Yatra eyes break-even in 2019
Nasdaq-listed Indian online travel firm Yatra aims to breakeven in the first quarter of FY20, as revenues continue to expand and promotional costs decline. It has trimmed its adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) loss by 19 per cent to $3.2 million in the quarter ended September on improved efficiency in marketing spends.
The marketing and sales promotion expenses decreased 76 per cent to $2.7 million in the quarter against $11.4 million in year-ago period. “We continue to make a strong progress towards break-even. If you look at sequentially, in the previous quarter at current exchange rates, I think our loss would translate into something in the range of $5 million-$5.5 million. It has come down to about $3.2 million in the quarter. Directionally, we continue to see meaningful improvement in our operating loss on a q-o-q basis. We should see this happening in the subsequent two-three quarters, too, as we get to break-even. We are targeting this in the April-June quarter of 2019," Dhruv Shringi, co-founder and chief executive officer, Yatra has said in an investor call earlier this month.
It will be the first break-even in the company's history of little over twelve years. The adjusted Ebitda loss stood at $29 million in FY18. The firm enjoys a market capitalisation of $220 million. Yatra competes with online travel market leader MakeMyTrip, also a Nasdaqlisted firm, and Cleartrip, among others in the domestic market.
Shringi believes the company will continue to optimise on the cost base and bring efficiency in marketing spends. It will maintain the momentum of growth and new customer wins, especially on the corporate travel side, where it claims to be the market leader. Yatra did gross travel bookings (hotels, flights and packages) worth $400 million during the quarter under review - a strong 24 per cent growth over the year-ago period. It has seen a healthy 30 per cent growth in online hotel room nights booked during the quarter to 0.57 million. The number of air passengers booked also rose 22 per cent to 2.7 million. As of September 30, the company had cash and cash equivalents worth $68.3 million on its balance sheet.
Alok Vaish, chief financial officerat, Yatra, said the company is positive on the Indian macro environment. "We see solid growth potential in air and hotels industry. We believe we are uniquely positioned with a strong presence and market leadership in corporate travel. We reiterate our guidance for FY19 of over 20 per cent growth in adjusted revenue, with a meaningful improvement in our adjusted Ebitda loss on the back of efficiency in marketing spends and leverage in operating costs", he said.
Online travel booking is a small fraction of total Indian travel business, especially in the hotel space. Companies have been luring customers to online booking platforms through discounts and offers for last two-three years. However, players are now turning rational.