker 4

So just curious how much runway you have left before things start to get more challenging there?

Speaker 2

So I feel we still have a lot of runway in this in terms of number of customers. We are looking at an initial market size of about 13,000 odd corporations in which we are just at about 850. So we feel there's a lot of runway still left in the market before we can start facing any slowdown.

Speaker 4

Perfect. That's really helpful color. And then just the last thing for me, I want to clarify, the pricing headwinds, it sounds like you expect them to ease in the second half of the year. That's the second half of calendar twenty twenty four, right, not second half of your fiscal twenty twenty five?

Speaker 2

Yes. In the second half, see, the feedback we have from the airlines is that we should start seeing some of the capacity come back in the month of July, August. And from there on then gradually capacity coming back before getting back to full steam by Jan, Feb, March of 2025. So I'm hoping that the capacity will continue to come back in line with the plans which the airlines are referring to.

Speaker 4

Okay, perfect. That's helpful. I appreciate the added color guys. Thank you very much.

Speaker 2

Sure. Thank you, Scott.

Operator

As we currently have no further questions, I will hand back over to Manish Hemherjani for final remarks.

Speaker 1

Yes. Thank you, Carla. Just want to thank everyone for joining the call today. As always, management is available for follow ups. Please feel free to reach out for the same.

Speaker 1

Thank you.

Operator

Thank you for joining and this concludes today's call. Have a nice day. You may now disconnect your lines.

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