Yatra Online, Inc.

Hello, and welcome to the Yatra Fiscal Third Quarter 2023 Financial Results Call. My name is Alex. I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star 1 on your telephone keypad. If you'd like to withdraw your question, you may press star 2. I'll now hand over to your host, Manish Hemrajani, Head of Investor Relations. Please go ahead.

Thank you, Alex. Good morning, everyone. Welcome to Yatra's fiscal third quarter 2023 financial results for the period ended December 31st, 2022. I'm pleased to be joined on the call today by Yatra's CEO and co-founder, Dhruv Sringi, and CFO, Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today, March 28th, 2023. We don't undertake any obligation to update or revise the information. Before we begin our formal remarks, allow me to 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 month. Copies of this and other filings are available from the SEC and also on the investor relations section of our website. With that, let me turn the call over to Dhruv. Dhruv, please go ahead.

Thank you, Dhanush. Good morning, everyone, and thank you for joining us today for our third quarter earnings call of fiscal 23. Before we discuss our results for the quarter, let me first provide you with an update on our ongoing India IPO process. As you may recall, our Indian subsidiary Yatra Online Limited filed a draft redheading prospectus just about a year ago on March 21st, 2022 with the Securities and Exchange Board of India. Teddy has issued the final observation letter dated November 17th, 2022 to Yatra, which means that Yatra India's proposed initial public offering can open for subscription within 12 months of that date. We commenced our India investor outreach, the India Roadshows, in earnest at the beginning of the March quarter. We met with a number of market investors in India, including large domestic mutual funds, family offices and hedge funds who are focused on the Indian market. Our story has been well received given the strong underlying performance, the strong recovery in both consumer and corporate travel in India, and favorable macro trends for sustained long-term growth, which are supported by the government prioritizing infrastructure spending in the aviation sector. However, given the overall macro environment and the global market sentiments, the investor feedback process has taken longer than expected, but the key investors continue to remain engaged with us, and they are hopeful and confident of getting the IPO done in the near term. Switching tracks to the macro of the business environment, in the December quarter, domestic aviation witnessed a strong recovery with air passenger traffic up 17% year over year and 19% queue on queue. The Indian government remains committed to growth in this sector by way of infrastructure spending on new airports and expansion of existing airports. Under the UDAN scheme launched by the government in October 2016, More than 425 new air routes have been commenced to date with plans to take that number to a thousand by 2026. The number of operational airports have also grown in the last five years from 74 to 141. And the government plans to have 220 airports operational by 2026. Last month, the now privatized Air India placed two mega orders, one with Airbus and the other with Boeing, adding up to 470 aircrafts. 70 of these are for wide-body aircrafts and double-aisle planes, which are going to be used for long-haul international travel, and 400 are for narrow-body single-aisle aircrafts to be used for domestic and near-shore destinations. Air India's current fleet size is approximately 115 aircrafts, nearly quadrupled on the back of this order and that takes the expected number of planes in India to grow by over two and a half times from the approximate 700 planes at the moment to almost 1700 planes by 2027. The outlook for aviation market in India remains very favorable and we expect that the long period of sustained growth on the back of these initiatives. India's domestic traffic has now grown to about 2% of the overall world share from 1.6% pre-COVID, but still remains well below China's 6.4% world share, which suggests that there are multiple years of growth ahead of us as we get into a similar environment as China over the next two years. India's hotel industry too turned in the stellar 2022 with revenue for available rooms or rest parks recovered to pre-COVID levels despite a slow start to the year 2022 caused by a surge in the Omicron variant. Anecdotally, if you look at the results of some of the large hotel chains, they have posted some of their best quarterly results in a very long time in the December quarter. We see that domestic occupancy levels and red power have all now surpassed pre-COVID levels with corporate momentum stronger than leisure as compared to pre-COVID. From a macro standpoint, the IMF predicts India's GDP to grow at about 6.8% in fiscal 2023. As we have mentioned previously, the travel industry has historically grown at approximately 1.5 to 2x GDP growth in developing markets. We continue to believe that we should be able to achieve growth above market rates, driven by share gain in the corporate travel market, and the ongoing secular shift from offline to online in the consumer market. Given the ongoing recovery in corporate and leisure travel, our continued success in finding new large and mid-sized enterprise customers, we believe we are porous for a strong calendar 2023. Aside from seasonality, We expect our results to benefit from accelerating growth in our corporate business as we continue to add to our blue-chip customer base. Just to reiterate, today, Yatra India serves one out of every four of the top 100 listed companies in India. We service three of the big four accounting firms and we service three of the top five technology companies in India. Indeed, an enviable client base. Now onto our fiscal Q3 results. I'm pleased to report that we delivered strong year-over-year growth of 43% in adjusted revenue given by recovery in both our consumer and corporate travel business. The recovery was on account of the domestic travel market in India rebounding back to pre-COVID levels along with the onboarding of new corporate customers in our corporate business. In fiscal year 23, we have signed a record number of over 72 medium to large corporate customers in the first nine months of this fiscal year as the travel recovery has gained momentum. Our revenue and adjusted revenue for the quarter came in at INR 902 million, which is approximately USD 11 million, and INR 1,489 million, which is approximately USD 18 million respectively. So revenue close to $11 million in the quarter and adjusted revenue close to about $18 million in the quarter, respectively. Marginal decline in adjusted revenue by 1.7% sequentially was on account of seasonality in our corporate business. The December quarter typically is the slowest quarter for the corporate business because of the large number of holidays, both on account of Diwali, which happens in October, and then Christmas towards the year end. Adjusted EBITDA for the quarter came in at INR 36 million, approximately USD 400,000. The decline in adjusted EBITDA by INR 8 million is due to higher legal and professional services costs, mainly relating to increased compliance costs year over year. Our consumer business remains strong on the back of the holiday season and strong growth in the aviation industry. Overall, domestic air travel industry volumes expanded by around 19% in the third quarter. Domestic travel ended surpassing pre-COVID levels as well in the current quarter. We also saw continued strength in new corporate customers with 72 new signings in the first nine months. And the December quarter, as we said, has been a lean quarter given the nature of the industry. International travel continues to improve during the quarter ended December. This is following the easing of international travel restrictions and reached approximately 88% of pre-COVID levels. With the lifting of all travel restrictions in the Asia-Pacific region, which has lagged the global recovery in international travel, we are now optimistic in the outlook for a sustained recovery in near-shore international travel as well. On account of the above factors, our adjusted air revenue was up 39.2% year-over-year, with air gross bookings up 37% year-over-year. On the hotel's front, our adjusted revenue was up 21% year-over-year, with standalone room nights up 16%. Please do note that our standalone hotel room nights were up 33% compared to stand-alone hotel room nights in the pre-COVID era of 2019. This is on account of the hotel business continuing to benefit from stronger corporate demand, as more and more corporates come under the managed hotel program, and our partnership with Flipkart owns Toyota. Packages grew 41%, albeit from a small base, as seasonality played its part in the December quarter. On the liquidity front, as of December 31st, The balance of cash and cash equivalents and term deposits on our balance sheet was INR 1,083 million, which is approximately USD 13.1 million. And this is an increase of INR 380 million or US dollars 4.6 million versus the September quarter. During the three months ended December, we raised debt of INR 300 million for the purpose of meeting our working capital requirements. This was raised from a non-banking financial corporation in India. And subsequent to the end of the quarter, we have been sanctioned, secured sales invoicing and working capital facilities to the tune of INR 902 million from Vesic Indian banks, taking our total facilities in place in India to INR 1,452 million versus the pre-COVID level. of INR 1,300 million. With these facilities in place, we believe our balance sheet is strong and we are adequately capitalized and have sufficient working capital financing facilities in place to continue to fund the robust growth in our corporate business and be in a position to repay any obligations that come up in the later part of the year. Given that we are almost at the end of the March quarter, we thought it would also be proven to share some preliminary expectations for the March 2023 quota. A record high number of Indians traveled by domestic air per day on an average in February 2023, surpassing the previous high of November 2019. On average, 431,000 people traveled in domestic flights per day in February. This was up 6.5% from January. and higher than the previous record of 430,000 in November 2019. Based on such quarterly trends to date, we anticipate an adjusted revenue range of INR 1,650 million to INR 1,700 million, which is approximately USD 19.5 to 20.5 million for the March 2023 quarter. And this would translate to a sequential growth rate of between 10% and 14% on a queue-on-queue basis and also make the March quarter our strongest quarter since the start of COVID. In addition, during the March quarter, our Indian subsidiary, Yatra Online Limited, also set up our wholly-owned subsidiary in Dubai. The objective of this subsidiary is to focus on expanding our software platform for corporate travel to customers in the Middle East and Africa. With that, let me hand you over to Rohan to walk you through the details of the financial performance.