Yatra Online, Inc. Ordinary Shares 2027 Q1 Earnings Call

Dhruv, please go ahead. Thank you, Ellen, and good morning, everyone.

Thank you for joining us on this conference call to discuss our first quarter ended 2027 earnings. As you might have seen in social media and our marketing campaigns, we recently completed 20 years of taking Indians to work and helping Indians get off from work, an accomplishment we are very proud of. As we look back, I would like to reflect on a few of the key strengths that have shaped Yatra over the past two decades. First, the trust in our brand from over 1,000 corporate customers and millions of retail customers. Secondly, our technology capabilities. And thirdly, the resilience of our business model. Over this period, our brand has become synonymous with online travel in India.

This trust has won us numerous consumer accolades and continues to drive a high degree of repeat usage and direct traffic onto our platforms. Our corporate customer base also continues to rise consistently with retention rates in excess of 97%. For nearly 20 years, technology has been at the core of our business, enabling us to continuously evolve with the changing needs of travelers and enterprises. Over this period, we have built and defined a comprehensive travel technology ecosystem covering booking, travel management, expense management, automation, and analytics, which support more than 1,300 large and mid-sized enterprise customers across India. And now with our partnership with Kanoo Travel, we will be extending our reach into the Middle East as well.

We believe the capabilities we have built over the last two decades provide a strong foundation for the next phase of Yatra's AI-driven growth, as AI becomes an integral layer across our platform, making travel simpler for users, smarter for enterprises, and more efficient for our own operations. We believe that AI can fundamentally change the economics of managed travel. AI is automating routine workflows, surfacing saving opportunities in real time, improving policy compliance at the point of booking, and accelerating expense reconciliation. As a result, companies are able to handle higher transaction volume with fewer manual touchpoints, reduce cost leakages for their customers, and unlock better operating leverage as they scale. Our investments are firmly aligned with these trends. We are embedding AI into search, recommendations, and conversational interfaces so that travelers can find the right options faster and with less friction while staying within policy.

We are also using AI and machine learning to automate service interactions, flag out-of-policy spends, and provide travel and finance leaders with richer, more actionable insight into their programs. In practical terms, this translates into a better user experience, stronger compliance for our corporate clients, lower cost to serve, and a more scalable operating model for us. We believe AI will increasingly be a structural advantage in travel management for us, not just enhancing the customer journey, but also improving margins and returns for our businesses. As we deepen these capabilities across Yatra's platform, we see a clear opportunity to drive both sustainable top-line growth and continued improvement in our operating efficiency over time. Let me now turn to the broader travel ecosystem. The travel industry has gone through a period of disruption over the last few months.

International travel was particularly impacted with the West Asia conflict resulting in air connectivity and affecting MICE activities. At the same time, we are operating in a structurally expanding market. India's overall online travel market is expected to grow at a high single to low double-digit CAGR over the next several years, outpacing many global peers, supported by rising disposable income, rapid digital adoption, and improving air and rail connectivity across tier 2 and tier 3 cities. Domestic travel has remained resilient despite global challenges. Air passenger traffic in India grew around 2.3% year-over-year in the period, driven by a young, increasingly affluent, and mobile population that is prioritizing travel and experience over discretionary goods. We are also seeing sustained strength in non-air categories such as hotels, as travelers look for short-haul getaways and value-for-money options. Outbound and international travel have seen more mixed results.

The West Asia conflict and rerouting of flights led to higher airfares, longer routes, and uncertainty around certain long-haul destinations, which weighed on outbound travel sentiment. Industry-wide inquiries for some international destinations declined by roughly 10%-15% during the peak. At the same time, the medium-term outlook for outbound travel from India remains robust, with multiple industry reports projecting low-teens growth in outbound spend over the next decade as many more Indians travel overseas for leisure, business, and education. As visa regimes ease, connectivity improves, and new destinations ramp up targeted campaigns at Indian travelers, we see a long runway for growth in this segment. Our discussions with the foreign tourism boards also supports this view, with foreign tourism boards keenly awaiting the normalization of the situation to initiate joint marketing campaigns to stimulate demand.

Given our higher business mix of international travel and MICE, these near-term headwinds have had a disproportionate impact on our business. However, based on past cycles and what we are already seeing in the market, we expect this to recover quickly as the macro environment stabilizes. As we have seen in the past, revenge travel following periods of disruption has been very strong and prompt both in India and globally, and we expect it to be the same this time around. In fact, we are already seeing early signs of this in our own numbers. In the first half of the current quarter, our MICE bookings are trending approximately 50% higher than the first quarter. Importantly, if we step back from these temporary factors, the underlying travel opportunity in India continues to strengthen.

Rising disposable incomes, improving airport and road infrastructure, and a growing preference for experiences are supporting greater demand for domestic tourism, while corporate mobility is being supported by continued economic activity and investments. Importantly, the shift from offline to online travel still has a long way to go. Online channels currently account for only a small part of business travel and are expected to grow meaningfully faster than the broader market over the coming years. Against this backdrop, our Q1 performance reflects the resilience of our franchise and the benefits of our diversified model. Despite the challenging external environment, gross bookings increased 16.3% year-over-year to INR 21,007 million, which is approximately USD 222 million. Gross margin increased 6.1% to INR 1,227 million or approximately USD 13 million.

Total transactions grew 11%, and the air passenger volume increased 4.8%, roughly double the industry growth rate, reflecting continued market share expansion for us. Our corporate business also continues to demonstrate strong traction. During the quarter, we added 53 new corporate customers with an expected annual billable potential of INR 2.2 billion, which is approximately USD 23 million. This provides a healthy pipeline of incremental business as these accounts progressively ramp up. We believe this is where Yatra's differentiated positioning becomes particularly relevant. Our diversified business model across corporate and consumer travel, air, hotel, and other travel services, combined with our strong corporate relationships, extensive domestic hotel supply, and technology-led platform, gives us a strong foundation to capture the growing travel opportunity in India.

As the market continues to shift towards organized and online travel, and as outbound demand normalizes from current geopolitical disruptions, we believe we are well positioned to benefit from the structural transition and to deliver sustainable, profitable growth. With this, I will now hand you over to our CEO, Siddhartha Gupta, to walk you through the quarter's performance.

Sid. Thank you so much, Dhruv.