Yatra Online, Inc.

Good morning and welcome to the YATRA's fourth quarter and full year 2023 earnings conference call. My name is Carla and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Manish Hamrajani. Please go ahead.

Thank you, Carla. Good morning, everyone. Welcome to Yatra's fiscal fourth quarter and FY20 financial results for the period ended March 31st, 2023. As always, I'm pleased to be joined in the call today by Yatra CEO and co-founder Dhruv Sringi and CFO Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today. May 30, 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 lists 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 file earlier this morning. Copies of this and other filings are available from the SEC and also on the IR section of our website at investors.kyatra.com. With that, let me turn the call over to Dhruv. Dhruv, please go ahead.

Thank you, Manish. And good morning, everyone. Also, thank you for joining us today for our fourth quarter earnings call of fiscal 23. We wrapped up the fourth quarter of fiscal 23 with our strongest quarter yet since the onset of COVID. We registered an exceptional year-over-year growth of 97.4% in revenue and 93.3% in adjusted revenue. This strong performance is attributed to the market recovering and also gaining shares in recent quarters in both our consumer and corporate travel businesses. And this has enabled us to achieve the highest incentive levels with most of our airline and GDS contracts for the full fiscal year 2023. India's domestic passenger traffic saw a sequential growth of 4.6% in the quarter ended March 2023. Compared to this, our domestic passenger traffic grew 33% sequentially. reflecting strong market share gains for both our consumer and corporate businesses. Notably, we signed a record number of 97 medium to large corporate customers in the year ended March 31st, 2023. This is a testament to our corporate segment leadership and capabilities and the continued recovery in the travel sector. On the consumer side, our strong brand and high brand recall helped grow the B2C business also significantly faster than the industry growth rate. A favorable macroeconomic backdrop with the domestic travel market in India surpassing pre-COVID levels also contributed to our impressive turnaround. Our revenue and adjusted revenue for the quarter ended 31st March 2023, were reportedly at INR 1.19 billion, which is USD 14.5 million approximately, and INR 1.89 billion, which is USD 23.1 million respectively. These were well ahead of our projected guidance range of US dollar 19.5 to 20.5 million in adjusted revenue issued last quarter. Adjusted EBITDA for the quarter reached INR 185.6 million, which is approximately USD 2.3 million, marking a significant increase of 251% year over year. The domestic aviation in India between quarter four of fiscal year 2022 and 2023 grew 52% year over year, reflecting a swift recovery from the lows of COVID, and the long-term growth trajectory for the Indian travel market remains very positive. This positive momentum has carried over into the new fiscal year as well, with April 2023 domestic air traffic rising 17% year over year, to 12.9 million passengers. International travel has also shown a steady improvement during the quarter ended March 31, 2023. It reached approximately 90% of pre-COVID levels as well. As we move forward, we remain optimistic and committed to leveraging these positive trends to drive further growth and success. I'll now give you a quick update on our ongoing IPO process in India. As you might recall, Yatra Online Limited, our Indian subsidiary also referred to as Yatra India, filed a draft redheading prospectus on March 25, 2022 with SEBI. This is in preparation for a potential initial public offering in India. The plan includes listing Yatra India's equity shares on the Indian Stock Exchange, hence referred to as the Indian IPO. On November 17th, 2022, we received the final observation letter from Sadi indicating that the IPO can open for subscription within a year from the set date. In light of this, we embarked on our India investor outreach in the early parts of the March quarter. This involved engaging with prominent investors in India, including leading domestic mutual funds, family offices, and hedge funds in the Indian market. The feedback has been very positive due to our strong performance, the evident recovery of both consumer and corporate travel businesses in India, and the favorable macro trends that suggest a potential for substantial growth in the sector for years to come. However, due to the broader macro environment in the global market, the investor feedback process has been lengthier than what we anticipated. Despite this, we have noted that key investors continue to express interest and engage. Our strong operating performance and macro tailwinds behind the industry give us the confidence in our prospects for a successful IPO in the near future. Aside from bolstering our financial position, we believe that this offering will provide us with the opportunity to be more assertive, pursue new corporate businesses, and also explore strategic alliances with partners who might not have been comfortable with an overseas structure in the past. Moving on to further details on the quarter, our consumer business gained further momentum on the back of the strong brand recall that the Yatra.com brand continues to enjoy in the market. And during the quarter, we closed 25 new corporate customers to close the full year with a record number of large and medium corporate customer signings of 97. as corporate travel continues to recover strongly post-COVID. International travel also continues to improve. As I mentioned earlier, it exited at about 90% of pre-COVID levels, and with the lifting of all restrictions now pretty much across Asia Pacific, we expect recovery in international travel to be pretty disc, and we expect international travel to make up for some of the lost ground over the course of the last 12 months. On the hotel front, our adjusted revenue was up 49.3% year-over-year, with standalone room nights up 34% year-over-year. Packages grew 35%, albeit from a small base. From a competitive standpoint, the intensity has remained stable from last quarter and remains manageable overall. In our drive for innovation in AI and data sciences and creating corporate sales growth and technology innovation, We made two key appointments this quarter. We welcomed Dr. Shakti Goyal, a seasoned technologist from IIT Delhi and MIT as chief scientist and chief data architect. We also welcomed Tarun Kumar Bakri as vice president corporate sales. He's a seasoned sales leader with three decades of travel domain experience and in his last role led American Express's sales efforts in India. From a macro standpoint, the Indian government remains strongly committed to the growth of airport infrastructure in India. An investment of roughly $3.3 billion has been earmarked for expenditure through FY26, signifying a substantial commitment towards infrastructure development. More than 70 projects worth approximately $2.2 billion are projected for completion by mid 2024. These projects encompass a wide array of improvements and expansions across several Indian cities. Notable initiatives include the construction of a new Greenfield Airport in Rajkot, extension of terminal buildings in Surat and Goa, expansion of the civil enclave at Gwalior Airport, and the construction of a new ATC tower in Calcutta, amongst others. Additionally, the government predicts a massive investment influx into India's aviation sector in the coming years. Over the next three years, it is estimated that both private airport operators and the state-owned airport authority of India will invest approximately $12 billion into this sector. This significant financial infusion is anticipated to increase the number of operational airports from the current tally of 140 to over 200. This strategic investment aligns with the government's vision of enhancing accessibility and connectivity across the nation on the liquidity front as of march 31st 2023 the balance of cash and cash equivalents and term deposits on a balance sheet was inr 1.09 billion which is approximately usd 13.3 million we plan to also start repaying the mac debt facility that we had taken on towards the end of calendar year 2022. We will start paying this off in tranches starting with the first tranche by June 30th and expect to repay the entire facility before its due date. We believe we remain adequately capitalized and have sufficient working capital facilities in place to continue to fund the robust growth in our corporate business. Given the ongoing recovery in corporate and leisure travel, our continued success in signing new large and medium sized enterprise customers, we believe we are poised for a strong FY24. Aside from seasonality, we expect our results to benefit from accelerating growth in both our corporate business and consumer business as we continue to add to our formidable blue chip customer base and leverage the strength of our brand. Just to reiterate, today Yatra serves one out of four of the top 100 listed companies in India by market cap, three out of the big four accounting firms and three of the top five technology companies in India, amongst others. Now onto guidance for FY24. Based on macro factors and our quarterly trends to date, we anticipate an adjusted revenue range of USD 88 to 92 million in constant currency for FY24, which translates to a growth range of approximately 18 to 23%. Taking advantage of the leverage in our business model, we anticipate that the adjusted EBITDA will grow at a much faster pace of 46 to 50% in FY24. Before I hand over to Rohan to walk you through the financial performance in more detail, I would like to talk about the recent bankruptcy protection filing by GoAir. On May 2nd, 2023, Go Airlines India Limited, or Go First, one of the smaller domestic airlines, filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal in India, citing the supply of faulty aircraft engines and failure of its engine supplier to replace them on time, which resulted in grounding of half of its fleet and consequent operational and financial issues. On May 10th, 2023, The Company Law Tribunal admitted the application and granted protection to Go First by imposing a moratorium against recovery by lessors, lenders, and other creditors of Go First. In addition, the Company Law Tribunal has appointed an interim resolution professional to operate Go First and to maintain Go First as a going concern. Yatra India has made the appropriate filing with the interim resolution professional in connection with its claims and as of date thereof go first has suspended all flights until may 30th 2023. goa's market share at the time of its filing for bankruptcy was approximately 6.4 percent and it's one of the relatively smaller airlines operating in india and given the amount of incremental capacity being added in the country by the other airlines we expect only a marginal impact on our business of GoAir's bankruptcy. While we remain optimistic that GoAir will commence operations in the near term, we have, as a matter of prudence, created a one-time provision of INR 39 million against the full amount that was due to us from GoAir at the time of this filing. Finally, I would like to express my deepest appreciation to our dedicated employees and shareholders for their unwavering support. With that, let me hand it over to Rohan to walk you through the details of the financial performance. Rohan?