Detailed Narrative
Q3 FY26 Performance Overview
Yatra Online reported a robust Q3 FY26 with revenue from operations growing 9% YoY to INR 2,568 million and gross margin increasing 23% YoY to INR 1,277 million. Adjusted EBITDA surged 41% YoY to INR 247 million, translating to a healthy 19.34% adjusted EBITDA to gross margin ratio. However, PAT declined 17% YoY to INR 83 million, largely due to a one-time📎 charge of INR 38 million related to new labor codes.
Corporate Travel Momentum & New Initiatives
The corporate and MICE businesses continued strong performance, onboarding 40 new corporate clients with an annual billing potential of Rs 2.2 billion. The newly launched expense management solution gained traction with 8 new customers, expected to contribute INR 5-7 crores in revenue by FY27. Management highlighted the strategic importance of digitizing travel procurement via AI platforms for end-to-end automation and cost savings, positioning Yatra as a leader in online adoption.
B2C Business Turnaround & Air Segment Strength
The B2C business has 'turned the corner' and is growing with profitable unit economics, supported by tech innovations driving better conversion and upsell opportunities. The Air Ticketing segment saw gross bookings grow 22% YoY to INR 16,931 million, with passenger volume up 14% YoY, and take rates improving from 6.2% to 7.1%. This growth was achieved despite industry-wide disruptions in December due to stricter flight duty travel limitation norms.
Hotels & Packages Growth and Margin Improvement
The Hotels and Packages segment reported 22% YoY growth in hotel room nights to 508,000 and 20% YoY growth in gross bookings to INR 4,306 million. Gross margins expanded 25% YoY to INR 438 million, with margins improving from 9.7% to 10.17%. The company is leveraging its extensive hotel inventory and platform retooling to drive corporate hotel adoption, offering both corporate and retail rates to customers.
Working Capital Impact and MICE Deferrals
Q3 saw a temporary deployment of INR 35-40 crores in extra working capital due to MICE advances and entity amalgamation, funded by overdraft facilities. A significant portion (70-75%) of MICE bookings deferred from Q3 due to December flight disruptions are expected to roll over into Q4 FY26, with normalization of working capital anticipated by the end of March. Management clarified that MICE is a highly margin-accretive business with contribution margins north of 50%.
Strategic Outlook & ROCE Focus
Yatra reiterated its FY26 guidance for 22% RLSC growth and 37.5% Adjusted EBITDA growth, confirming it is 'firmly on track.' The company aims for double-digit ROCE by next year, up from approximately 7% in the current year, driven by high incremental ROCE of over 30% per new corporate customer. Long-term gross booking growth is projected in the 'early 20s' for the next 2-3 years, with air growing 15-20% and hotels upwards of 25%.