Yatra Online Limited (YATRA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Yatra Online Q4 FY '24 Earnings Conference Call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Dhvani Shah from Investec Capital Services. Thank you, and over to you, ma'am.

Good morning, everyone. Thank you for joining the Yatra Q4 FY '24 earnings conference call. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is to purely educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. First, we have Mr. Dhruv Shringi, Whole-Time Director and Chief Executive Officer; Mr. Rohan Mittal, Group CFO; and Mr. Manish Hemrajani, Vice President of Corporate Development and Investor Relations. Without any further delay, I request Mr. Dhruv to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Dhvani, and good morning, everyone, and thank you for joining us for our fourth quarter and fiscal year 2024 earnings call. We are pleased to report a solid 2024 fiscal year with an annual reported revenue of INR 4.2 billion, up 10% year-over-year, with air passenger volumes up 24%, nearly double the industry growth rate of 12%. For FY '24, we largely met or exceeded our analyst expectations. On a quarterly basis, gross bookings expanded 12% year-over-year in the fourth quarter of FY '24 driven by a 13.5% growth in air gross bookings. This growth was fueled by a robust rebound in international travel. Additionally, our EBITDA margin expanded to INR 108.3 million from INR 44.5 million in the previous quarter, a margin improvement of approximately 7% sequentially, reaching 13% adjusted EBITDA margin in the current quarter due to optimization of customer inducement costs in the B2C business and a strong recovery in the corporate business. Overall, from a domestic air passenger volume perspective, the quarter was soft due to supply side constraints with the largest airline in the country having taken out capacity for engine repair related issues. We expect supply side constraints to start improving in the second half of the year. In fact, the indications we have is that, starting August, we'll start seeing some easing of supply side constraints. And by the same quarter of next year, we expect almost 100 to 150 incremental aircrafts being in operation. For the quarter ended 31 March 2024, we reported revenue of INR 1.07 billion, down 10% year-over-year, and adjusted revenue of INR 1.8 billion, down 6% year-over-year. This decline was largely due to the impact of a catch-up income in the same quarter of last year while coming out of COVID, and that catch-up income was of approximately INR 190 million. Excluding that benefit and comparing on a like-for-like basis, revenue was up 7% year-over-year and adjusted revenue grew 4% year-over-year. Our strategy is to balance our consumer and corporate business while focusing efforts more on the profitable corporate business. This has resulted in a favorable business mix for us. During the fiscal year of 2024, we signed 83 new corporate customers, which translates into an annual billing potential of INR 5.4 billion. In the March quarter alone, we signed 25 new corporate customers. And as mentioned in the prior quarter, during the year, we landed numerous deals with large and industry-leading companies like Aramco. And during this reporting quarter as well, just to give you a few examples, we won 2 large MNC customers, signed up a large private sector bank, a large pharma company and one of India's largest manufacturing conglomerates. Our consistent wins and high customer retention provides concrete evidence of our team's relentless pursuit to expand our corporate share and provide service excellence. Furthermore, to expand the time that we are addressing, we have also looked at building out new products and services. One of the products and services that we are expanding and we launched recently is an expense management solution. This solution stands out for its utilization of cutting-edge technologies, including Gen AI, large language models for receipt analysis. And unlike traditional OCR technology, this ensures much more accurate and comprehensive expense tracking, significantly reducing errors and saving time for our customers. Additionally, it features an integrated chatbot based on Gen AI and RAG models. This solution not only meets market demand but also anticipates future needs. Our expense management solution is designed to grow with our clients, offering scalability and flexibility as their businesses evolve. We now have the opportunity to cross-sell this solution to our already large and well-established corporate and SME customer base. And I'll discuss this in greater detail later in my remarks as well. Now let me provide you with some more details on our fourth quarter. Travel volumes in the IT sector continued to remain soft in the fourth quarter. However, we are pleased to announce that volumes in the corporate segment overall are now back to pre-COVID levels, and with IT softness being offset by our customer wins earlier in the year, starting to come online and picking up volume from other sectors. We are increasingly optimistic about our ability to grow our corporate business through new customer wins and the potential of cross-selling new products such as expense management in the future. Incidentally, in the current quarter, in the June quarter, we've already begun to see recovery in most of our IT services customers as well. I would also like to take the time to highlight some of our recent strategic initiatives to expand our market and growth potential. In the recent months, we have, from an engineering and technology standpoint, launched a new and improved user interface on our domestic price search platform. This enhancement is designed to provide a more seamless and intuitive booking experience for our customers, driving greater engagement. One of the key features of this new UI is the focus on upselling ancillary products and multiple fare types to our customers, adding them -- giving them incremental convenience and driving further revenue for us. These products include premium fees, travel insurance, additional baggage allowance, the ability to offset carbon footprint. And by integrating these offerings more prominently in the booking process, we aim to not only enhance the overall travel experience but also increase our revenue streams. The revamped UI is not just about adding new features. It also includes significant improvement in functionality and design. The layout, faster loading times and enhanced search capabilities made the booking process smoother and more efficient for customers. We have also incorporated personalized recommendations based on customer preferences and booking history, further enhancing the user experience. Additionally, on the corporate side, we have launched a new guest house booking platform for corporate customers. This new service is designed to provide companies with convenient and comfortable accommodation options. And also for large corporate customers who already have a number of guest houses within their portfolio, it allows them to optimize their lodging cost. To further touch upon the capabilities of the expense management solution that I touched upon earlier, this multilevel approval -- this solution has multiple benefits, including multi-level approval processes, which are tailored to meet specific company requirements. It seamlessly integrates with the ERP system that has advanced analytics powered by our Power BI dashboard. It also provides deep insights for comprehensive expense analysis. It's supported by a mobile application on both the Android and the iOS platform. It has expense auditing, integration with Google APIs for mileage tracking, and split expense capabilities. Expense management is a large and highly profitable segment and our product capabilities make it a product that is suitable not just for the Indian market, but for international markets as well. Our initial response from customers has been very encouraging. And this solution allows us to further deepen our relationship with our customers and it also provides us with an opportunity to differentiate our offering from our competitors by effectively offering abundant pricing to our customers. In terms of team expansion, we recently brought onboard a senior executive who until recently was the CEO of one of the largest corporate travel companies in the country, as our Chief Business Officer for New Business Development. He will be responsible for building and further enhancing Yatra's mid-market and SME, corporate travel proposition and developing new solutions for our visa facilitation and car rentals for business travelers, thereby delivering further financial growth for the company. He brings with him a wealth of experience and capabilities that will be fundamental to helping us accelerate our presence in the mid-market travel management space. In addition, we've also built out a team that is focused on the highly profitable MICE segment and the initial traction of this is very encouraging. While these additions have led to an increase in salary costs in the quarter under discussion, we expect the benefit from these expansions to start accruing in the very near-term itself. Now turning to the broader economic landscape. As per the Reserve Bank of India, despite subdued global economic activity and multiple headwinds, the Indian economy expanded impressively with real GDP growth accelerating to 7.6% in fiscal year '24 from 7% in the previous year, the third successive year of 7% or above growth. The RBI further highlighted in its recent report that the easing of supply chain pressure, broad-based softening in core inflation and early indications of an above-normal monsoon augur well for the inflation outlook in 2024, '25. The domestic economy is poised for high growth. And on the back of this higher growth and incremental disposable income, we continue to expect strong growth in the travel ecosystem as a whole. While there have been short-term pressures on account of supply side constraints in domestic aviation, we expect these pressures to ease off in the second half of the current fiscal year. In the March 2024 quarter, there was a total of 39.2 million passengers traveling domestically in India. This is close to an all-time high, demonstrating the strong and still growing Indian aviation sector. As mentioned previously, the religious travel is a huge and growing sector in India with tens of millions of tourists visiting popular religious sites. And the improvement in infrastructure is enabling this to grow further with the Ministry of Tourism quoting a compounded annual growth rate of 16% from 2023 to 2030 for religious travel. In addition to seeing growth in domestic travel, India is also one of the fastest-growing countries in terms of outbound travel. In 2022, India surpassed China, South Korea and Japan as the largest source market for outbound travelers in Asia, and it's still growing rapidly. In a recently published report in the ITB Berlin in 2024 in March, this indicates an impressive year-over-year rise of 190% for Indian outbound travelers in 2022, a sharp recovery post-COVID. With this backdrop of a strong economic landscape, we are witnessing the transformation of our country amid a bounce-back in both corporate and leisure travel, while discretionary spending remains on the rise. We are confident in our market and financial position and remain very optimistic about the strong year ahead. We continue to expect to benefit from the accelerating growth in our corporate and consumer business as we work to repeatedly win new corporate customers and build up further value for our brand. We have seen improving supply and margins and continue to expect further improvement in the quarters ahead, meaningfully contributing to our operating performance going forward. With that, let me hand it over to Rohan to walk you through the details of the financial performance. Rohan?

Thank you, Dhruv. Good morning to everybody. I will now review our numbers for the quarter ended 31 March 2024, followed by the full year fiscal '24 results. We delivered a strong quarter with a 12% Y-o-Y growth in our gross bookings to INR 19.9 billion. Accounting for onetime cost of listing expenses in Q2, we've delivered a second consecutive year of PAT positive. Our air gross bookings grew by 13.5% on a Y-o-Y basis for the quarter ended March 31, while our H&P, Hotel and Packages, gross bookings grew by 5% on a Y-o-Y level. Our overall adjusted margin for the quarter was at INR 1.57 billion. Our adjusted margin percentage has remained range-bound this year with air ticketing at 7.3% in quarter 4 and hotel and package margins at 13.1%. Moving on to the expenses. Marketing sales promotion expenses, including consumer promotion, loyalty program as a percentage of the total gross booking for the quarter, came in at 4.85%, which is lower by about 100 bps versus previous year, same quarter. Our personnel expenses, excluding the share-based payment expenses, increased by 20% on a Y-o-Y basis. This is on account of a onetime investment in talent, which Dhruv explained, to build out certain additional business lines for Yatra. Other costs have remained largely range-bound compared to year-ago quarter. On an overall basis, the adjusted EBITDA stands at INR 155 million as compared to INR 239 million in the quarter ended March '23 and versus quarter 3 '24, INR 100 million. For the full year ended March 31, 2024, we've reported a revenue of INR 4.2 billion. This shows an 11% growth in FY '24 versus FY '23. On a full year basis, our gross booking values increased by about 13% to INR 76 billion in FY '24. Our overall adjusted margin for the full year was INR 5.9 billion, which is up by 5% compared to FY '23. For the full year, our adjusted margin percentages for air and hoteling business have again remained range-bound at 7% and 13%, respectively. Coming down to profitability, our adjusted EBITDA for the entire year has come in at INR 534 million. Lastly, as of 31 March 2024, we were carrying cash and cash equivalents equivalent to INR 4.1 billion. Our gross debt as of 31 March 2024 was INR 638 million compared to INR 1.53 billion as of 31 March 2023. It's down by 890 million on a Y-o-Y basis. With this, we conclude our prepared remarks. I'd like to hand it over to the moderator for the Q&A. Thank you.

[Operator Instructions] First question is from the line of Nitin Padmanabhan from Investec Capital Services.

If you could give us a sense of both consumer and corporate performance for the year, and how has it sort of evolved from a growth and margin perspective? If you could also sort of contextualize considering that corporate has been on a recovery path, how it is? And also would be great if, considering the end of the year, if you could give us a comparison on the mix versus year-on-year basis?

Nitin, thank you for your question. So in terms of the overall business, firstly, we've seen strong recovery happening both in terms of corporate and consumer. And if you were to strip out the onetime effect last year, then, effectively, we are seeing both businesses growing in the late double digits. Corporate, in terms of profitability, has grown almost 65%, 70%. And on B2C as well, we are seeing significant improvement in growth. What we've seen overall from a year point of view is that, in the second half of the year, we've started seeing on the corporate travel front gradual recovery and the new wins that we've had begin to kick in. So the exit is obviously much better than where we were in the earlier quarters. And this trend carries forward into the current quarter as well. On the B2C side, I think the B2C side, while we've been focused more on driving operational profitability, there is some volume challenge on the B2C side, especially given the supply side constraints. So on B2C, we are focused on improving margins and farming the existing customer base given that volume growth is going to be tempered because of supply side constraints. This supply side constraints has also led to an increase in air ticket pricing, and we see pricing being relatively on the higher side in the current quarter. So I would expect in the current fiscal year as well growth to be led by corporate from a profit growth point of view, and B2C will be more of an enabler from a profitability perspective. But the larger growth will come from the corporate business. In terms of your last point on the mix, our mix today from a pure revenue standpoint, it will be almost about 45% coming in from corporate and 55% coming in from B2C, from a revenue standpoint.

The next question is from the line of Anmol Garg from DAM Capital.

Firstly, I wanted to understand from you the guidance for next year. So you indicated last time that we are going to see around INR 20 crores of profitability from 1Q onwards. Is that still stand?

Anmol, we continue to work towards that, Anmol. We've seen good recovery happening in our business. While there is a slight impact on account of the slowdown in the capacity, right. Capacity constraints continue to be a bit of a challenge on the B2C side, we are seeing good recovery happening on the corporate side as well. And some of the benefits of the newer teams that we've put in place, those are also beginning to kick in and we should see some impact of that in the current quarter and also in the July, August, September quarter. So from our perspective, we continue to work towards that. We are maybe looking at numbers in that range only. We might be slightly off on that, but we are trying to see how we can accelerate. There are certain levers that we are trying to work on, to see that we get to the INR 20 crore number from an adjusted side point of view.

Sure. That's helpful, Dhruv. Secondly, wanted to understand on our receivable front. So our receivable days have increased very strongly for the fourth quarter. Now I understand that our corporate businesses is recovering. Just -- but wanted to have outlook from you that as IT recovers again in June quarter, can we assume further increase in receivable days from here on? Or do you think that this is the range that we will operate at?

See, we are now back to a more or less normalized receivable days. So we shouldn't see receivable days going up meaningfully from the current levels.

Sure. Secondly, wanted to understand what steps are we taking for growing our hotel business given that the volumes were a bit subdued as compared to the last year.

Yes. So this year, for example, one of our key agenda items out of the business is to grow our share of hotels, both on B2C and on the corporate side. And for that reason, we've put together, firstly, there is a team which has also come onboard to support growth of hotels. They focus largely on hotels for corporate travel. So that's one thing that we are looking at right now. And we are also actively pitching hotels to our current corporate customers. So we should see meaningful improvement in growth happening on hotels in the second half of this year as the teams that we've put in place start delivering the numbers that have been projected out for them. So hotels is going to be a key focus area for us. There is work which is being done in terms of enhancing our hotel platform as well in the background. So that's another big change which we are currently undertaking to modernize and enhance our hotel platform. And this is a platform which is used by thousands of hotels across the country to manage their rates and inventory. So hotels would be a key growth area for us, and you will start seeing meaningful improvement in this beginning to happen starting the July, August, September quarter.

Sure. And I have a last bookkeeping question for Rohan, if I can squeeze in. So Rohan, in our PPT, we have highlighted our finance cost as INR 66 million, while on the BSE release it is indicated as INR 42 million. So what is this difference related to? And also if there's an item highlighted as INR 49 million in the other income, which is apart from the finance cost, what is this related to?

So the difference in the finance cost that you're seeing is primarily the noncash accounting adjustments on ForEx. That's about 200 million -- or sorry, INR 20 million, my apologies. That's about INR 20 million. Sorry, Anmol, could you please repeat the second question again?

Yes. So there is an item in our presentation, which is INR 49 million, which is other income apart from the finance income. So what is that related to?

The other income other than finance income would typically be provisions that were carried in the prior years which are no longer required.

Okay. Would these provisions be related to any bankruptcy-related of airlines that we have seen in the past?

No. This is regular accounting wherein, in a certain period, we may take a certain provisional cost basis the fact pattern that is available to us at that point in time. And obviously, all this is governed by a prudent conservative accounting standards, which may get reversed in the subsequent quarter. So it's nothing else.

The next question is from the line of Swapnil Potdukhe from JM Financial Limited.

The first question is on the air ticketing revenue side. So there was a mention of GDS bonus being there in the last quarter -- last year same quarter, which was not available this year. Now I would like to understand like even the bonus is supposed to be a recurring activity. I mean, you do get a bonus end of the year from the GDS, from the airlines if you deliver a certain number of volumes.

Swapnil, let me just firstly address that it's not that the bonus wasn't available in the current year. In the prior year what had happened was, because there was COVID disruption in the middle, we couldn't accrue the bonus for the previous years because there was no trending of volume. But as the business recovered strongly last year, there was a catch-up of prior year bonus also. So it's not that the bonus has gone away from the contract, it's just that last year had a catch-up of multiple years of bonus being accrued. That's the only difference.

Okay. But going ahead, will there be such scenarios wherein we'll...

This will still continue to be there in the normal course of the business now, right? There won't be multiple years of catch-up being recorded in one particular year. That's the only difference. Now this is, again, back to normalized levels, and we'll continue to see this going forward as well. So it's not that, that part has disappeared from the contract. It's just the case of, in the previous year, there was 2, 3 years of catch-up which was recorded because the trending improved in the -- let's say, if you look at realistically 2021, 2022, there wasn't enough fact pattern from a trending point of view to accrue bonus in that contract. But in 2023, as volume recovered, the fact pattern changed and it was evident that we would end up meeting the terms of the contract. And that's why then the bonus got recognized. So it's only a multiyear catch-up which happened last year and nothing else. Otherwise, it continues in a normalized basis.

Okay. Got it. The second question is on your reported EBITDA and the EBITDA which you have shown in the PPT. Now there I see a meaningful difference between your BSE filings and PPT because other expenses in the PPT are showing INR 75 crores, versus if I were to add up the numbers from what you -- from the BSE filings, it comes to around INR 82 crores. So that's a INR 7 crore difference is there. And I'm unable to understand why that number should be there in the first -- or should be there.

So Rohan, can I request you to take that.

I'm referring to Slide #12.

Sorry, which file are you referring to? I mean, other expenses in our SEBI filings for the quarter is INR 25.47 cr.

No. If you see, if you add up the numbers marketing expenses, employee expense and everything, that number comes up to around INR 82 crores. Whereas your Slide #12 shows operating expenses as INR 75 crores, and there is a difference of INR 7 cr.

I'll have to just check this one and get back to you offline maybe. There is no error in the slide, that much I can confirm to you SEBI filings are obviously audited. There is no error in the slide. We'll just help you understand the difference in the numbers separately maybe. Is that okay?

I mean this has been the case for last 1 or 2 quarters also, where I mean there is always a slight difference between what you report on the PPT and what's there on the filings. So that is one thing that -- I mean if you can clarify going ahead as well, that would be helpful. Secondly...

Let's connect immediately at around 11:05 as soon as the call ends, yes? And we clarify this. Just to be very, very sure and very, very clear, if you look at the PPT numbers, the revenue from operations is the starting point and the PAT number is the endpoint. The numbers are exactly matching with the SEBI filings.

No, no.

But we'll help you understand the difference that you are seeing. That difference should be explainable. So we will connect at 11:05 one-on-one, and we'll help you understand that. And going forward, what we'll try and do is we'll discuss internally if there is any improvement to be done on our investor presentation. We take that feedback positively, we will take that into consideration going forward as well.

Definitely. And the second point is with respect to the other income portion that you show in the EBITDA again. Now this is something disproportionately improves your EBITDA, because INR 4.9 crores of EBITDA on a reported number of INR 10.8 crores is meaningful. And that's true for something which provisions you would have taken in the past. And these write-backs might happen in every -- in any quarter, right? There's nothing related to your daily -- day-to-day business activities. So I'm unable to just reconcile as to why should we be showing those numbers in our EBITDA numbers. And then that disproportionately shows a higher EBITDA than what the actual number would be.

There's a slight disconnect here. The provisions that get released are entirely related to our business expenses. In reality, they should have gone to revenue from operations because in the period in which that provision was taken, it was shown as an expense. It was not shown -- and therefore, the EBITDA was lower by that much amount, right? So when that provision is getting released in future basis fact pattern then it has to be included in our adjusted EBITDA. These are not -- non-business activity-related income. Our finance income is something which sits outside and therefore it is excluded from our conversation.

Okay, Rohan. I'll check with you offline.

Sure. These are not -- just to be clear, these are not noncash items or accounting entries. I want to be super-clear about that.

The next question is from the line of Manik Taneja from Axis Capital.

One part of my question was already got clarified. The second question was with regards to -- about those volume numbers that you share on the hotel business side. What I see is that the Q4 FY '23 volume number that is printed on the hotel night -- while the slide number given your full year numbers don't seem to catch up. So just wanted, first of all, to clarify if there is some restatement on that front. The second question was with regards to the take rates that we see in the business as well as the increase in the customer acquisition cost in the course of FY '24, if you could comment as to how do you see this playing out over the foreseeable future.

Sorry, we had a hard time hearing that. Could you repeat the second part of your question, please?

Yes. I expect this is better now?

Yes. Yes.

My question was -- the first question was with regards to the hotel volume night numbers. When I see the year-on-year comparison, those numbers seem to be different from what was reported last year, and thereby just trying to confirm if there is some restatement on that front. That's question #1. The second question was with regards to the increase in customer acquisition costs that we've seen happen through the course of FY '24, especially on the airline side, if you could give us some commentary on that front as well as how should we be thinking about our adjusted take rates from the airlines business for the foreseeable future.

Sure. So let me address the first part -- sorry, the second part, which is on the airline take rates, and Rohan can respond to the first part of the question. On the air take rate, there has been some competitive intensity, which has been there in the last 6 to 9 months now led by one of the players in the category. And on account of that, air inducement cost has remained slightly at elevated levels. What we have taken the view, especially in the last quarter and now more so in the current quarter and going forward, our view is that on the B2C side of things, we will focus more on profit enhancement rather than volume growth. Our volume growth will come more from the corporate side of the business. So on the B2C side, we will continue to look at optimizing our customer inducement cost going forward. We've already started doing that in the last quarter. We further accelerated that in the current quarter, and we'll continue to do so. Because I do feel that on the customer inducement costs, these short-term steps that are taken at times by competition might lead to volume increases in the near-term, but these are not permanent volume gains that happen. So I would rather focus on driving more cross-sell from our corporate customer base, focus on driving faster growth on our corporate side, where at least the customer wins that we make are sustainable in nature, rather than delve into incremental inducement cost on the consumer side. With regards to the take rates on the air front, air take rates have remained a bit muted right now because of supply side constraints. We do expect that as the supply side constraints improve in the second half of the year with more capacity being brought back both from Indigo and incremental supply that's being added by Air India and Akasa, we do expect air take rates to improve a little bit in the second half of the year.

Sure. So just to essentially [indiscernible] you on that response, so while I do understand that there is -- there will be some incremental supply that will come through in the course of FY '25 and because of which you are expecting that the take rates from the air business go up. But at a very fundamental level, given the way we've seen consolidation in the space and the top 2 players almost now accounting for 90% of the market, don't you see that as a risk, especially with regards to commission that we earn from the airlines business going forward?

So on the B2C side, there is hardly any commission that comes from the airline. So vast part of the commission earnings or the earnings on B2C comes from convenience fee that is paid by the customer. The same convenience fee or similar convenience fee is charged by all peers and by the airline direct websites as well. So I don't think that there is any further impact of this on the earnings on the air front. There will be some improvement because, typically, what will happen is as capacity gets increased, the airlines also need support in filling out the incremental capacity and for filling out the incremental capacity. You do then get higher take rates and payouts from the airlines. That's typically how the model will evolve. I do completely agree with you that their model in terms of raw commission payouts on domestic airline especially has changed quite meaningfully over the last decade, right? But the move has been a reduction on the supplier side payments and a higher payout on the customer side. So there is a platform fee -- so convenience fee, which gets levied to the customers. And customers are willing to pay for it, right? We've been seeing this now for the last 7, 8 years. Consumers are open to paying for the convenience of getting an aggregated platform where they can compare all their different flight options.

The next question is from the line of Pulavarthi Sai Kiran an individual investor.

Sir, just 1 question. Do you foresee in the next couple of years to be a market share gainer in the air ticketing space? And what are your thoughts about it? And what could drive, if any, in terms of market share gains? Of course, you've mentioned that once the supply increases, your ticketing revenue increases. However, assume that things stand as they are, do you see meaningful market share gainer in the segment as such?

So we continue to gain meaningful share on the corporate travel side. And our endeavor would be to accelerate that growth rate on the corporate travel side. So we will continue to see share gain happening on the corporate side. On the B2C side, I would expect us to maintain share, but I would not look at significant share gains on the B2C side. Our endeavor as the largest corporate travel player in the country is to continue to strengthen our proposition over there by adding more products and services, so have a much larger share of wallet of our corporate customer by cross-selling incremental products beyond just flights, to hotels, car rentals, visas, MICE for which we've expanded all these teams over the course of the last quarter. So our endeavor would be to definitely gain a lot more market share on the corporate travel side and maintain share on the consumer side.

Sir, if I can ask you as a follow-up, what can get you in terms of incremental market share in the B2C business, primarily because if you look at in the last 2, 3 years, post-COVID, we have seen a meaningful jump from the retail or consumer spends on the travel and tourism, which is reflected across the segment's hotels or travels and everything. I assume that you are not participating in that growth in the best of the times of the industry. Are you losing out the opportunity?

So it is growth at a particular cost, right?. So we think there are definitely other ways to participate in the growth in that opportunity. The employees of the corporate customers that we service, and there are, in addition to almost now touching 7.5 million employees who are employed by the corporate customers that we service, right, these are the premium customers of India, the guys with high purchasing power, access to Internet, digital forms of payment, this to me is the core consuming middle class of India, right? Each one of them supports a family of 4 on average. So we are looking at 30 million customers out here. So my focus would be in terms of farming this customer base out here. And I also feel the B2C market, it's not that the market is disappearing, right? So by not participating in price competition, if for a quarter or 2, when intensity is high, it does not mean that in the long run we will lose out on that, right? So I feel it's better to just continue to participate through more effective and efficient means of customer acquisition than to do this through large-scale discounting.

Understood. Sir, I assume that the pricing, keeping it aside, what are the other factors which can help any organization in the B2C business to gain the market share? And if you have to do an analysis of yourself, where do you lack and what are your strengths? If you can just elaborate on that.

Sure. So beyond pricing, there are 2 other key factors which are there. One is in terms of brand recall, right? So [ agency ] plays a very important role in this category from a top-of-mind perspective. And the Yatra brand continues to have one of the strongest brand recall, in fact, the second highest brand recall in this category, right? So brand recall for us continues to remain extremely high, and that's a very big positive for us, that drives a large amount of direct traffic to us, and that will continue to be there, right? So we will continue to strengthen the brand as we go forward. The other element which is there is the customer experience and the service that we deliver. And on the customer experience side, I touched upon this in our prepared remarks around how we are working in terms of enhancing the user flow, in terms of adding more products and services to become truly a single one-stop shop for our corporate and our business -- sorry, and our personal travelers. So to that extent, we continue to expand the product proposition that we have and make it easier for customers to book. There is another interesting factor that we've launched for premium leisure travelers, which is people who travel more frequently for leisure purposes as well. That's our Yatra Prime proposition. And if you become a member of that prime proposition, then you don't have to pay a service fee or a convenience fee on every subsequent transaction. And we are seeing very strong traction on that prime proposition as well. In addition, we continue to work with our partners, which are the leading banks in the countries to put together interesting propositions for their credit card and debit cardholders as well. So there are multiple factors on which we continue to work beyond just raw price discounting to drive customer growth and customer satisfaction.

[Operator Instructions] The next question is from the line of Jayesh Shah from OHM Portfolio Equi Research.

My question is actually on your parent company, Yatra. I believe that's a mirror reflection in terms of the business of Yatra India. So optically, it trades at a big discount to the Indian stock. What are the ways in which we can resolve this thing? I do believe you've been doing share buybacks at the parent level. But is there any long-term solution? Because as an investor, one could see that the parent company is actually trading at a discount, which we are unable to buy beyond the LRS limits from a family office account.

Right. Sure. So that's an interesting question, and maybe we can spend some time offline on that, right? Because we are much more focused out here on the India operating entity. But if you want to understand the dynamics, the trading dynamics of the holdco, we can set up a time to connect offline on that. But there is obviously a huge discount at which the holdco trades right now, largely on account of lack of liquidity in that market. Yes, but we can connect offline to discuss that.

Sure. I would get in touch with Rohan and fix up -- thank you.

The next question is from the line of Nilesh Doshi, from Prospero Tree Financial Services.

Sir, my question is that quarter 4 revenue is affected due to onetime accruals of the threshold bonus of GDS. Sir, I would like to understand whether any such negative surprise are bearing for the next year?

Not really. A lot of this, which is there in terms of onetime effects and all came in on account of COVID. All of that is now firmly behind us, right? So there is -- there shouldn't really be anything now going forward. I mean, historically, also there weren't any such instances. Obviously, our industry went through a big disruption in those 3-year period in the middle. So some of it was legacy of that, which was addressed in fiscal '23. If you see fiscal '24, right, so the current fiscal year that we are debating, there is no such effect from a onetime perspective in this kind of fiscal year, and I don't foresee anything going forward either, right?

So the next year will be the normal year. There will be no negative or positive surprise involved, or it is likely to be happen.

So as I said, now we are in a more normalized environment. And I don't see any kind of surprise coming in, in a normalized environment. Now, obviously, there is some large disruption that happens on account the force of nature. That's not something that we can foresee. But in an as-is kind of scenario, we don't anticipate any kind of surprises.

Sir, I'm an investor in the both listed OTA company. One is more focusing -- now more focusing on the profitability, one OTA there which is listed, the GBR of that company is INR 8,500 crores. And Yatra is at around INR 7,600 crores. But when I compare the EBITDA of both the company, one company which is now focusing on the profitability, their EBITDA is INR 228 crores, where our EBITDA is only INR 53 crores. So can -- is Yatra focusing only on the market share gain? Or will there be a focus on the profitability also or how the gain in the market share will convert it into profitability?

Sure. So our focus is on growing and rebuilding the corporate travel business, right? So in the corporate travel business where we are the market leaders, we will continue to expand our position and focus on driving profitability. So this year, the focus will be on continuing to improve profitability as we go forward.

Because in the first phone con call, I remember that I think INR 20 crore PPT or PAT was guided, though it was only the guidance. But can we match that number or near to that number, because of the current EBITDA, it does not sense that we can achieve that level?

So from an EBITDA point of view, if you look at the adjusted EBITDA, we feel that's a better measure of the business. The adjusted EBITDA in the current quarter is about INR 15.5 crores. And we think there is more growth opportunity and optimization of costs that we've done in the current quarter and continue to work towards. There are new teams that we've built out, new lines of business that we have invested behind, and we should start seeing the effect of these coming in, in the very near-term itself. So I'm optimistic that we should be able to get to that number in the near-term.

So the profit will grow by increasing the revenue or by decreasing the cost? Because our costs are -- since that it's a fixed cost model, a very high fixed cost model, so the net remains very low. So how we are thinking to grow?

So we are doing a combination of both. We continue to focus on improving both the business mix, right? That is mix of our business, which is having a positive impact on the overall profitability of the company. So it will happen through growth of revenue and optimization of cost.

But in the B2B business, the employee cost is not on a higher side, sir.

On the B2B business, given that there is more technology enhancement and development that we are doing, plus the fact that we have built -- and like we've just mentioned, right, there's a new product that we've built out in the case of expense management. Now if we were to go out and buy a company that was building this kind of solution, it would cost us tens of crores, right, whereas this has been built in-house. So there was a technology team that's focused on building out new products and solutions. Similarly, there are new lines of business that we've started like MICE. There is more a team that we've built out for mid-market. These are all growth opportunities behind which we are investing at the moment. So from that perspective, we will start seeing the benefits of this accrue in the relatively near-term. So in this fiscal year itself, you'll start seeing the benefits of these investments paying off, and that's how the profitability will improve.

The next question is from the line of Himanshu Dugar from [ Fees Turn ] Financial Advisors.

My question is around the service costs that are related to the H&P business. Is there some kind of seasonality or timing to that? And second question related to the, and to follow up on this -- to the service costs, are they directly related to the revenue bookings that is your take rate? Or should they be considered as a separate cost base?

So the service cost is directly related to the holidays business, and there will be seasonality. The 2 key holiday periods are the October to December period around Diwali, Dussehra and then, again, the summer holiday season, which we are currently in. So these are the periods in which service costs would be at more elevated levels, but it's directly related to the revenue itself. So there is no other pay in service cost, this is directly linked to the volume of packages which are sold.

Sir, would it be fair to adjust the service costs from your gross take rate that you report like 13%? If that is the case then, when I look at the last 4 years, the net take rate is basically just reducing from your gross take rate service cost, I find that the number is slightly flat, in fact, just slightly reduced in this year. Any comments on that?

So when you say net take rate, are you looking at the adjusted margins?

No, I mean the gross take rate that you reported in the PPT, adjusting that for the service cost, on a GBR basis.

Sorry, I'm not clear on what you're trying to point towards.

Around 13% is the gross take rate and the take rate that you report, right, on the H&P side?

Yes. On the H&P, yes. Okay.

Yes. And the service cost broadly work to 3% to 3.3%. If I look at the annual number. So that indicated that over the last [indiscernible] I'm talking about since FY '19 to till date FY '24, there seems to be a decline in the rate. I mean, are the service costs going up for you or the -- because the take rate seem to have slightly increased, so does it mean that the service cost is going up? And if that is the case, how should we look at it for FY '25?

Sure. Service cost is as a proportion of the holiday packages business, right? So as the holiday packages business recovers, service cost is growing in line with that. So that's a function of the holiday package business recovering after the 2, 3 years in the middle, the holiday packages were obviously at a much lower level.

So if holiday and packages business were to grow 15% in FY '25, would it mean that the service cost also will grow at the same ballpark, or would it be a slightly higher number?

No, it will grow in the same ballpark. So it will grow in proportion to that. So there are 2 things which are there. This is hotels and packages. So if the stand-alone hotel sales grow, then the service cost does not go up in line. If the packages business grows, the service cost grows in line with the packages business. So the a mix between stand-alone hotels and packages also impacts the ratio of service costs. But at the most fundamental level, service cost grows directly in proportion to the growth in packages business.

Got it. The other question from me was around your -- on the platform. Is this -- the airline business also being an important driver for the hotels and packages or the hotels and packages are in a separately booked versus the online ticket booking?

So typically, customers will book hotels and packages separately. We don't see too much bundling happening in India while this is a trend that does happen globally. In India, still the trend is for people to book these individually. The customer, obviously, you have the air passenger does help from a pool point of view, which can be cross-sold to. But vast majority of these are then booked individually by customers, not as part of the same booking process.

Got it. Just 1 last point on this aspect was, are you also offering do-it-yourself kinds of packages and build your own package kind of models also in your platform?

That's right. So we are offering customization to customers, whereby they can create their own packages beyond the standardized package. In fact, the vast majority of our sale is towards customized packages and not fixed departure packages.

But overall growth would also have a similar take rate. There's no add-on that we're able to generate out of it like additional revenue, if you generate out of it?

No, the take rates are similar at this point.

Thank you. Ladies and gentlemen, we'll take this as the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir.

Thank you so much. Thank you for hosting the call, and thank you, everyone, for joining us this afternoon or this morning rather. We are available offline as well for any follow-up questions that you might have, all 3 of us, Manish, Rohan and myself are available. We are looking forward to a strong year. We do understand that there is some short-term supply side constraints, which are causing a bit of pressure in terms of growth, but we think our corporate travel business is very well positioned and insulated from some of these supply side constraints, and we expect to see strong growth and profitability in that sector in the coming year as well. And as I said, we are always available for any follow-up questions that you might have. Thank you for being on the call today.

Thank you. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.