Yatra Online, Inc.

Welcome to the Yatra Online Inc Q4 2024 and Fiscal Year 2024 Financial Result Earnings Call. My name is Karla and I will be coordinating your call today. During the presentation, you can register to ask questions by pressing star followed by one on your telephone keypad. And if you change your mind, please press star followed by two. I will now hand you over to your host, Manish Hemraj to begin. Manish, please go ahead.

Thank you, Karla. Good morning, everyone. Welcome to our fiscal fourth quarter and FY24 financial results for the period ended March 31st, 2024. I'm pleased to be joined on the call today by Yatra CEO and co-founder Dhruv Sringi and group CFO Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today. May 31st, 2024, 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 filing 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.

Thank you, Manish, and good morning, everyone, and thank you for joining us for our fourth quarter and fiscal 2024 earnings call. We are pleased to report a solid 2024 fiscal year with an annual reported revenue of INR 4.2 billion, up 11% year over year, with air passenger volumes up 24%, nearly doubled the industry growth rate of 12%. For fiscal year 24, we largely met or exceeded all our amnest expectations. On a quarterly basis, gross bookings expanded 12% year-over-year in the fourth quarter of fiscal 24, driven by a 13.5% growth in air gross bookings. This growth was fueled by a robust rebound in international travel, Additionally, our adjusted EBITDA margins expanded by approximately 6% sequentially, reaching 110 million, approximately USD 1.3 million, from INR 44.5 million in the previous quarter. This was on account of optimization of customer inducement 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 repairs-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 25. For the quarter ended March 31, 2024, We reported revenues of INR 1.07 billion, which is approximately USD 12.9 million, down 10% year-over-year, and adjusted revenue of INR 1.79 billion, approximately USD 21.2 million, 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-19. of approximately INR 190 million. Excluding the benefits 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. 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 building potential of INR 5.4 billion. 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 two large MNC customers, signed up a large private sector bank, a large pharma company, and one of India's largest manufacturing conglomerates. 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. The Avtra expense management solution stands out with its utilization of cutting-edge technologies, including GenAI, 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. It also features an integrated chatbot based on GenAI and RAID 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 fourth quarter. Travel volumes in the IT sector continue to remain soft. in q4 however we are pleased to announce that volumes in the corporate segment overall for us are now back to pre-covered 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 US authorizing a repurchase of up to $5 million of our NASDAQ listed YPRA shares. We are pleased to announce that under this program, we have repurchased 3.18 million shares for approximately $5 million. 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. This enhancement is designed to provide a more seamless and intuitive booking experience to our customers, driving greater engagement and satisfaction. One of the key features of this UI 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. The user-friendly 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 a 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 standards. 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 bundle solution. We recently also got on board a senior executive who was prior to this the CEO of one of the large corporate travel management companies in the country. This gentleman has joined us as a 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 rentals 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. While these additions have led to an increase in salary 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 24 from 7% in the previous year. This is the third 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, all go 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 in the public infrastructure. India's ambitious goal to be a 5 trillion economy by 2025 has driven planned investments of about 1.4 trillion in the national infrastructure pipeline. This unparalleled growth in infrastructure injection bodes well for our industry as these investments are translating