TBO Tek Limited (TBOTEK) Earnings Call Transcript & Summary

Good evening, everyone. I'm Aashvi Shah from Adfactors IR. On behalf of TBO Tek Limited, I would like to welcome you all to the earnings conference call for Q2 and H1 FY '25. Today, on this call, we have with us from the management, Mr. Ankush Nijhawan, Co-Founder and Joint Managing Director; Mr. Gaurav Bhatnagar, Co-Founder and Joint Managing Director; Mr. Vikas Jain, Chief Financial Officer; Mr. Anil Berera, President, Strategy; Mr. Akshat Verma, Chief Technology Officer; and Mr. Rajiv Kumar, Head, Investor Relations. We will begin the call with brief opening remarks from the management, followed by a Q&A session. [Operator Instructions] Please note that certain statements made during this call may be forward-looking in nature. Such forward-looking statements are subject to certain risks and uncertainties that could cause the actual results or projections to differ materially from those statements. TBO Tek will not be in any way responsible for any actions taken based on such statements and undertakes no obligation to publicly update these forward-looking statements. I would now like to hand over the call to Mr. Gaurav Bhatnagar for his opening remarks. Thank you, and over to you, sir.

Thank you, Aashvi, and good evening, everyone. Welcome to our investor presentation for Q2 FY '25. So I'll start with the executive summary for the current quarter. We had a very strong quarter. And in fact, if you compare our H1 numbers and Q2 numbers, you will observe that Q2 was stronger than Q1. Overall, we saw a year-on-year growth of 6% on the transacting buyers, the monthly transacting buyers, and we hit more than 28,400 buyers -- travel agents buying from us on the platform in this quarter. Year-on-year, GTV grew very strongly by 24% to hit almost INR 8,000 crore. Revenue grew by 28% and GP grew by 35%. Revenue and GP are growing faster than the GTV because a lot of our growth is coming from the hotels business, which, as you all know, is a higher-margin business, and we'll talk a little bit more about it in subsequent slides. On the whole, compared to Q2 of last year, our EBITDA has grown by 24% and the similar growth for H1 as well. So the big highlight for this quarter has been the increasing saliency of the hotels business. 59% of GTV was driven by hotels. This corresponded to 79% of our revenue being driven by the hotels and non-air business and 84% of our gross profit is now driven by the hotels and non-air business. The hotels business grew in both India and international segments. In India, the hotels GP was up 26% year-on-year compared to Q2 of last year. Outside of India source markets, the GP grew even faster at 49% year-on-year. A lot of this growth is driven by some key initiatives that we've been running for the -- in H1 of this year, and I'll talk about those in the coming slides. Our international footprint expansion is also on track. We've recently incorporated a new subsidiary in Australia to expand our operations over there. Finally, before I delve further into the numbers, I just want to welcome 2 new members to our Board. Mr. Shantanu Rastogi has joined the Board of the company. Mr. Rastogi is MD and Head for India at General Atlantic. As you would know, General Atlantic is a large shareholder in TBO. Apart from that, Akshat Verma, who is the CTO for the company, has also joined the Board. We welcome them both to the Board and their diverse experience will enrich the Board and strengthen our corporate governance as well. Looking at our KPIs, we track active agents -- growth in active agents as a North Star metric. Our active agent base grew by 6% compared to same quarter last year. Our active bookers grew by 9%, which is a promising metric, and we've talked about it in the past as well. The difference between agents and bookers is that an agency will have multiple bookers using our platform. So if number of bookers grows faster than number of active agents, it usually means that existing agents are increasing their engagement with the platform, which is a fair proxy for increasing share of wallet as well. So while the active agents grew by 6%, active bookers actually outpaced that growth and grew by 9%. Like I mentioned, this is one of the -- probably the first quarter where hotels at the GTV level has been majority of our business, and there's a sharp increase in saliency of the hotels business. Q2 of last year, we were at 47% of the GTV being driven by hotels. It's crossed to 59% this quarter. Just to double-click a little bit more on that. Only talking about the hotel segment now, you will see that there's a very sharp growth in monthly transacting buyers buying hotels from us. So this number is up by 13% on a year-on-year basis. If you look at the growth in the international market, which is source markets other than India, this growth is actually quite steep at 26%. So we added nearly 2,000 more active monthly transacting buyers compared to the same period last year. Similarly, the GTV growth in hotels at an enterprise level is 56%, 9% growth in India as a source market and 64% growth in the international source markets, which includes Jumbonline as well. The revenue grew by 36%. And again, you would see a very sharp growth of almost 40% in revenue in the international source market and a 48% increase in hotels gross profit. So just to reiterate, the numbers on this screen are for the hotels business only, which is driving most of the enterprise growth. I want to delve into a couple of key initiatives that we've been working on and investing in, in the last 6 months, and they are starting to show results now. We had briefly talked about the H-Next platform, which is our new state-of-the-art booking engine built on the latest technology. This program was in a small pilot last time we presented. So roughly 3% of our users in the international source markets were using the platform. We expanded coverage to now 13% of our users. And overall, we are seeing better engagement metrics and better conversion metrics on this platform. A few key things that I want to highlight. It's a very fast one-click discovery platform. So some of the key search criteria on the hotels platform that we're enabling are complex searches. For example, if a customer has asked a travel agent to book a hotel in Dubai, in the Palm area with a sea view with a 2-bedroom suite, but a refundable rate and breakfast and dinner included. These kind of complex queries are very hard to solve even on B2C OTA platforms today. So the way we have architected this platform, such queries are enabled at an extremely fast pace. And the whole thesis is that when customers go to travel agents, they are looking to book complex itineraries. And these are the questions they often have for travel agents. So our belief is discovery and bookability of hotels will become quite much more efficient compared to our previous booking engine with this new platform. We've been also working on incorporating artificial intelligence and big data technology into our -- into various functions. Two specific experiments that I want to talk about today because both of them are starting to show meaningful results now. The first one is AI-driven pricing. So on our enterprise business, which is a business where we sell to large customers via API, we've rolled out our AI-driven dynamic pricing platform. This is a real-time signaling platform, which decides how much markup to put on every search in real time basis a variety of data signals. Right now, it is rolled out for 25% of our wholesale customers, our enterprise customers in the international source markets. And we've seen promising results. So we've seen some improvement in our take rate for this cohort. This remains a key focus area for us because the international wholesale business is a significant portion of the business. And this business is largely -- is extremely price sensitive because it is largely driven through an API connectivity. So our belief is that in the long run, as we continue to invest in this program, we will see some improvement in our take rates for the overall enterprise hotels business. The second initiative I want to talk about is using some new AI tools, specifically LLM-driven voicebots to automate some of our call center and back-office processes. The early results on this are very promising. So we've done about 7,000 calls in the last couple of weeks since this rollout. And what we've seen is a 60% success rate, which essentially means that in 60% of the 7,000 calls, the outcome was similar or better to what would be the outcome if a human being was making that call. So very early days on this program, but our hope is that this will allow us to improve our customer experience, make it more consistent and also help us reduce costs of customer service as a function of our GTV in the long term. But I must caution these are both early-stage projects, and it will take several quarters before we see material difference in our P&L because of these initiatives. Finally, I want to give you a quick update on our Jumbonline integration. As you would remember, we had completed this acquisition in December of last year. Jumbonline is an aggregator of hotel supply in Spain, Italy and other Mediterranean coastal destinations, primarily serving tour operators in U.S. -- in U.K. and Europe. So the business has shown meaningful growth in the last 12 months and now contributes almost 8.5% of our enterprise GTV and 7.6% of our revenue. The supply integration between Jumbonline and TBO is progressing well. This is where TBO supply is being pushed into Jumbonline customer base and vice versa, Jumbonline supply being pushed into TBO's customer base. We have done approximately $10 million of GTV. So still numbers are small, but the growth trajectory looks promising. You may recall that the Jumbonline project integration has a 2-year window where we have staggered payments this year and end of next year, which was linked to a shared service agreement, which we had with the original -- with the seller. Now given the promise that the project is showing, we have fast tracked this integration by a full year. So the integration that was supposed to be completed by 1st November 2025 has been fast tracked and completed by 1st November of this year. Essentially, what this means is that we have taken over the back office and mid-office for Jumbonline within the TBO ecosystem. So the whole back office process, the operations, customer service, finance, ERP, all of those processes are now streamlined and combined with the TBO operations. This will allow us to, one, standardize our back-office processes for Jumbonline; have some cost optimization and also set up the business for future growth. So our belief remains -- the investment thesis remains consistent of what we have committed to in the past. Now I'll hand over to Vikas to talk about the detailed financial performance for the quarter. Vikas, over to you.

Yes. Thanks, Gaurav. Good evening, and very warm welcome to everyone on this call. I'm pleased to share our financial results for Q2 and first half of FY 2025. For the quarter ended 30th September '24, at an enterprise level, we saw a good growth in key performance metrics. Our monthly transacting buyer base expanded by 6%, driving a 24% year-on-year increase in GTV. Our revenue from operations reached INR 450.7 crore, up 27.9% year-on-year. Our enterprise take rate improved from 5.51% to 5.68% year-on-year. Breaking this down further, the airline business take rate rose from 2.46% to 2.6%, while the take rate for the hotels and ancillary services saw a decline from 8.67% to 7.59% year-on-year, primarily due to the consolidation of Jumbo numbers. So Jumbo operates on the markup model with minimal incentive passed to the buyers and thus, the take rate and gross profit are similar. Gross profit as a percentage of GTV for the quarter improved from 3.54% to 3.86% on a year-on-year basis. This enhancement was largely driven by the increased share of hotels and ancillary services within our GTV, which rose from 47% to 59% year-over-year. On the profitability front, adjusted EBITDA reached INR 89.6 crore, representing a 24.5% year-over-year growth, while profit after tax came in at INR 60.1 crore, showing a 7.1% increase over the previous year. For the quarter, our adjusted EBITDA margin stood at 19.89% and PAT margins at 13.33%. Turning to our performance for the first half of FY 2025. Cumulative GTV for H1 grew by 19% year-over-year, driven by a consistent growth in our buyer base by 6.6%. Our revenue from operations totaled INR 869.2 crore, marking a growth of 24.7% compared to the first half of last year. For the first half of the year, adjusted EBITDA reached INR 174.7 crore, up 23.9% year-over-year and PAT totaled at INR 121 crore, reflecting a 17% increase. Our adjusted EBITDA margin for H1 stood at 20.1% and PAT margin at 13.92%. Additionally, it is important to note that income tax is now applicable to our wholly owned subsidiary in UAE from beginning of the financial year, and thus H1 tax expense includes provision for that liability. Our balance sheet remains robust with a net worth of INR 1,075.9 crore as at 30th September 2024. Notably, our working capital continues to remain negative. Our cash and bank balances are also strong, standing at INR 1,372.8 crore as of September 30, 2024. Thank you, everyone, and we'll now hand over the call back to Aashvi.

[Operator Instructions] We have the first question from Mr. Karan Uppal.

Congratulations on a strong set of numbers. So Gaurav, first question is on the international markets. So the GTV growth in international is quite strong at 60% plus on a Y-o-Y basis. Even on an organic basis, it is very healthy at 36%. So just wanted to check with you which markets or countries are you seeing very strong traction? And also, we have heard from U.S.-listed players that they are seeing some moderation in the leisure travel. Are you sensing the same? That's the first question.

Okay. So Karan, the growth has been quite secular actually. Most markets, for example, Middle East has shown strong double-digit growth even on a larger base, while APAC has shown very high growth volumes. In terms of overall share, Europe as a source market has now become our largest source market, both with Jumbonline definitely, but even if you were to exclude Jumbonline business, Europe -- the core business in Europe has become very large, and we continue to see traction over there. We've seen the commentary from other players on some headwinds in the market. I think while the macroeconomic picture is clear, there is geopolitical stress in certain markets, some of our source markets as well. Here, we just want to reiterate what we said last time as well. Ultimately, our business is aggregating existing demand. So we are hoping that we will be able to continue to grow until -- unless we see very significant headwinds come in. So far, what we see is that we should be able to continue the growth momentum into Q3 as well. That's the picture that is visible to us at this point in time.

Sure. Secondly, on the take rates. So if I look at the hotel take rates, so on a quarter-on-quarter basis since last 2 quarters, we are seeing steady increase in the take rates. Now it is at 7.6%. So do you think 7.6% is a ceiling or it can increase further from there on?

So Karan, the whole focus right now, especially in the international markets is on top line growth. We are a platform business. So any significant increase in take rate is often at the expense of our travel agent partners. So generally, the view remains that we try and maintain our take rates where they are. The whole thesis is that EBITDA should grow via operating leverage, not from take rate expansion.

Okay. Very clear. And lastly, monthly transacting buyers have seen a small drop in India. So what led to that, if you can explain?

So basically, India, you see is a high -- very high base of transacting buyers. So in this quarter, the growth was muted. However, we are focusing in current year to penetrate more into the Tier 4 and Tier 5 cities to increase our buyer base in India.

But Karan, on the hotel side, our buyer base increased by almost 4% because what you're seeing is obviously one number. On the air, yes, we kind of lost about 300, 400 long-tail agents because of reasons mostly in the domestic airlines. But overall, our top 1,000 agents, there's no churn there at all, which are obviously the significant contributor in our business.

The next question we can take from Mr. Manik Taneja.

Congratulations for the steady performance. This question was with regards to the progress that you're making with Jumbonline. You spoke about fast-tracking the integration and a certain focus on cost efficiencies going forward. It would be great to essentially understand today, when I look at your operating expenses below gross margins, they add up to close to about 2.8% of GTV, and this number has actually increased compared to first half of the year as well as FY '24. When do you think we start to see some operating leverage flow at this level and which would basically translate into higher EBITDA profitability as a percentage of GTV?

Manik, it's a fair question. And look, I think it's a very measured call on the part of the management to continue to invest in growth. As you know, a lot of our growth is dependent on market expansion and increasing coverage of travel agents globally. That's the North Star metric that we are tracking for. So what we typically do is that to make sure that we can sustain the growth that we are showing right now, we continue to front-load a lot of our sales hiring because there is a lag between when you hire people and -- when you open a market, when you hire people in the region and when they start to meaningfully contribute to growth, right, especially in the retail business, you have to sign up hundreds of small customers before they kind of make a dent on the big number. So what's likely going to happen is that our focus will remain on GTV growth, active agent growth. And hence, we will continue to invest a lot of the cash that we are generating from operating leverage back into the business, right? And so while you would see that the EBITDA margin is still pretty strong, about 20% EBITDA margin. We would be quite happy if we can maintain the 20% EBITDA margin while continuing to invest into the growth initiatives we are taking. So no immediate plan to focus on expanding EBITDA margin at this point in time, given the runway for growth is so long.

Okay. Second question was a clarification question for Vikas. If I'm doing the math correctly, it appears that on an organic basis, our GTV growth was about 13.5%. Just could you just confirm that?

For the quarter? Year or quarter?

For the quarter.

Yes, around 14%, yes.

The next question is from Mr. Swapnil.

So my first question is on the air ticketing side. So we have been seeing this slowdown for quite a while now. And we have called out saying that there were some pressures on the domestic air ticketing side. How long will it take to see a turnaround in this business? And what will be the share of domestic ticketing right now to your GTV within airline?

So in terms of the share of the domestic ticketing in the air GTV, it contributes around 1/3 in terms of GTV per se, so yes, we have seen marginal decline in GTV in terms of the air numbers year-on-year. And primarily, we are working on the same. So this quarter, we are looking at -- at least we should have a flat or some single-digit growth in GTV numbers in air for the coming quarter.

Okay. And the second question is on Jumbonline. So if you -- the number that you mentioned, 8.5% of the total enterprise GTV, that adds up to around INR 670 crore of GTV from Jumbo. If I'm not wrong, last quarter, that number, I mean, the previous quarter, it was around INR 800 crore, INR 900 crore. So is there any particular reason why the decline in that number?

Swapnil, I think it's a very important question because to explain how the Jumbonline business operates. The Jumbonline business is very heavily dependent on the summer inbound traffic into Spain, Palma, the Balearic Islands and the rest of the Mediterranean destinations. Because the way our accounting works is that we book revenue when we complete the online transaction, but not on check-in. So the Jumbonline business has -- revenue gets booked much earlier than the check-ins because in Europe, largely people are booking their summer holidays in our FY Q3 and FY Q4. Q2 is actually when bulk of the check-ins happen, but the revenue was already booked because the check-in -- the bookings happened much earlier. So in the Jumbo business, the seasonality is going to be slightly different from our core business. And you will see more revenue outside of the heaviest check-in season because most of the bookings will happen in Q3 and Q4.

Understood. And how should we see the trend playing out next quarter because it's a holiday season?

For Jumbonline?

Jumbo, yes.

I think broadly, look, we don't know specific guidance and the business is also very new for us. It's first full year for us in the business. But our sense is that it should continue to remain steady. We are not expecting too much of variation either way.

Okay. Got it. And just last question on the hotels organic growth. So that would be around 33%, if I'm not wrong, for this particular quarter. It was slightly lower last quarter. But again, then there are some headwinds -- talks about leisure travel headwinds. How should we think it from the near term? I mean, next 1 or 2 quarters, how should we be projecting those numbers?

See, Swapnil, like during the last call, we discussed that Q2 is typically heavier than Q1, and that kind of played out for us because of seasonality. Similar to that, Q3 in our business is usually the weakest quarter because it's end of summer. So if you look at October, November, December, except for the Christmas and New Year, largely no major triggers for leisure bookings. So you would expect historically, and you would see historical numbers as well, Q3 is usually weaker than Q2. We expect similar trend. But on a year-on-year basis, we expect to continue the momentum on the international source markets.

[Operator Instructions] The next question is from Mr. Prateek Kumar.

My first question is on take rate in hotel business. So we have seen some improvement on a quarter-to-quarter basis in hotel business. So first quarter had probably impact of -- I mean, last 2 quarters had impact of integration of Jumbonline. But we're sort of looking at like a 7.2% kind of take rate there. So it has improved 30 bps there. So any specific reason there?

So Prateek, again, as you see this quarter, the Jumbo contribution in overall GTV is lower than what it was in the last quarter. So that's the key impact coming in, in the take rates is primarily to the mix impact of the Jumbo consolidation. On the core business, we are kind of keeping or managing the similar kind of take rates quarter-on-quarter.

So likely, it should sort of revert back to that 7.2% kind of number like going forward?

It should remain in the range, you may see slightly movement, but it should remain in the range of between 7.2% to 7.6%.

Sorry, 7.2% to 7.6%?

Yes.

Sure. Also, can you suggest like after 1H, what has your employee base moved to? And how is your international employees in your overall mix?

See, the employee base is roughly about 2,100-odd including contractors. A lot of -- so I don't have a split handy with me on -- so about 200 employees have been added or employees/contractors have been added in the current year. A lot of manpower growth in the business is happening either front-facing sales teams in international markets, some of ops to support that. And a lot of investment is also happening in tech and product teams as well. So this is where most of our investment is going, but I don't have specific numbers handy with me.

We earlier talked about like around 400 to 500 people on non-India payrolls. That number still stays?

My guess is probably grown from there. Yes, because bulk of the new investment is happening in international source markets. So headcount is increasing much faster outside of India compared to what is growing in India.

Okay. Next question is on like you have INR 1,400 crore of cash and cash equivalents. So any thoughts on acquisition or utilization of cash on a next 6 months basis?

Prateek, we are constantly evaluating opportunities. Acquisition, inorganic growth is a stated objective. But like we have said in the past, we are very value conscious on new opportunities and how we evaluate them. So there is nothing to share at this point in time in the short term immediately. But rest assured, there is a pipeline that we are evaluating as we speak.

Conceptually, asking like in some kind of global travel slowdown, there will be more opportunities or there will be -- I mean, that would be the case, right? -- like more such small agents or companies might be wanting to sell their business at this point?

No, look, Prateek, I think entirely possible. And which is why we are patient, right? So we are not rushing into anything. We want to be sure that we do a good deal and we do the right deal. There are a lot of learnings as well from Jumbonline, which is just preparing us better for a subsequent acquisition when and if it comes. In terms of -- look, the only thing we have to keep in mind is that doing something very small may not be very incrementally valuable for the company, given that the management bandwidth that goes into evaluating diligencing and consuming -- integrating a business is quite large. So we will probably shy away from doing something very, very small. But having said that, we are actively evaluating opportunities of various sizes.

And last question, after like Middle East, Africa and Europe source markets, it should be like you see as like the third largest, fastest-growing market for you?

So third largest, I would say, in Latin America as it stands today. Fastest growing would be Asia Pacific, but on a smaller base.

So the next question is from Mr. Manik.

Basically, one was a request for data point. If you could -- while you provide the GTV split between India and international markets, it will be great if you can start breaking that up between Europe, Middle East, the way you did it as part of your IPO process because like last quarter when you spoke, you said there were some timing challenges in the Middle East market and thereby some of those were expected to resolve in the current quarter. So it will be great to essentially get that data split. The second question was -- the second point was with regards to some of our local aggregators have spoken about challenges in the European market. And while your commentary essentially seems to be slightly more optimistic, it will be great to get your perspective as to what do you think may be impacting some of the competition and what may be working to our advantage in that geo?

Okay. Manik, firstly, on your request for Data Hub, we'll definitely consider it and figure out in what form and manner we can share a bit more color on where the growth is coming from. Second, on Europe source market, Manik, I think -- so one, very hard to comment on competition. But you have to keep in mind, some of our competitors are significantly larger than us in Europe as a source market. Some are orders of magnitude larger than us. So they would get far more constrained for growth when the macroeconomic headwinds hit a region. Our business is coming from a small base and hence growing faster. Our belief remains that, one, we have invested a lot in building out solid local leadership in Europe. As you would see, we -- within Europe also divided by us into 3 different regions. We look at U.K., Ireland separately, we look at Eastern Europe and CIS countries separately, and we look at Southern and Western Europe separately and then Jumbo run separately as well. So there is significant investment in leadership and people on the ground bias in Europe as a source market. Having said that, look, I think it is -- it will be foolish to say that we'll be completely immune to any major geopolitical or macroeconomic headwinds that may happen. Our only comment remains that we are coming from a small base in a very large TAM. So hopefully, short to medium term, we should be able to find ways to grow in spite of some of these headwinds.

And do you think there might be some sort of risk to the take rates given the growth challenges that competition essentially is facing?

Manik, hard to comment at this point in time. As it stands today, our sense is that the take rates will more -- should more or less remain where they are, at least for this quarter. We're not trying to actively expand them. We do work very hard to protect them. So we want to make sure that we don't have to discount too much. So very hard to comment on it. But as it stands right now, we are maintaining take rates at least in the current quarter.

We have the next question from Ms. Sagarika Chetty.

I'm Sagarika from Anand Rathi. I actually have -- first question is on Jumbo. First of all, just require a clarification that in your presentation, 7.6% of revenue is solely the hotel revenue, right?

Jumbonline is all hotel revenue, yes. But 7.6% of the enterprise revenue is coming from Jumbonline, not 10.6% of hotel revenue, but 10.6% of enterprise revenue.

That too for quarter 2 FY '25.

Okay. Understood. And secondly, can you again just briefly touch on -- I know that someone in the -- someone asked about the Jumbo seasonality. If you can just repeat it because there was slight confusion. So what are the 2 quarters where it's stronger compared to the others? If you can just give some color on that.

Sure. So Jumbonline largely depends on European leisure traffic coming to the beach -- the Mediterranean beach destinations. Europe books much in advance. So you would start to see summer bookings happen -- already starting to happen in November, December, and we'll see heavy booking windows in January to March quarter as well because the way our revenue recognition works is on booking and not on actual date of check-in, so the jumbo business' seasonality from a revenue perspective will be a heavy Q4, our Q4, but a lighter Q2 because when those -- that is when the actual check-ins are happening. So from here on, we would see improved -- hopefully improving numbers in terms of revenue for Q3 and Q4, but then we'll see some slowdown happening in Q1 and Q2.

Okay. And next is in terms of acquisition, which geographies will you be -- or are you specifically targeting for? I mean, can you give some color on that as well?

See, we are fairly agnostic to geography because the business is global. We are present in pretty much every continent and pretty much every country. The bigger question for us always is what is the fitment. And we have this small playbook on acquisitions in terms of is the supply complementary or is the demand complementary? Do we have a belief that the business will integrate well into the TBO business and drive some new synergies? Do we believe that the business is easy to diligence and build confidence on the numbers that we are seeing? And then fifth is, are we getting good value for the business, and we will be able to meaningfully expand EBITDA post-acquisition, right? So those are the criteria that we look at, but we remain fairly agnostic to which part of the world the business operates in.

Okay. Understood. And finally, in terms of the monthly transacting buyers. So in India, is it safe to assume that this growth would be -- that the transacting buyers growth would come from international? And on India, we have already seen some level of saturation? Or is there some room to grow in India per se?

Sagarika, I think the headroom for growth in active buyers in India is still there. But one thing you must notice that the active base is very high. we grow 5% on a single digit. That's a significant addition to our active buyers, right? So -- but yes, obviously, India still remains a very buoyant market, and the whole outbound story is just starting to -- starting to roll out now, right? So we are very confident we will add buyers to -- continue to add buyers as we move forward.

Karan, you want to go next?

So I just wanted to check on corporate travel. So we are basically hearing news flows of corporate or business travel picking up in India as well as internationally. So just wanted to check what's the rough split between corporate and leisure travel for us? And are we seeing any uptick because of the corporate travel?

So Karan, largely our business relies on leisure travel because the whole thesis is on outbound leisure. Having said that, there is a fair portion of business that comes from corporate and which is because travel agents would typically -- any midsized or large travel agents is typically running a corporate travel desk separate from leisure. Corporate business is slightly more year-round and slightly more consistent, but possibly lower margin and lower GTV for travel agents. Leisure is much more profitable, but happens in spurts, right? So there's strong seasonality to it. So we do benefit from that. If you look at our data, so the proxy is looking at how many bookings are happening, where there's a single passenger as an example. And we would think of it as a proxy for -- there's probably a corporate traveler, especially if it's a small, short haul or a short stay booking. So with that, I would say there is a fair portion of business that comes from corporate, but bulk of our business is largely driven by leisure. We do believe that at least in the short term, this will continue to remain so. The value proposition of travel agents and value proposition of what we bring on the table, which is the differentiated hotel supply at a global scale is far more relevant for a leisure traveler, especially because a lot of premium luxury sells on leisure, which is where we specialize in.

Okay. But if I have to just assume a number, so would 80-20 be a fair split, 80% leisure and 20% travel? Not an exact number, but just a ballpark.

I would not comment on that, Karan, because it would be misleading and also I think from a perspective of our financials, I think there is no difference in margin profile or growth profile irrespective. I can definitely say that majority of the business is leisure, but whether it is 80-20 or 60-40, it's very, very hard to articulate that.

Okay. And the second question is, you mentioned that the momentum in the international markets will continue. So if I just look at the GTV growth rate, organically, I think it has grown by north of 50%. So if the take rates remain where they are, which you mentioned that take rates will not increase meaningfully, so 30% is a fair assumption in terms of the growth from here on?

So Karan, we don't comment on -- we don't provide any outlook. But our only hope is that we'll just be able to maintain momentum from where we are.

Okay. Okay. The next thing is on the Jumbo. So you mentioned that Q3 and Q4 are seasonally strong for Jumbo. But for TBO's organic business, Q3 is weakest. So how should we think about Q3 because there are multiple factors which are playing out? And this is the first time which you're going to report it publicly. So any comments there?

So Karan, I think Q3 is definitely historically the weakest in our business. We would definitely expect similar outcomes this quarter as well. Yes, Jumbo will probably have slightly stronger Q3 compared to Q2. But in the big scheme of things, Jumbo is still small, right? So it is meaningful, but it is not material enough to move the numbers. So our view would still remain that historically, Q3 is somewhat lower than Q2. I would not expect it to change this quarter as well -- this year as well.

[Operator Instructions] Prateek?

Just one follow-up question on acquisitions again. What kind of metrics would you use like in current environment for evaluating acquisition? It would be like EV to GTV or EV to EBITDA. I'm not sure like how profitability would be impacted for smaller companies in current market situation. But what is the general metrics which you would likely be pursuing for any M&A?

See, Prateek, this answer is, it changes case by case because our industry is quite niche, right? It's a small industry. There are no established benchmarks in B2B, especially at subscale businesses, which are not very large. Our thesis will always remain on what is our return on investment and what is our payback period, right? So -- and that is why we are quite conservative when it comes to assigning value to potential acquisitions. What we largely look for is that is it just additive? Or is it going to be significant synergy to increase meaningful value on both sides, the core business and the business that we're acquiring. On the whole, we want to be sure that we have a fairly reasonable payback just from the cash flows of the business rather than looking at EBITDA or revenue multiples.

Sir, we have a question from Ms. Vidhi Shah.

I am from Yes Securities. Just 2 questions, sir. First is on last quarter, you had mentioned you have closer to 35% of income from hotels coming in from direct sourcing. So I wanted to understand how we are in terms of the mix for direct sourcing and the third-party distribution that we have typically, where we are on that side?

Vidhi, the number is pretty much at the same level right now, about 1/3 or yes, 33%, 35% of our business is coming from direct sourcing. And we do not expect to change it very materially either way in the short to medium term. Like we've discussed in the past, look, as a platform business, third-party supply is equally important for us. In fact, one of our strengths vis-a-vis many of our industry peers is that we have a very strong playbook, both on tech and on operations on being effectively able to use third-party supply and service our travel agent partners. It definitely gives us the maximum depth and breadth compared to many of our industry peers. So how we look at it is that we want to maintain a healthy mix of direct business where it makes sense because there is an additional cost of acquiring direct business vis-a-vis a third-party business, though sometimes, not always, sometimes it is slightly more margin accretive or creates a competitive venture vis-a-vis competition. So we believe we are at a good steady state right now. This number may inch up or down depending on seasonality, depending on share mix of destinations. But we are not expecting any significant material movement on this number in the short term.

Sure. And what would be the typical sustainable levels for hotel take rate, like you mentioned, including Jumbo, the take rate for hotels is looking at 7.6%. So is it fair to assume that closer to 7.5%, 8% would be the sustainable levels on the hotel side?

Yes, go ahead, Vikas.

Yes. So as I mentioned as an answer to the other question as well, but we expect it depending on seasonality mix, et cetera, it should remain in the range of 7.2% to 7.6%.

Sorry, this is just Jumbo or this is including all?

This is overall.

Okay. Fair. And sorry, one more question, if I can just squeeze in. Last quarter, the active agent growth, if I'm not wrong, was over 20% on a Y-o-Y basis. So that for this quarter is 6%. So if you can just give some color on this.

I don't think, Vidhi, I think at an enterprise level, year-on-year growth was similar last year -- last quarter as well, yes, about 6% or 7%. The growth you're looking at is the growth in the international source markets, where, yes, it was close to 20%. And in fact, it's higher than 20% in this quarter.

Okay. So if I'm looking at the consolidated level, it's at 6% even in the last quarter.

Yes. So it is pretty consistent. It's slightly higher in the international.

Okay. And that momentum would continue in this quarter as well. As you mentioned, 20% was there in last quarter?

Yes. Vidhi, again, no firm guidance on this. And also to keep in mind, if there are a lot of holidays in the quarter, then this number is sometimes lower because there are just fewer working days. But rest assured, this is the North Star metric we are chasing. This is where all the investment is going. So we have a very strong eye on this number.

[Operator Instructions] Since there are no further questions, we would like to end the call. I would like to give it to Mr. Gaurav for his closing remarks.

Yes. Thank you, Aashvi, and thank you, everyone, for joining this call and for all the insightful questions. We've taken your feedback on some additional data points. We'll discuss internally and decide how we can give you more color on the business. Thank you.

Thank you.

Thank you.

Thank you so much, everyone. In case of any queries, please reach out to us. Thank you so much. We can now end the call.