Good morning, everyone. Welcome to Yatra 1Q ‘25 Earnings Conference Call. My name is Kiki and I will be your conference operator today. [Operator Instructions] I will now hand you over to your host, Manish Hemrajani, VP of Corporate Development and IR. Manish, please go ahead.

Thank you and good morning, everyone. Welcome to our fiscal first quarter 2025 financial results for the period ended June 30, 2024. I'm pleased to be joined on the call today by Yatra’s, CEO and Co-Founder of Dhruv Shringi; and CFO Rohan Mittal. The following discussion, including responses to your questions, reflects management views as of today, August 13, 2024. We don't take any obligation to update or revise the information. Before we begin our formal remarks, let me remind you that certain statements made on today's call may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially. For a description of these risks, please refer to our filings with the SEC and our press release filed yesterday evening on the IR section of our website. With that, let me turn the call over to Dhruv. Dhruv, please go ahead.

Thank you, Manish, and good morning everyone, and thank you for joining us for our first quarter 2025 earnings call. For the quarter ended June 30, 2024, we reported total revenue of INR1,051 million, which is approximately $12.6 million. This represents a decline of 5% year-over-year. Adjusted Air Ticketing margins were impacted by a 21% decrease on account of lower volumes. The decline was primarily driven by reduced volumes in the B2C segment as we optimize discounts and intensify price competition in the market. Despite challenges in the B2C segment during the June quarter, the corporate travel segment showed robust growth across all key metrics. The company successfully secured 34-year corporate customer accounts representing an annual billing potential of INR2,028 million or approximately $24.3 million, with average billing potential of 77% sequentially. As the leader in corporate travel in India, our customer acquisition rates remain strong, consistently outperforming industry benchmarks. We also continue to actively evaluate strategic opportunities to further bolster our corporate travel segment. In addition, we made substantial progress in our meeting Incentives conferences and exhibitions segment, which is the MICE business, this quarter. A newly onboarded team has started damping up operations and while MICE contributions are modest for the June quarter, early signs for the current quarter are very encouraging, with significant business already secured in the September quarter. In addition, we have also scaled up teams to focus on the mid-market corporate segment and new products including Visa services and car rental services for corporate travelers. Adjusted EBITDA came in at INR65.6 million, approximately $800,000, a decrease from INR115.4 million in the same period last year, partly reflecting the impact of lower volumes, and partly due to the added expense of onboarding teams for new initiatives mentioned earlier. The cost of incremental hires is close…

Thank you, Dhruv. I will now review our numbers for the quarter ended 30 June 2024. We saw a 17% Y-o-Y decline in our gross bookings. This was mostly due to the 20% decline in our air gross bookings, as explained earlier. Our hotel and packages gross bookings remained flattish. Our overall adjusted margin for the quarter decreased by 15% Y-o-Y. Our adjusted margins for the air ticketing business were at 6.8% and 11.6% for hotels and packages. Moving on to expenses, as a percentage of total gross booking value, our marketing and sales promotion expenses reduced sharply by 35% on a Y-o-Y basis. Our personal expenses increased by 23% Y-o-Y as we continued to invest in talent to build out our mid-market, MICE, Visa, and Expense Management solutions. Other costs remained largely range-bound. On an overall basis, adjusted EBITDA was INR65.6 million, compared to INR115 million in the quarter ended June 24. Lastly, as of 30 of June, we were carrying cash, cash equivalents and turn deposits of INR4.5 billion, which is approximately $54 million on our books. And our gross debt is to an all-time low level of INR210 million, which is roughly $2.5 million. With this, we conclude our prepared remarks, and I'd like to hand it over to the moderator for Q&A. Thank you.

Thank you. [Operator Instructions] The first question we received is from Scott Beck from HC Wainwright. Scott, your line is open. Please go ahead.

Hello, everyone. Thank you for taking my questions. Dhruv, you touched on it in the prepared remarks, but could you give us a little more color on what options are on the table in regards to the independent committee? And maybe what a reasonable timeline is to expect some decisions to be made?

Sure. So, with regards to the independent committee, the committee is currently working with advisors on evaluating the multiple options in front of us for simplifying our corporate structure. There are a couple of preferred groups that we've narrowed this down to, and now the committee along with the advisors is working with the regulators to understand the process and the feasibility of the different structures that are there in front of the company. In terms of timeline, I think the structures which are there are a six to 12 month time of a timeline in terms of achieving full simplification of the process. This is, you know, in certain scenarios dependent on regulators and different jurisdictions. This is only a broad guideline that I can share with [Technical Difficulty] not an exact number, as I said, because there are multiple regulators, which are involved in the process.

Sure, I can understand that. And is the goal here to create some sort of fungibility between the shares?

That is the end objective, to try and create a way through which the shareholders in the U.S. will get access [Indiscernible] to be in their stock.

Okay, perfect. I appreciate that color. Next, I want to ask about the B2C weakness. I'm curious, what of that that you saw in the quarters being driven by just kind of temporary softness in travel demand versus what may be more permanent headwind in direct sales of tickets from India's largest carrier?

So there are two factors playing in right now, one is the supply side constraint. So as I had mentioned in our last earnings call, 75 aircrafts are taken out by Indigo, because of the issue that they were facing with the Pratt & Whitney engines. This is a well-publicized litigation and issue which is going on between Indigo and Pratt & Whitney. So that's the one thing which is there on account of which supply is limited in the country. The other challenge which is there, which has got accentuated, is the view that Indigo has started taking over the course of the last six months, and more so in the last quarter, of offering fares directly on its site which are meaningfully cheaper than what are available through third-party distribution channels. That I think is the bigger and more concerning trend that we are addressing at this point of time.

Okay that makes sense. And then lastly…

The supply [Multiple Speakers] obviously will get solved, right? Which is the matter of timing, but supplies will get addressed. So those engines won't get repaired, those aircrafts will come back right. So whether it happens with a delay of a quarter or two, that's between Indigo and Pratt & Whitney [Technical Difficulty] but the supply will come back. Whereas this is -- could potentially turn into a more secular trend when there are discussions which are happening between the airlines and the intermediaries in the country, who come to an equilibrium.

Okay, that's helpful. And then last one for me on the MICE business. It's nice to see you guys are starting to see some favorable momentum there. What is the typical contract structure? Are your customers under annual or multi-year contracts there? Just trying to understand from a visibility standpoint?

So there are some customers at this point of time, given that it's still relatively early days, there are annual contracts, which exist and there will also be some which are more event based and large event and cycle based contracts. We are not yet at a stage like our business travel where we have multi-year contracts. Here we are not yet at that stage where we are signing straight up the back multi-year contracts. Here these are most you know short to mid-term kind of contracts which are there as opposed to multi-year contracts. But as the business progresses and stabilizes, this should translate into multi-year contracts.

Okay, Perfect. Well, I appreciate the color guys. Thank you very much.

Not at all. Thank you, Scott.

The next question is from [Amish Mahal] (ph) from Private Industry. The line is now open. Please go ahead.

Hello, morning. Thanks for taking my question. I have a couple of questions. One is what percentage of your airline business is B2C? I thought it was a very, very small portion. So for this to have a 20% impact on your revenue seems a bit much? The second is, let's say the largest carrier's decision to go direct to customers. Does it not also affect your corporate business? And maybe a third relevant question is, how is it that companies like MakeMyTrip don't seem to have been impacted by the same issues that you're pointing out? Sorry for the last questions, but I can repeat that as needed.

No, thank you for the question. So let me clarify the first point in terms of the share, and you would have heard this on multiple calls from us. The B2C business still last year was accounting for almost 50%, between 55% to 60% of our gross bookings. So it's not an insignificant part of our business, it's a fairly material part of our business. And that's the reason why the overall impact on the gross bookings, because of what's happening. Secondly, in terms of between us and MakeMyTrip, the impact on MakeMyTrip is exactly the same as the impact that we are facing. The only difference which is there is that MakeMyTrip has taken the view of discounting on Air India and this para, which is the other airline in the country quite meaningfully to offset some of the volume that they're losing on Indigo. You could do a quick search on any of the comparison platforms like Skyscanner or Google Flights and you'll be able to validate that. In terms of overall numbers, obviously, MakeMyTrip has a scale advantage on hotels and bus from where they are generating incremental profits which are helping them subsidize some of this gross investment on the air side. But the challenge that we are facing is something that everyone in the country is facing, not just us. To your third point on the corporate side, why would this not flow into the corporate segment? The reason behind that in fact on the corporate side, it's a managed travel services where corporate employees have to go through our platform to book their business travel needs. And typically what happens is these kinds of fares, which are offered on the airline site, which are direct, are the most restrictive fares with the least amount…

Yes, you did. Thanks a lot. I mean, really appreciate the details behind it. Just an additional question, if I may. The meeting management solution that -- or expense management tool that you launched, do you already have some traction with the mid-market segment that you're targeting? That's the question.

Yes, so we are currently running a pilot of that with a few of our customers, with a handful of our customers. That's the first phase which is there. We are also in discussion with some of our larger customers to see if this can replace more extensive global solutions, which are currently being used by the larger customers. But the initial subset that we are targeting is more on the mid-tier segment.

Thank you.

Thank you.

Thank you. The next question is from Cobb Sadler from Catamount. The line is now open. Please go ahead.

Hey guys, I have a question on the potential acquisitions that you may do. I think it was given two, is it one or more than two. And then also, what is the revenue size of these deals as it relates to the corporate business? I mean, is it going to double the corporate business? 20%, 30% and then have some follow-ups.

Cobb [Multiple Speakers]

Sorry, excuse me. And the timing of completion of these deals. Sorry, go ahead.

Sure, so Cobb these are the deals which are currently, it's hard for me to comment on an exact timing for ongoing discussions or dialogues that may or may not be happening. We said that we are evaluating multiple options. It's hard to give an exact timing to closure of any of the acquisitions. I don't want to set any expectations in terms of timing from a closure point of view. These are discussions which are ongoing and there are multiple such discussions which are ongoing. Our endeavor through the [Indiscernible], if I look at, you know, I can guide you to what we've said from an India IPO sample, three EMRs approximately $20 million for an acquisition or for multiple acquisitions. Whether this translates into one or multiple acquisitions, only once it's crystallized would we be able to share more details on that. In such time, there is no commitment in terms of that there is an acquisition which is actively going to happen in the vehicle.

Okay, so but all right, well, but you have aspirations to close and deal, I would assume and so in the number was that $20 million what you would pay or the revenue that you'd like to add?

So $20 million is what we have set aside as IPO proceeds in terms of an acquisition.

Okay, so you would use cash…

$20 million or up to $20 million would be potentially the payout for acquisitions. This could be for one acquisition or this could be for multiple acquisitions.

Could you use staff also or the $29 million cash?

[Multiple Speakers] it depends from a regulatory standpoint. When you do an IPO, you have to call out what are the end uses of the IPO proceeds and in the end use in the Indian IPO, with EMR, pay approximately $20 million for IPO, for acquisitions.

Okay, and you would use cash solely or could you use stock also and buy more revenue?

Yes, so we could use stock as well. That is nothing that holds us back from doing our stock drop or cash deal, yes.

Okay, got it. All right. And the timing, I mean, how long have you been at this? I guess, like -- why don't you have an idea on timing?

Cobb, your question is then implying that there is an active acquisition which is ongoing. And I'm qualifying that I can neither confirm nor deny any such thing that there is an active acquisition conversation that is going on.

Okay. All right. That's fair. And then on the fungibility of shares, did I get this right, you said six to 12 months, do you think you'd have an answer there? Or was that an answer to -- was that -- the question was how long it will take you to -- my question is, how long will it take you to know whether or not the shares will be fungible? And the other question is what do you think that the Indian investor base would think about that? I mean I'm guessing they don't -- the structure -- and I understand you're kind of the first dual listing company in India. And so my guess is they're a little confused as probably all investors are about the structure. So do you think that would be a positive for them if you were able to collapse the structure? That's one question. And then do I have it right that you think that fungibility, if it were to occur, would occur within six to 12 months?

Yes. So in terms of the second part, based on the discussions that we've had with various advisers across multiple jurisdictions, six to 12 months could potentially be the time line or a fungibility event. As I said, given that there are multiple regulators involved in this, it could be a lengthier process. But our best estimate at this point based on the advice that we have from the council that we have in different jurisdictions. It is an event which could take up to 12 months.

Okay. And then -- so the multiple entities that are involved, is that -- so you probably have the SEC and you probably have SEBI. Is there other regulatory agencies or bodies that need to sign off?

So these are the two main bodies, there is the SEC and then there is SEBI. There will also be tax clearances, et cetera, which will be needed in India depending on the structure that we have got or it could also be Indian ports if it's a merger structure that we adopt. So there are a couple of options that we are working closely with. I mean each one of them, there are different sets of regulators that are involved in the process. As you rightly also pointed out, this is a fairly unique scenario. There aren't enough residences of a scenario like this that one can look at and use that as a basis of saying it is a more definitive time line or doing something like this.

Okay. And I guess by doing this, you will eliminate some overhead costs, filing costs, legal costs, management costs. Would you collapse the Board? Maybe you have some board costs that are limited. Do you roughly have an estimate of how much cost would be eliminated associated with collapsing of the listings, if that works to occur?

Sure. Today, there is approximately $2 million to $2.5 million of costs, which is associated with being the U.S. listed entity, that cost would go away on collapsing of this structure. A large part of that cost will go away on collapsing of the structure.

Okay. All right. And then just on the expense management product, could you just talk briefly about -- so it sounds like it's -- did I get that right that you said that you may see some revenue -- was that revenue from newly added corporate customers or expense management? I didn't hear that clearly. When do you think expense management, the revenue could actually start to be somewhat meaningful? And then I have a follow-up on expense management.

So revenue [Multiple Speakers] sure. So for the revenue to be material, on the expense management front. I think we are looking at more at like next fiscal year for the revenue to be material. At this point of time, we are going through a process where we are inducing trial with our customers. We are offering it to some of our customers as an initial bundle proposition for a period of time, whether it's easy to use, right? Or there is a premium kind of service, which is there that certain features are available to the free to use and beyond that, then they have to look at the pricing model. So in this year, at least, I feel it's going to be still relatively immaterial from an earnings point of view. But next fiscal year, it will become more relevant. So today, the focus is trying to make sure that we can get a larger installed base on the expense side as opposed to looking at monetizing that on day zero.

Okay. And the product -- is it kind of -- is it I believe you said that you're going to target both, but initially in the way software typically works is SMB? Is it fully featured, I mean so I guess is your comp -- competitor, Zaggle type company? And are your features and functionality similar to the more fully featured suites? Or is it kind of a basic product to start for SMB that don't want to pay for something like Zaggle or another competitor?

So today, the product is in a situation where in shape or it can definitely compete with the likes of Zaggle in terms of the expense side of the things. What we are looking at out here is a solution which uses a lot of the new GenAI large language models for receipt analysis, which is much more advanced than the older models or older tools, which use OCR-based recognition. OCR-based recognition by its very nature has a limited amount of accuracy, whereas the LLM models, because of the self-learning aspect of theirs and tend to be much better in terms of analyzing the expenses and capturing of the data. So we feel tune of the solution is fairly comparable with the other mid-market proposition products, which are available today. The advantage which is there is that it comes in as a tightly mix or can be offered as a tightly mix solution between travel and expense or it can be sold singularly as an expense solution as well. So that is the advantage that we are offering to customers, especially those who are our existing customers, so that we provide a more seamless experience between travel and expense for their employees.

Okay. All right. And then just back to the fungibility, I guess, you have some investors -- U.S. investors that have FPI licenses that can actually just -- as I understand it, can actually just take Indian shares and then hold them buy more, sell some, whatever. And then you have some of the U.S. investors that do not have FPI licenses, they're smaller. And so how would that work with them? They would -- would you have -- would Indian investors acquire the U.S. shares from, if they wanted to sell of U.S. investors? Or will there be some sort of offering? Or would there be some sort of private equity firm that would come in? I'm just guessing, overall, the margin in the Indian investor would be more likely to acquire shares. I mean, I'm assuming there's some Indian investors that don't like the structure and would then want to add or buy for the first time shares. And so that should be a very, very positive event. But I guess going back to the FPI situation, how would you handle -- and if they have FPI license, it's not a problem, but if you don't have one, then what do you do?

Sir, if that does turn to be [Multiple Speakers] go down cost. At that point, we will also see what assistance we can provide through local bankers out here to make sure that the shareholders are able to get access to the share. So that's something that we will try and do from our side, but it's only something that will come up much closer to once the option gets finalized, and we will factor this into our decision-making process, as well as to how easy or difficult would it be for the shareholders to get access to the India shares?

Okay. All right. That sounds good. I mean, that's a major net positive, in my opinion, because the U.S. shares are trading at a huge discount. So good luck in collapsing that. Thanks.

Sure, thank you. The only word of caution that I will put out back up for [Indiscernible] reasons, is that from a timing point of view, it is a slightly lengthy process. So I want to just get that out there these so that from an expectation setting point of view, we don't set the wrong expectation with shareholders.

I understand that, but you did say six to 12 months?

That's right. That is right. So that's the current timeline that we are working towards based on advice from advisers.

Okay, roger that. Than you.

Sure. Thank you.

Thank you. [Operator Instructions] The next question is from Amish Mahal. Your line is now open. Please go ahead.

Thanks for taking the additional question. Just a question actually on the buyback of the U.S. shares. You had completed a buyback of $5 million. Is there any reason why the number should not be higher considering the steep discount and the best use of corporate funds? I realized it's a board decision, but I wanted to know whether there's a rationale for capping that $5 million.

There is no capping on that. It's just that as we go through this process, we are evaluating multiple options, and we might also need to convert some cash for doing the larger restructuring that we spoke about. So once we have greater clarity on the route that they are going down, at that point, we can evaluate if the buyback needs to be expanded or we do this in one go as part of the restructuring.

Okay, thank you. That's very clear.

Sure.

Thank you. As we currently have no further questions, I will now hand back to the management team for closing remarks.

Thank you, everyone, for joining the call today. As always, we are available for follow-ups. Please feel free to reach out for the same. Kiki, you can now close the call. Thank you.

Thank you.

Thank you. This concludes today's conference call. You may now disconnect your lines.