Yatra Online, Inc.

Good day and welcome to the Yatra fourth quarter and full year 2021 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Manish Hemrajani. Please go ahead.

Thank you, Shelby. Good morning, everyone. Hope everyone and their families is safe and healthy. Welcome to Yatra's fiscal fourth quarter and full year 2021 financial results. for the period ended March 31st, 2021. I'm pleased to be joined on the call today by Yatra's CEO and co-founder, Dhruv Sringi. The following discussion, including responses to your questions, reflects management's views as of today, June 8th, 2021. We do not undertake any obligation to update or revise the information. Before we begin our formal remarks, allow me to remind you that certain statements made during the course of the discussion today may constitute forward-looking statements which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including factors that may be beyond the company's control. These include expectations and assumptions related to the impact of the COVID-19 pandemic. For a description of these risks, please refer to our filings with the SEC and our press release from this morning. Copies of this and other filings are available from the SEC and on the investor relations section of our website. With that, let me turn the call over to Dhruv. Dhruv, please go ahead.

Thank you, Manish. Good morning, everyone, and thank you for joining us. I hope that you and your families are safe as we continue to navigate our way to what we hope is going to be the last significant wave of the pandemic, especially in India. As you're all well aware, subsequent to the closing of a March quarter, India suffered a severe setback as the second far worse COVID wave hit the country with case counts peaking in the 400,000 a day range and many regions once again began to curb travel. Many of our friends and colleagues have been unfortunately impacted by the second wave and our thoughts and prayers are with them and their families. Thankfully, Since peaking on May 6th, case counts have sharply declined, and India yesterday reported 86,000 cases. That's a significant drop from the peak. A number of states and cities have started easing restrictions with effect from 1st of June, and more are expected to do so by the middle of this month. This easing of the curbs combined with the vaccination program has begun to show some early green shoots of recovery in travel, with our domestic travel bookings almost doubling between last week of May and first week of June. India has managed to administer over 230 million vaccine doses till date, and the government has committed to fully vaccinating all citizens before the end of 2021. In fact, the Prime Minister yesterday laid out a new roadmap for a more streamlined and accelerated vaccination program starting June 21st. We expect the vaccination drive to gain even more traction in July and August as more vaccines become available and expect travel to recover alongside it. As part of our helping the community initiative, you will recall that last year we had arranged buses to fly thousands of standard migrant laborers back to their hometowns across India during the lockdown. This time around, we launched a COVID Connect platform on our site. This platform is supported by a number of volunteers, including our employees. enabled people to get verified information on COVID-19 resources such as availability for oxygen, hospital beds, ambulances, medics, test centers, etc. And all of these things were in extremely short supply during the peak of the pandemic in the month of May. As we continue to navigate our way through this pandemic, I'm very proud of the dedication and effort exhibited by my Yatra colleagues, both internally and towards the larger community during these challenging times. While travel demand was subdued due to high case counts and partial lockdown across the country, I'm very confident that the industry will inevitably recover, and we have begun to see early signs of that in the past few days. As we look forward to the end of this pandemic, which we believe will be driven by the pace of vaccination in the coming months, we believe travel should recover strongly as evidenced by the strong recovery post the first wave. Now coming to our March quarter performance. I'm pleased to report Yatra had a robust March quarter driven by the recovery in domestic flight travel, where we saw passenger traffic recovering to about 20% of pre-COVID levels for the quarter. Adjusted revenue of $13.3 million was up 60% sequentially, and a combination of revenue growth and tight cost management helped us achieve positive EBITDA, adjusted EBITDA of $1.3 million. This was well ahead of plan, and we ended the quarter with a strong balance sheet as well with a cash balance of approximately $31 million. As we look to the year ahead, we see travel recovering towards the back half of calendar 2021 as vaccination accelerates and travel restrictions gradually lift, with domestic first in the near term and international travel towards the latter part of the year. On the consumer side, despite the second wave hitting us towards the end of the quarter, passenger traffic in the March quarter was up 21% sequentially, averaging over 60% of pre-COVID levels. On the international air front, recovery continues to be muted and it's now been further impacted by the second wave. We expect the recovery in international to continue to be more gradual and more likely towards the end of this calendar year and largely dependent on the case counts and rate of global vaccinations. Our hotel room nights booked saw a healthy rebound as domestic hotels saw recovery led by pent-up demand on the consumer side prior to the second wave. Our hotel room nights grew over 48% Q1Q and even exceeded prior numbers by growing 23% year-over-year, led by a rebound in the consumer demand, the strength of our brand, and our industry-leading hotel inventory, along with lower competitive intensity in the portals. We continue to make strong progress in the corporate segment and sign 21 new notable contracts in the March quarter alone to further solidify our position as the leading corporate travel service provider. These new customer signings in a challenging quarter further underscore Yatra's leadership position in the corporate segment in India and our ability to extend our platform to cross-sell other products and services. Our pipeline of prospective new customers continues to grow as inbound interest has increased meaningfully post-pandemic. We believe online penetration in the corporate travel market in India is approximately 10% to 15%. A larger part of the market today, about 60%, we believe is still underserved or served by smaller offline players. As a result of the pandemic, we are seeing evidence of an accelerated shift towards online players, especially as contracts come up to the end of life and rebidding. We remain confident in our platform's capabilities to serve and scale any type of customer. Corporate travel recovery is expected to lag consumer, but please do note that before COVID, corporate was growing at a faster rate, and we expect this dynamic to return post-pandemic. Coming to our fiscal fourth quarter results, We saw meaningful sequential recovery this quarter reflecting a recovery led by pent-up consumer demand. This recovery in domestic travel led to a sequential quarterly growth of 60% in adjusted revenue to $983 million, which is approximately $13.3 million versus about $8.3 million in the December quarter. This growth in revenue further combined with strong cost controls enabled us to achieve positive EBITDA in the March quarter well ahead of plan. Our adjusted EBITDA in the March quarter was INR 97.4 million which is approximately 1.33 million US dollars. This was a vast improvement from a loss of 36 million INR in the December quarter. We continue to hold our costs to the minimum and we believe we have adequate liquidity on the balance sheet to weather this second wave and see us back to sustained profitability. One other strategic road driver for us is the expansion of our corporate digital platform as we continue to add non-travel related digital offerings to our captive corporate customer base. As the largest corporate travel service provider in the country, we have strong relationships with some of the biggest and best known enterprises in India and we continue to make inroads into these organizations with our non-travel offerings. One of our non-travel offerings which has met with a great initial response is our solution for freight management. We are currently offering ocean and air freight booking services to our customers and will be expanding it to include surface transport later in the year. We are seeing very strong demand for this service offering, The freight industry, as some of you might know, is multiple times the size of the travel industry and exhibits similar attributes to what the business travel industry did about a decade ago. The industry is extremely fragmented and has very low levels of technology adoption. We are fortunate to be able to leverage the expertise we have acquired in building our own SaaS platform for popular travel over the years, and the same is being leveraged to build out our freight platform. We believe we have a great opportunity to create a fast platform for freight bookings along the lines of our corporate travel platform. Additionally, we are also looking to leverage our existing vendor and corporate relationships on both the supply and demand side for our freight business. Based on our current revenue run rate, we expect our freight business to generate between 1.5 million to 2 million US dollars of revenue in fiscal year 22, which we believe should grow to between 4 to 5 million dollars in fiscal year 23. Given the size and scale of the freight industry and its current dynamics, we believe that this is a business which could potentially grow to a similar size and scale of our corporate travel business pre-COVID over the next few years. We currently have a team of over 100 people focused on this and we will continue to grow this further. We are very excited about this and believe this is a great complementary addition to our platform. As of March 31st, 2021, the balance of cash and cash equivalents and term deposits on our balance sheet was INR 2.26 billion or approximately USD 31 million. When we come out of this pandemic, On the back of the secular growth in Indian travel, the acquisition of new corporate customers that we made during the pandemic, our digital platform business that is completely accretive and has the potential to grow to the size of our pre-pandemic corporate travel business in the coming years, we believe we should be on a significantly better revenue growth trajectory. This growth in revenue combined with the efforts we made during the pandemic to improve operational efficiency will significantly we believe lead to significantly higher levels of profitability and cash flow. I want to thank our shareholders who have stood by Yatra through these trying times. I'm hopeful and honestly believe it's only a matter of time before your patience and understanding is rewarded. I think this concludes our prepared remarks. Let me now hand it back to Manish for Q&A.