TBO Tek Limited (TBOTEK) Earnings Call Transcript & Summary

Good evening, everyone. I'm Aashvi Shah from Adfactors Investor Relations. On behalf of the company, I would like to welcome you all to the TBO Tek Earnings Conference Call for Q4 and 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. Akshat Verma, Whole-Time Director and Chief Technology Officer; Mr. Vikas Jain, Chief Financial Officer; Mr. Anil Berera, President - Strategy; 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. 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 like to now hand over the call to Mr. Gaurav Bhatnagar for his opening remarks. Thank you, and over to you, sir.

Thank you, Aashvi. Good evening, everyone, and thanks for joining our earnings call. We have taken feedback from a lot of you over the last few months and structured today's presentation slightly differently. So we'll, of course, run through our results for the quarter and for the full year. And then we'll spend a little bit of time giving more color on what the growth levers are in the business. And given the very international nature of the business, give you more color on how various markets across the globe are performing for us. So I'll start with a quick reminder of what we do. We are a B2B travel distribution platform. We connect global travel buyers, travel buyers being travel agencies, independent travel advisers, tour operators, corporate travel agencies, loyalty companies, any -- basically, anybody who sells travel, we connect them to global travel supply. Supply being airlines, hotels, car rentals, transfers, crews; basically, anything related to travel that can be sold online. The business is very global. We operate in more than 150 countries. We transact in more than 55 currencies. The business operates in more than 16 languages across the globe. We are generally counted amongst the top 4 B2B travel distribution platforms. And as I'll show you in subsequent slides, one of the fastest-growing B2B travel distribution platforms at this point in time. So we'll start with the update for the quarter and for the full year. So it's been a very good year for us from a growth perspective. Our GTV has grown by 16%, and we hit a milestone this year. We crossed INR 30,000 crores of gross transaction value. Revenue has grown by 25% to INR 1,737 crores. GP has grown faster than revenue. And both revenue and GP are growing faster than GTV because the saliency of our hotels business, which you all know, is a higher-margin business, has increased quite dramatically this year. So our hotels business is growing much faster than the airline business. We ended the year with a 22% growth in adjusted EBITDA, ending the year at INR 329 crores. This is growth along with the fact that we have been significantly investing in market development, and we'll give you some color on that. But as a company, we are very happy to report that we've been able to drive profitable growth while investing into the future. Q4 numbers are somewhat similar. Revenue has grown by 21%. Gross profit has grown by 24% and EBITDA has grown by 15%. So we did our own scorecard. We looked at what went well and what we could have done better. So as -- if you look at our financial performance, we're quite happy with it. Revenue has grown on a year-on-year basis by 25%, and EBITDA has grown at a similar level. We have a very strong balance sheet. We have ended the year with roughly INR 1,450 crores of cash, which sets us up well for any future acquisitions. The Q4 numbers, especially for the international business were quite strong in spite of the seasonal impact of Ramadan. So some of you may remember that, in the last call, we had talked about that how Ramadan has moved from April to March. And hence, Q4 might get impacted. But very happy to report that all regions, including the Middle East, actually showed growth in Q4 compared to the same period last year. We expanded -- significantly expanded our footprint. We added 15 new markets this year, notable markets being Australia, France, Germany. Important to note, high-value, high transaction and luxury outbound markets. We accelerated our sales for hiring, especially in Q4. And again, we had talked about it in our last call that this is a key lever for growth for us. So we added nearly 60 more people on the ground globally in our sales. The hotels plus and when we are saying hotels plus, we mean everything non-air, so hotels and ancillaries, contribution grew from 50% last year to 59% in GTV terms. But if you look at gross profit perspective, almost 84%. So almost quite a very significant portion of our gross profit is now generated from the hotels business. Last quarter, we talked about some of the new AI-led initiatives that we were incubating and I'm happy to report they're going full steam now. The Jumbonline integration was successfully completed this year, 1 year ahead of plan. So the integration was supposed to be completed in October of 2025, which was completed in October of 2024. On the flip side, to be fully transparent, we also analyze what we could have done better. So on the performance on the Airline segment has been a struggle this year, and we have to look at ways in which we can monetize this business better in the coming year. We could have managed ForEx better. In the P&L, you will see we have taken a hit on ForEx, especially in Q3. And in retrospect, with the volatility that came after the U.S. elections, we could have foreseen it better, but we have learned some lessons over there. And the third bit is we could have even done even faster expansion in the international markets. We waited till Q4, partly because we wanted to have solid EBITDA growth in the first 3 quarters, but our conviction on the strategy was much earlier, but we waited a little bit later to act, but we are making up for it in Q1. Looking at our KPIs, as you all know, we look at active agents and active bookers. And just to remind everyone, bookers is the -- if there are multiple travel bookers in a travel agency, we count those as multiple bookers. So our active agents and active bookers are our North Star metrics. Definition of activity is, must have issued at least 1 transaction or 1 invoice in the year. So at an enterprise level, it grew by 7%, but you will see in the international business, where most of the hotel business resides, it grew by 18%. Active bookers grew faster than active agents at a pace of 10% in the quarter. GTV looks a bit flattish. But if you look at the international markets, the GTV actually grew 19%, and which also mirrors the growth in the hotels business because most of the international business is anchored around hotels. And revenue grew 21%. And once again, if you see the growth in the Hotel segment in the international business, revenue grew by a very healthy 32% compared to same quarter last year. The full year numbers are similar. Active agent base has grown by 9%. We're almost touching 49,000 active agencies across the globe. Active booker number has grown faster by 12%, hitting almost -- getting close to 70,000 active bookers worldwide. GTV grew by 16%. And within that, if you see the growth on the international business, the GTV grew by 43%. And Enterprise revenue grew by 25%. This was largely the -- revenue grew faster than GTV, largely because the hotels business has a disproportionate share of the overall volume now. So looking at the saliency, and this is a pattern and this is the strategy we've been talking about for the last 1 year. The strategy is to anchor heavily around growing our hotels business. Hotels and ancillary products like sightseeing, car renters, transfers see far more value in a global distribution platform like us. The fragmentation on hotels, both from a perspective of that there are millions of hotels vis-a-vis say a few hundred airlines worldwide. And there are thousands of different source markets like cities from which people travel to a hotel. So the fragmentation or demand and supply is so much that hotels and all the ancillary products find platforms like us far more valuable, and that is what we are anchoring around. And you can see from a gross profit perspective, 84% of our gross profit is now generated by the hotels business and only 13% is anchored around the airline business. I'll just take a pause here to reflect on growth and what does our hotels business. So the numbers here are hotels' GMV and hotels' growth only because the other two large competitors -- listed competitors, HBX Group and WebBeds are largely sellers of hotels. So you will see that we have been the fastest-growing platform by a fair distance this year in a very difficult year, right? So this is a year which has been marked by turbulence. There have been 2 global wars. There were elections in many countries, ForEx fluctuations happened wildly. So just to get -- set the stage on what does this growth, what does 35% growth mean in this business? If you anchor around how some of our peers are growing, we have been growing significantly faster, albeit on a smaller base, but not as orders of magnitude smaller base. Our footprint is also very global and secular, and this is important because there is no heavy concentration of business. You will see that 36% of our hotels' GMV, hotels plus GMV is now originating out of Europe. Just to remind everyone, when we report GMV numbers by geographies, these are source markets where demand is coming from, not destinations. So when we show 36% of the GMV is coming from Europe as a source market, and that's the largest market for us now. Very interestingly, while it is the largest market, it is also the fastest-growing market for us. Europe and U.S. are just incredibly large as demand market for travel. Their orders are -- many orders of magnitude bigger than, say, smaller markets like India and the Middle East. So we have a long runway of growth in spite of the fact that Europe is already our largest market. The Middle East and Africa is our second largest market for hotels with 25% of the contribution coming from there. This is a relatively small market, and we are very dominant in this market. But very happy to report that in spite of that, we have a 25% growth this year in the Middle East and Africa market. India is our third market in terms of hotels and it's grown 8% last year. And then APAC, Latin America and North America sit at a similar volumes between 8% and 10% of share. APAC has been growing fast on a small base, we saw 66% growth in APAC. Latin America saw 21% growth, keeping in mind that the currencies in Latin America saw a lot of fluctuation this year because of the various macroeconomic factors. U.S. remains -- while U.S. grew 29%, our expectations from U.S. are much more this year. So what we will do is, we'll spend a few minutes just giving a little bit more color on each of these markets because this is something we appreciate that our investors want to understand the business a little bit more given how globally diverse it is. So I'll start with the India business, and I'll mostly focus on the hotels business because that is the business that the enterprise is focused on. So the India business has seen a 16% growth over the last 2 years between FY '23 and FY '25. We have nearly 23,000 transacting agents. We are very -- quite deeply penetrated in terms of coverage in the market. So we have 69 cities with feet on street within India. The non-air saliency in India is quite contrary to the overall business, and this is the number you will see gradually change, right? So India is one market where only 16% of our business is non-air right now, which -- and by the way, this number has been improving every year. But this is the journey for us in the India business. And what we have also done is we have revamped our go-to-market for India. We have two big things that we've done is cross-sell because we have a massive base of travel agents buying flights from us. And they are also graduating as the overall market matures to outbound travel. A lot of travel agents also need to graduate from selling flights to selling hotels. So that is one key focus area for us to create cross-sell and upsell opportunities for our existing transacting agents. The other thing that we are doing is we have set up what we are calling a Platinum desk to make sure that our high-touch, high-quality agents are getting very high-quality service from us because these agents are serving luxury HNI markets and they need a different kind of handholding, and that's what we've set up for India. Middle East is our -- for the longest period of time, Middle East and Africa has been our largest market by GTV. This year, Europe surpassed Middle East. But irrespective, if you see the growth in the Middle East and Africa market, it's grown quite well at 23% CAGR over the last 2 years. We have more than 5,000 transacting agents in this market. Keep in mind, it's a fairly small market from an outbound travel perspective because small population and except for the GCC, rest of the market doesn't have a very large discretionary spend as of now. Within the GCC, within the Middle East market, there are 12 countries where we have own feet on street sales teams. 25% of our overall business at an enterprise level for hotels comes from the Middle East market. Within the market, we have a lot of spread of travel agents that work with us. So 40 different countries within Middle East and Africa, we have a presence in terms of travel agencies buying from us. Key growth markets this year would be Saudi, South Africa and North Africa and Northern Africa. So the region of Northern Africa is largely Egypt, Morocco, et cetera. Saudi is a special focus because it's both an important inbound market. As you know, we have a DMC business in Saudi, and we contract a fair bit of Mecca and Medina. We also work very closely with Saudi tourism to promote overall Saudi as a destination. So Saudi will be a key inbound and outbound market for us, followed by South Africa and Northern Africa. UAE remains a very large market for us. I think by far, we are the largest players in that market. In spite of a fair bit of saturation, we continue to see growth in this market. And largely, that's, for us, the indication is we are getting share of wallet from our competition in these markets. The key focus from a growth lever perspective is going to be setting up more regional payment method, especially when you go outside of the GCC, you need to enable local payment options as well, creating translations for some new languages and pushing ancillary sales, right? So this is one of those markets where even airline business for us is growing at a fast clip because travel agents have very deep engagement with us. So we are always looking at increasing our spectrum of services that we offer to these travel agencies. Europe, as you know, now, Europe is the largest market for us. The GTV growth has been very impressive, of course, with 1 acquisition that we did last year. We have nearly 4,000 transacting agents in Europe. We have 25 countries within Europe where we have actual feet on street on the ground. So you will see that we are starting to really penetrate the market as well. We have 49 different countries within Europe where we have travel agencies doing business with us. Europe contributes 36% of our overall hotels business. This year, focus markets are high-quality, high spending, high GDP, high per capita income markets like Spain, France, Italy, U.K. and Germany as outbound demand markets. We have set up a strong in-market feet on street over there. The other focus in Europe has been because Europe is extremely very multilingual. So we've been setting up localized support across major European languages, and we operate support out of Ireland, out of Spain, out of Greece, out of Israel, out of Poland to make sure that we provide truly local support in the language and culture of the traveler. Americas, we've combined North America and South America together over here. Americas have seen good growth, 32% growth over the last 2 years, but our belief is North America should grow faster given it's on a very small base. Combined, they contribute 18% of our hotels business. We have over 5,000 transacting agents in the Americas. So it's a substantial presence. A lot of that presence is concentrated in Brazil, which is a key market for us. Within the region, we have 8 countries where we have our own sales teams and 23 countries within the region actually where we have customer presence. Brazil, we have seen strong growth in Brazil. We continue to invest in that market. And Brazil is a very large country. So there are large pockets of the country where we have absolutely no presence right now, and there'll be focus on building that presence. I'm also very happy to share that we have a new leader, which that position was vacant for a while. We have a new sales leader joining as Country Manager for North America, for U.S. and Canada. She joined as of 15th of May. So very new to the market, but very hopeful that this will be a turning point for us for the rest of this year. And finally, APAC has seen incredible growth. This market had completely shut down during COVID, so business has really come down to zero. But it's an 89% growth CAGR over 2 years, 2,600 transacting agents, 9 countries with feet on street sales teams. We have a fairly large presence in Indonesia and not growing presence in Australia. Right now, the market contributes 8% to the overall business, in 18 countries within the region where we have our travel agents. This year, we have been focusing on scaling up the team across Australia, New Zealand, Hong Kong and Indonesia. These are all large markets, but we especially hopeful on Australia and New Zealand because while the population is small, the per capita spend on travel is extremely high and outbound travel is a big focus in these markets. So I'll spend a few minutes now just explaining how we are thinking of business and how we model the business internally, right? So how we think of growth and what growth levers do we really have. So now as a platform business and just like every platform business, there are 3 things that we can influence. One is the transacting buyer base, and this is really a North Star metric for the business at scale. We look at ways in which we can increase the number of buyers on the platform. The second thing we look at is platform frequency and which is no different from other platforms. You try and see, can I get the transacting buyer base to transact more often every year or every month or every day. And the third thing you look at is can I increase the transaction value. Some of it is seasonal in the business of travel, but some of it you have influence on. The thing with this business is these numbers multiply with each other because if the number of transacting buyers increase -- and which is why you will see our GTV grows much faster than our buyer base historically because of the stickiness of the platform and because of the fact that there are multiplier effects that happen in the platform as those buyers become more engaged on the platform. So the way we think of a business is that we need to grow. There are 3 distinct things that we need to do. We need to grow our buyer base to grow the number of travel agents on the platform. We need to grow the number of transactions they do on the platform. And then we need to increase the average transaction value on the platform. Let's look at some of the levers that we can focus on and the ones that are highlighted are the ones that we're actually working on. So on the transacting buyer base, as you are all aware, we know there's a very strong focus on market expansion, so opening new markets and extensive work happening across the world right now, but notably in Europe as well, followed by market penetration, markets like Middle East, where we've been around for a long time, but still deep -- opportunities to deeply penetrate the market. India is another example. We've been around in the market for a long time, but a huge runway to further penetrate in the market. And then the third bit is churn, right? Churn is painful for any platform business. So very strong focus on NPS and very strong focus on making sure that our transacting buyers, once they are on the platform are deeply engaged and do not churn out. On increasing the frequency of transactions, one is increasing the product portfolio, significant work happening on improving not just the depth of our hotels inventory, but also bringing more focus on ancillaries like transfers and sightseeing things to make sure that we have more and more products to sell and travel agents have more and more reasons to come back on the platform. And then we are looking at buyer engagement. This is largely driven through product marketing. So we've created a very interesting product marketing stack, which is proprietary and in-house, which allows us to do very targeted cross-sells and upsells and very strategic discounting or additional loyalty to keep the travel agents engaged on the platform. And finally, on improving transaction value, one thing that we have been focused on is focusing on building high-quality luxury inventory on the platform. Our thesis has been that because we work with travel agents, largely travelers who book via travel agents are looking at long-haul premium travel. So their average booking values are higher. So we are doing some initiatives to make sure that we have excellent inventory for luxury and premium hotels. So look, just to reiterate the message, why are we so confident that there's a large headroom for growth in this business, and this business will continue to grow at a high pace for several years to come. We are just getting started in some very large markets. Europe is a prime example of a market, which basically did not exist for us pre-COVID and is the largest market now and still growing at a very fast pace. Developed markets like North America, Australasia are going to be key markets where we have barely touched the -- not even scratched the surface. We have strong long-term buyer stickiness, right? Over 4, 5, 6, 7 years, you would see on cohorts, right, 35%, 37%, 40% of the buyers still remain on the platform. So we have a long runway during which once we acquire a travel agent, we have a long runway to monetize that travel agency. Again, increasing the frequency of transaction, the ancillary business has again just started. The focus is less than a year old on that business, and it's showing good growth. Interestingly, more than 1/3 of our transacting buyer base is acquired in just the last 2 years. So all of our international expansion is very recent. So there's a recency over there. Travel agencies have just started with us, right? 1/3 of our buyer base is just started working with us, which means we -- they will eventually warm up and data shows that they will eventually warm up to book things beyond hotels as well. And then on luxury travel, one, I think the overall sentiment of luxury travel is more positive than overall travel. So our belief is luxury travel will continue to grow just as a macroeconomic trend faster than overall travel. And then we are doing specific initiatives to improve our own quality of inventory there as well. So just a couple of things I'll touch upon before we move to the financials. So market expansion, right, in real terms, what does it mean for us? What did it mean last year and what means this year? So on the whole, we added about 60 new key account managers in Q4 of last year. We had talked about this that we will be accelerating our market expansion in Q4. We did that. We have a plan to add another 100-odd salespeople across the globe in the next quarter or 2. We opened 15 new countries last year. We are adding 20 new countries to the platform this year, and these are demand markets. And these are markets when we open the countries, we may already have some travel agencies working over there. But now we will have feet on street sales team on the ground driving volumes. And finally, North America leader has recently been onboarded. There will be a double-down focus on building North America and investing in North America to build it out as a key source market for us. Last quarter, we had just briefly touched about the Platinum program. And just to remind everyone, this is a new program where we're launching -- working with a set of key set of luxury hotels in key destinations, key pockets of luxury. Dubai would be an example, London or Paris, where we work with a few hotels, and we create a differentiated program with them where we offer them preferred marketing, preferred listing and preferred placement on the platform. In return, the hotels promise us unique and exclusive value-adds, value-adds being things like a guaranteed early check-in or a guaranteed room upgrade or a guaranteed late checkout or a meal voucher or a spa voucher. And the thesis here is that if we create a curated set of handpicked hotels, which fit well in the scheme of premium or luxury travel, travel agents are -- would promote that. So if you look at the performance and very early days, it's been just 3 months since this program has started. We added 77 hotels across different markets. Now if you see the benchmark that we are looking at is for these set of hotels, did their share of wallet within the city grew? So if I signed up a hotel in Dubai or if I signed up 3 hotels in Dubai, did the share of TBO's business to these hotels grow or not? And the results are quite impressive. In the first month, March was really first full month where this program was live, 22% improvement in the share of wallet of the platinum hotels happened. So if out of $100 of business, they were getting, say, $5 of business last year -- same period last year, they were getting 22% more. So more than $6 of business on the TBO platform this year. April was even better on almost 30% improvement in share of wallet. This is great news because this one, it does 2 things for us. It creates an additional line of income for us because these hotels are paying us separately for participating on this program. And secondly, it also establishes the ability of the platform to influence buying and purchase decisions, which is very important for any platform business to drive higher take rates in the future. So with that, I'll hand over to Vikas to present the -- okay. So I'll hand over to Ankush first to present the India update and then to Vikas for the financials.

Thank you, Gaurav, and good evening, everyone. I think some of the points Gaurav has already covered, but I would definitely like to talk about some exciting stuff what we are trying to do in India in the hotel space. So in FY '25, we continue to consolidate our Air business while growing the Hotels and Ancillary segment in the Indian market. Our total GTV stood at INR 14,151 crores in Hotel and Ancillaries continue to lead the growth, recording an 8% Y-o-Y, an increase to INR 2,213 crores. Our gross profit for the year reached INR 220 crores, driven by strong performance in the Hotel segment, which delivered a 13% year-on-year increase to INR 61 crores. Our strategic focus remains on enhancing our non-air saliency yielded results with segment GTV contribution now rising to 16% from 14% last year. We have revamped our go-to-market strategy to leverage the large base of selling air products. Gaurav did mention about our massive distribution what we have in touch points with our travel agents in the air business, and that is something we'll be leveraging to grow our hotel business as well. With a greater focus on upselling and cross-selling in ancillaries, we are confident of improving our share of wallet with our buyers. Our Platinum desk program, which is a very high task account management and inside sales for top customers is seeking good traction. We just launched this actually in Q4. Parallelly, we are strengthening our domestic supply by onboarding new hotels and obviously, the branded chains. Improving the booking experience for our agent is a key priority as a platform. And H-Next, our next gen booking agent for hotel ancillaries has been rolled out to 100% of our travel agents in India. It is a faster, more user-friendly platform and customized for Indian preferences and should help in boosting convergence on the platform. Cross-sell initiatives such as contextual placement on top-selling hotel inventories during air booking journey, increasing bundle of ancillaries and other strategies are also gaining good traction. On the operational front, the air post-booking journey is now fully digitized, resulting in a significant improvement in our CSAT. Our agent partners are valuable stakeholders in our system. In the financial year 2025 -- for the year '25, we recognized our top-performing agents across 42 cities pan-India, facilitating over 430 partners of ours. We firmly believe that our trust-based relationship with the travel agents will continue to be a strong pillar to support as the travel and tourism industry grows and evolves. On the macro front, India outbound passenger is expected to grow at a CAGR of 7% to 8% over the next 5 to 10 years. Tier 2 cities like Lucknow, Gujarat, Chandigarh, Bhopal, et cetera, have emerged as a new demand hub supported by the government smart city investments, regional airport connectivity under the UDAN scheme. Jewar Airport in Noida and Navi Mumbai should be starting very, very soon. Enthused by the strong demand, Indian carriers fleet is expected to rise to 2,000 aircraft by 2030 and now expanding their footprints to destinations such as Amsterdam, Manchester, Seychelles and Manila. Thus, we see a strong outlook for outbound travel in India. Consumer behaving is also evolving. Off-beat and experiential destinations are becoming popular, with customers showing great interest and attractions and immersive travel with Indian carriers constitutively adding new routes, rising aspirations for outbound travel and preferences for experiential complex itineraries are poised to drive continued momentum in our business. However, I would also like to share that we started decently well in April for the upcoming season. However, the unfortunate incident in Pahalgam, along with the tension between India and Pakistan, led to significant disruption in tourism, resulting in numerous cancellations of both domestic and international travel. This development impacted bookings for a few days during the peak summer holiday season. During this challenging period, we worked very, very closely with our travel partners, airlines and hotels going the extra mile to support our customers with cancellations and booking. Now following the cease fire, we are witnessing a normalization in our business and, hopefully, regaining momentum for the remaining of the summer season. Now I hand over back to Vikas to give the financial updates.

Thanks, Ankush. Good evening, and very warm welcome to everyone on this call. Thank you for joining us today. I am pleased to share our financial results for Q4 '25 and full FY 2025. For the quarter ended 31st March '25, at an enterprise level, we saw good growth in key performance metrics. Hotel GTV has grown by 17.4% and now contributes 84% of our gross profit. Gross profit for the air business grew by 24% year-on-year despite a degrowth in GTV due to better margin retention. Our revenue from operations grew by 20.9% year-on-year to reach INR 446.1 crores. Our enterprise take rate for the quarter improved significantly from 4.91% to 5.73% year-on-year on the back of the increasing hotel saliency. Adjusted EBITDA reached INR 79.1 crores, representing a 14.6% year-on-year growth, while profit after tax came in at INR 58.91 crores, showing a 27% growth year-on-year. For the quarter, our adjusted EBITDA margin stood at 17.73% and PAT margins at 13.2%. Turning to our performance for the full year. Our revenue from operations grew by 24.7% to reach INR 1,737.47 crores. We delivered adjusted EBITDA of INR 328.81 crores and a PAT of INR 229.89 crores. We maintained our adjusted EBITDA margin similar to the last year despite significant investment in the market development. Additionally, it is important to note that the income tax is applicable now on our wholly-owned subsidiary in UAE from the beginning of the current financial year, and our effective tax is currently at around 16.3%. Our balance sheet remains robust with a net worth of INR 1,195.1 crores as of 31st March 2025. Our cash and cash equivalent, including fixed deposits and liquid investments are also strong, standing at INR 1,455.5 crores as of 31st of March 2025. Thank you, everyone, and we'll now hand over the call back to Aashvi.

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

So Gaurav, just wanted to check on the international markets. So how are you seeing the demand from some of the key markets like Europe, North America, Latin America in the backdrop of U.S. tariff-related uncertainty, which has impacted the travel sentiment, especially in U.S. So any impact because of that? That's my first question.

Yes, Karan, I think in bits and pieces, we have seen in Q4, especially, we have seen in pockets a little bit subdued demand, mostly where currencies have been negatively impacted. I think that's been one big factor. Beyond that, given the scale of our business related to the size of these markets, these are hundreds of billions of dollars markets each like North America, Europe, our headroom for growth still remains irrespective of the macroeconomic situation. Of course, certain things deeply impact travel, for example, if some conflict happens. But beyond that, given our growth right now is more driven by market expansion and adding new markets, we feel we remain bullish that, yes, it's going to be a little bit of a tricky year, but we remain bullish on our growth projections.

Okay. Second question is on this TBO Platinum, the special service which we have launched recently. So I just want to check if the take rate in this is higher than the general take rate in the Hotels business. And if you can also mention how much is the GTV contribution from this Platinum in the hotel business?

So Karan, keeping in mind this program is 60 days old. GTV contribution is relatively small, but growing at a fast pace. As you can see, the share shift is quite dramatic, 20% of share -- wallet share increase for a hotel that is participating in Platinum is quite significant. But overall, in the big scheme of things, it is very small right now. Yes, this business will have incremental take rates. Very early to comment on what that would look like because really, I mean, it's 60 days in, very hard to start forecasting numbers on it. But we are very confident that this business will grow and will improve take rate.

Okay. Last question is on the India business. So you mentioned that you are doubling down on cross-selling the hotels to the Indian travel agents. So our understanding is that travel agents generally buy the hotels from -- directly with the DMCs. So what is TBO doing differently versus the past to sell the hotels to Indian agents?

I think, Karan, yes, I agree with you that they do buy from the DMCs, but that's not the case for every destination what they are buying. That's primarily for short haul and very small set of hotels they might have a relationship with. Plus, I think the plethora of products, what we bring, be it our ancillary services along with sightseeing excursions and cruise and plus the air product, which obviously has some barrier of entry, especially on international airlines. I think as a bundle of what we offer, I think we are definitely very well positioned to further cross-sell to our travel agents in India.

The next question is from Mr. Manik Taneja.

While I have a couple of data questions as well, but I first of all, want to understand you basically made significant investments in sales and marketing through Q4, and also talking about 100-odd people to be added in the first 6 months of FY '26. So how should we be thinking about your operating expenses growth below gross margins? That's question number one. And then -- and thereby related to that, should we be looking at some more dilution at the EBITDA level because of some of these upfront investments? That's question number one. The second question is you've talked about the intent to essentially accelerate the ancillary portfolio for customers. Do you think over a period of time, this has the potential to improve our take rates both at the revenue level as well as gross profit level? If you could give us some sense as to how the take rates may vary on the Ancillary segment?

Thank you, Manik. So Manik, you're right. There is significant investment happening. We remain committed to making sure that we preserve EBITDA margins. And this is the promise that we've made in the past as well that we want to demonstrate profitable growth. So barring anything unforeseen that comes up in the international business, we are -- the plan is to continue to grow at a similar pace as last year, though on a much bigger base and preserve EBITDA margins, right? That's a broad theme for the international business at this point in time. On the second question on ancillaries, Manik, see, there are 2 ways to look at ancillaries. And right now, ancillaries is a play on making sure that travel agent has more reasons to come on the platform, right? So -- and which is both activity on the platform and number of transactions on the platform. That's the way we are thinking of ancillaries. In the long run, and this would not be, say, next few quarters at all. But in the long run, the more fragmented a product is, the higher the take rate and higher gross margin, right? So ancillaries are meaningfully more fragmented compared to, say, hotels. So we do expect to do that business at scale at higher take rates and higher gross margins. But today, it is really more about making sure that we have created enough reasons for a travel agent to come on the platform, and we don't leave a reason for them to leave the platform, right? So which is why the comprehensiveness of the product is very important. So for example, we do Indian rail in India, just so that don't leave the platform. We do Europe rail for European markets as well, right? So those may be low-margin products, but they are important for the completeness of the platform.

Sure. Just to clarify on this margin outlook. So when you essentially guide for managing margins, do you think about them as EBITDA as a percentage of GTV or EBITDA as a percentage of revenues because -- purely because of the mix salience or our take rates continue to go up? And the second question is for Vikas, if you could call out as to what could be the drag that we saw in the current quarter because of the -- because of Ramadan falling during the quarter in the Middle East business?

So Manik, I am referring to revenue -- sorry, EBITDA as a percentage of revenue, right? So essentially, and we've talked about it in the past that idea is that the business generates operating leverage. Let's reinvest the operating leverage, but let's not dilute EBITDA margin, right? That's the way we're building out the hotels business.

On your question on the drag there on the basis because of the Ramadan, as Gaurav also explained in his presentation, that while we were expecting that there could be a big drag due to the Ramadan, but that was not there. We were able to -- even though the Ramadan fell in March, we had a good growth in the Middle East in this last quarter.

The next question is from Mr. Naveen Kaushik.

Sorry Naveen, we can't hear you.

We will move on to the next participant, Mr. Swapnil.

My first question is with respect to your employee costs. So if you see the cost on an absolute basis Q-on-Q between 3Q and 4Q, they seem to have been flattish, while we have also mentioned that there was roughly around 60-odd additions in our sales force during the quarter. So any particular reason these additions are not getting reflected in our cost increase on a quarter-on-quarter basis, particularly this quarter? I'll follow up with another follow-up to this question, but I will just stop here first.

Sorry which cost lines Swapnil you are talking about?

Employee expenses, which were around INR 100 crores last quarter. This quarter, they are INR 99 crores.

Swapnil, as we had explained earlier as well, so at times since these employees that we are having new employees or the new sales person that we are coming in, they may not be employee of a particular legal entity. So the cost doesn't fall under the employee expenses. The cost is captured as part of the other expense. We have a head called business support services. The cost get captured in that head and that head had soon increase. I can share offline the increase in that cost with you later.

Got it. And just to get a clarification as to how many sales employees we will have, so this 60 addition will be on what base?

So overall, the buyer or the sales person for the international business, excluding Jumbo have moved to now 314 from 250 last year.

Got it. And Vikas, just keeping on this line item. So there's one -- if I look at your balance sheet also, there's a delta in your assets under development by around INR 25 crores. So just wanted to get, are we capitalizing any of the cost related to the platform or something else? Some clarification on that side?

Yes, we have been capitalizing the cost that we are incurring on the tax side, especially where we see there would be future benefits occurring due to the same. And a part of that is getting capitalized under the intangibles.

Okay. And then there were some exceptional items also. The one, I think, is related to the currency, and there was another INR 9 crores of exceptional item. If you could just give some color on that.

Yes. So in the last quarter, the INR 9 crores of income that is showing under the exceptional items is primarily because of an old receivable, which we had from a Kuwait collection agent that had been written off in past earlier. So we did a recovery of INR 9 crores this year in the last quarter, and that has got recorded as an exceptional item in the P&L.

Got it. And on the currency side, any cost we could expect going ahead as well? Because last time you mentioned...

So on the currency side, basically as we had mentioned in the last call, we started hedging our exposures for the international market as well. And that's the reason there has been some increase in the cost in Q4, but it is obviously lower than Q3 cost where we had losses due to the foreign exchange fluctuations. But now we have started hedging. So hedging obviously would have some premium costs coming in, in the P&L, and that's what is accounted for in the current year -- current quarter cost.

Got it -- and just one question on growth as well. See, our GTV growth has now come down to 19% in the international side. Even the domestic growth has declined by 11% this quarter particularly. I mean, frankly speaking, where we started, right, 2 quarters back, even we were growing -- on an organic basis, we were growing 35-odd percent, which was phenomenal in international. Going ahead, how do you see the business doing, especially given the macro challenges also are there? Should we start building in a slightly lower growth rates in our models? Or I mean, just a color as to how do you see growth given the challenges?

No. Swapnil, on the international business, we remain consistent with what we've been saying in the past. We will continue to grow how we have grown on a full year basis in this year as well. That's the objective, though on a larger base, right? So on dollar terms, it will be faster growth. Also, Swapnil important to note that there is a lag. It's a retail business, right? You sign up these small travel agents and they start doing business with you over a period of time. So there is a lag in when your sales team onboards, when they start to become meaningfully productive and when the travel agents they onboard start to become meaningfully productive. So there is going to be some kind of a roll-on effect hopefully by Q4 or next year, Q1 from all the work that we're doing today. So they may -- it may not have immediate this year or this quarter impact, but it will add up, right? So we would not pull back on our growth targets or growth forecast at all. India has been challenging, especially on the airline side because the airline business is largely a 2-player market, very commoditized. So that brings some headwinds. We do expect to see some growth on hotels though.

Just to extend that point on India, your hotels business grew 16%. Now given the outbound travel rush, which is there very evident, right, to all of us, would it be fair to say that we may have done better than what we have done in the last couple of years probably? And going ahead, any particular change that you were driving that could lead to faster growth than 16% given that it is our home market. We understand this market far better than some of the international markets.

Fair question, Swapnil. I think in the presentation, what we were talking in the beginning, I think 37% of our buyers today who actually buy airline tickets are actually transacting non-air and hotels with us. So I think that's a lot of good headroom for us to further penetrate into these new agents. Plus I think the Platinum Desk and Gold desk, what we were kind of telling in the beginning, which is obviously a high touch point for our travel partners. I think the intention for us is to win more share of wallet from existing top customers, right? So I think as long we do these things correct, we should have some good growth or decent growth in India business this year.

Sorry, Mr. Swapnil, I request you to join back the queue if possible.

Sure. No worries, I will come back in the queue.

The next question is from Mr. Moez Chandani.

My first question was on your monthly transacting buyers. Now you've mentioned a few times that's the North Star metric. But when I look at your international number, that's been flat for about 3 quarters. So that's about 9,900 to 10,000. So what should we think about this going forward? Do you expect this to accelerate given our investments in sales team?

So look, Moez, the way we -- this number has two elements that we need to look at. One is that from a perspective of seasonality, these number varies quite widely because travel agents, especially like in the developed markets, the travel agents will start booking in 1 quarter, say for travel, that's going to happen 6 or 9 months in advance. And then they will kind of go silent for the next several months because they will get active again in the next season. The other bit is the natural seasonality that comes in because of like things like Ramadan. So if you see the full year basis, there is a significant growth that happens in this number. And that is the acquisition of travel agency that is happening. So while the number is flattish on a quarter-by-quarter basis, it's not the same set of travel agents who are active in Q1 and active in Q2 and active in Q3. And hence, this number is significantly different from a full year number. When I talked about how we look at growth, this is the second element of increasing the frequency of transactions from the travel agent. So when the seasonality changes, if the number remains flat, effectively, there is organic growth happening in the business. So that is the way I would read it. So it's not the same set of travel agents who are static from one to the second to the third quarter.

All right. Understood. Then secondly, on your expansion in North America. So you've talked about hiring a sales leader there. How should we think about this going forward? Do you expect to grow this organically? Or do you think that you would look at acquisitions the way you looked at it in Europe?

Moez, I think we'll continue to explore both the opportunities, right, organic and inorganic. And likely, that is the best combination to look at. And Europe is a good example of it. We did something inorganic. In fact, we did 2 inorganic acquisitions over there, but then we built out a very strong organic sales force as well. So that combination works best. Hard to say what happens in North America, but needless to say, irrespective of North America, across the globe, we'll continue to explore opportunities for acquisitions.

Understood. And just my last question on the India business, right? So that has seen GTV decline this year, but how do we look at it going forward? Do you think that your growth in hotels should compensate for the weakness that we continue to see in Air? Or do you think that there would still be a small decline in this segment going forward on a GTV perspective?

So Moez, on the air side, yes, there is a small degrowth. And for us, one, we focus -- we want to maintain our GP on the air business rather than growing on the GTV side. So as long we even see a little degrowth in this business, but continue with our GP, I think that's the intent. And obviously, play on the amazing massive distribution we have, which we have built because of the air business, right, obviously, to start selling a hotel in our non-air segment there.

The next question is from Mr. Mohit Motwani.

Am I audible?

Yes, yes.

My first question is on the growth in the international business. You spoke that you remain confident on the growth in FY '26. Now in terms of Europe, as you spoke about being one of the key source markets for you wherein France, Germany, Italy are some of the key source markets. Some of the major hotel chains and airlines in U.S. have downgraded their guidance in terms of the full year calendar year '25 given tough macro situations. Can you give us some sense where are you expecting this growth to come from? Is it more concentrated into geographies? Or is it the fact that you are expanding into more geographies that will contribute to growth? So if you can give us some sense on which geographies will contribute to the international growth in the hotels?

No, fair, Mohit, I think we have to -- sometimes we are taking a contrary view to the broader macroeconomic commentary or to what some of the larger players are saying, and this is only because we are coming from a very small base in very large markets. A lot of growth that is happening today is demand aggregation. So we are not really riding the overall demand shift in the market, but we're looking at aggregating a lot of underserved or fragmented demand across thousands and thousands of small travel agents. So that's the immediate trigger for growth. So the combination of the fact that we open new markets, where we start from 0, so the growth is very high. Often triple-digit growth will happen in the country once you start setting up a presence over there. And second is, even countries where we've been around for a long time and like Brazil is an example or UAE is an example, you will still see that healthy double-digit growth is happening, right, north of say, 20% growth happening in countries in the GCC, where we've been around for a long time. So our conviction remains that because we are aggregating fragmented demand, as long as the fragmentation is visible, we will continue to grow, right? It is only in certain markets where the significant -- when your market share starts to become meaningful, do you start to anchor around the macroeconomic situation in the market. For now, we are small enough for us to be able to continue to grow by just aggregating what's previously not been aggregated by others.

Sure. That's helpful. My other question is if you can speak a little bit about the competitive intensity, which is pricing up in the B2B space. One of the leading B2C OTAs is scaling up the B2B as well. So are there any pricing pressures that you are foreseeing in the coming year? I understand that you had already mentioned in the previous calls that you are looking for absolute EBITDA growth and not expanding margins as you are investing back in the business, but any pricing pressures that you foresee in the coming year?

Yes. So Mohit, what you just said, yes, definitely, there is a pressure on the air business in the B2B space. But I think our thesis still remain on our outbound hotel premium business, which I think we are doing fairly well. But I think, yes, on the air business, definitely, we are seeing some pressure there as well.

Sure. And if you can just give a data point on how much would be the churn in the agent base in the international side?

Mohit, churn is a very difficult metric to report in our business because see it's not a subscription business that some -- when a customer churns, we get to know that day because they did not renew their subscription, right? So it's a transactional business. And travel agents, like I explained, have massive seasonality. So there is a long, long tail of travel agents who will come in every few weeks or every few months, and there is no regularity to it. So we don't know at what point they have actually churned out. The metric that we have been looking at is NPS to see what is the customer satisfaction on the platform, right? So that's one. And that number is very high. I think we've not reported it previously. So I'll hazard stating a specific number, but we will bring it up eventually. The second bit is we do look at churn amongst what we call our, say, large and managed partners. So how much churn is happening in the top 500 travel partner -- travel agents that we work with. And there, the churn is very, very -- I mean low single-digit churn.

The next question is from Mr. Prateek Kumar.

My first question is on M&A opportunities. So market seemingly is weak as you suggest. So does this result into acceleration of M&A opportunities, which you might be analyzing because obviously, you have a very good balance sheet? Or is this the status quo in terms of your...

Yes. Prateek, we continue to explore. And am I audible to you, Prateek?

Yes, you are.

So Prateek, look, we continue to explore M&A opportunities globally. The thing with good assets is that they are somewhat immune to market reality. So we are not very opportunistic in saying that can we find something cheap because there is some headwind in the market. So -- and we are very cautious on what we want to do. So I can only say at this point that absolutely open to looking at opportunities, but nothing material or concrete to report at this point in time.

Sure. Okay. Second question is on employees, total number of employees as of FY '25 and what was the international employees in this overall mix?

So as of 31st March '25, we have total 2,357 employees plus the consultants or retainers because in most of the international markets, we don't have legal entities. They are working more as a retainer or a consultant. So total employees as of 31st of March is 2,357 out of which employees based outside of India is at around 772.

And this 2,357 has increased from what number FY '24?

FY '24, it was at around 2,080.

Okay. And most of this increase would be international related...

Yes. Yes, it is primarily in the international market. And even in the India market with the increase is there, it's more primarily to the platform-related businesses or the teams that are supporting the international markets.

Okay. On your expansion strategy in various large and new and upcoming markets. So have you seen any challenges related to cost, which has surprised you negatively and as a result, has weighed on the margins? Or how -- have you seen like sort of particularly new markets I'm talking about?

Prateek, I think in certain markets, especially in developed markets, the gestation period is a little bit longer to achieve positive ROI. It's not substantially longer, but significantly longer than some other markets just because people cost is high and also propensity to try something new is slightly lesser. So as you go into more and more mature markets where people are -- the businesses have been around for a long time, they have established relationships. It does take a little bit extra time to truly demonstrate your value proposition. But at the same time, the cost of personnel or cost of contractors or sales associates is high in those markets. So it's -- and nothing negative or nothing surprising, nothing, which has made us pull back from any market at all. But yes, that is the reality. The flip side is that these markets, once they start playing because the average transaction value in developed markets is much more than, say, in a market like India and somewhat less price sensitive. Once you find your product market fit, the growth is quite steep as we are seeing in Europe right now.

And related question is, do you -- are you able to forecast or maybe I don't know, guide when is the inflection point on margins and this operating leverage, which we discussed about will probably can play? Is it like '26, '27 or maybe I don't know, further out in the years?

See, Prateek, look, it's a very fair question. We -- if we kind of pause where we are planning to in this year in terms of what we're investing in market expansion, see, 3 to 4 quarters out, we should absolutely be seeing operating leverage, right? There is -- the math absolutely works in that direction. So if we do finish most of our investments in Q1 and Q2, at least hints and traces of operating leverage should start to show up in Q4.

Sure. My last question. Your international business grew by 43% in FY '25, what is the like-for-like growth? I mean, this is a data question, like-for-like growth for -- I mean, for this?

So if you're talking about the organic growth without Jumbo?

Yes, organic growth without Jumbo. I was asking that... yes, sorry.

That was 30%.

So 30% international business grew ex of Jumbo FY '25 or '24, and that is the kind of expectation going forward as well on an organic basis?

Prateek, yes, expectation is in a similar ballpark. Keep in mind, it's a larger base.

Yes. I mean, but this first quarter of FY '25, '26 will have some rub-off of the timing shift of Easter and I don't know, Ramadan?

Yes. So Prateek, I think what has happened is Ramadan did not have as bad an effect as we thought it might have on numbers Q4, so that was a positive surprise. However, Easter did also played an impact. So yes, but this is the early start of the summer. So as you know, most of European Northern Hemisphere summer is actually July and August. So we'll start to see booking surge happen across Q1, and we should see healthy growth.

That was the last question for the day. I would like to now hand it over to Mr. Gaurav for his closing remarks.

Thank you, Aashvi, and thank you for all the insightful questions. I do believe there was a little bit more questions, but we're really out of time right now. But happy to engage with investors and analysts over the course of the next couple of weeks as well. Thank you so much.

Thank you, everyone.

Thank you, everyone.

Thank you, everyone. You can now disconnect your lines.