Business Context and Reporting Period
Company: Yatra Online, Inc.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Date: June 20, 2018
Purpose: Update to risk factors and business description previously disclosed in the Annual Report on Form 20-F (filed June 30, 2017).
Business Overview: Yatra is a leading online travel company in India, operating as a "one-stop shop" for leisure and business travelers. It utilizes a single technology platform across three go-to-market channels: Business-to-Consumer (B2C), Business-to-Enterprise (B2E), and Business-to-Business-to-Consumer (B2B2C). The company offers air ticketing, hotel bookings, holiday packages, rail/bus ticketing, and ancillary services.
Key Financial Metrics
The filing provides comparative data for fiscal years 2017 and 2018 (ended March 31). Specific quarterly cash flow, debt, and liquidity figures are not detailed in this specific text, though the company states it believes existing cash is sufficient for the next 12 months.
| Metric | Fiscal Year 2018 | Fiscal Year 2017 | Change |
|---|---|---|---|
| Revenue | INR 12,248.5 million | INR 9,356.8 million | +30.9% |
| Revenue Less Service Cost (Non-IFRS) | INR 7,317.8 million | INR 5,177.3 million | +41.3% |
| Gross Bookings (Air & Hotels) | INR 92,542.5 million | INR 67,998.0 million | +36.1% |
| Net Loss | INR 4,052.0 million | INR 5,937.0 million | Loss reduced by ~31.7% |
Liquidity & Capital: The company states its existing cash and cash equivalents are sufficient to meet anticipated requirements for at least the next 12 months. It may need to raise additional funds in the future, which could involve dilution or debt covenants.
Material Changes and Operational Highlights
- Profitability Trend: While the company continues to incur net losses, the net loss decreased significantly from INR 5,937.0 million in FY2017 to INR 4,052.0 million in FY2018.
- Acquisition of ATB: In Q2 FY2018, Yatra completed the majority acquisition of Air Travel Bureau Limited (ATB), India's largest independent corporate travel services provider. This reinforces Yatra's leadership in the B2E segment. The acquisition of the remaining ATB shares is expected in Q3 2018, with a total purchase price estimated between INR 1,469 million and INR 1,796 million.
- Mobile Growth: Mobile traffic grew 93% and mobile bookings increased 47% year-over-year. In Q4 FY2018, mobile accounted for 81% of total traffic and 69% of bookings on the yatra.com platform.
- Customer Base: Cumulative travelers reached approximately 7.9 million as of March 31, 2018. The 90-day repeat rate was approximately 52% as of December 2017.
- Regulatory Impact: The implementation of India's Goods and Services Tax (GST) in July 2017 increased tax rates on most travel services from 15% to 18%, initially impacting tour operator services. Compliance costs have increased due to decentralized registration requirements.
Outlook, Risks, and Contingencies
Management Commentary & Strategy:
- Mobile-First Strategy: Yatra is aggressively pursuing a "Mobile First" model, including a strategic partnership with Reliance Jio to pre-install the Yatra app on new 4G devices.
- Market Expansion: Focus on Tier 2 and Tier 3 cities in India where online penetration is lower but growth potential is high.
- Loyalty Programs: Continued investment in the "eCash" program and the new "Yatra Platinum Program" to increase share of wallet and cross-sell between business and leisure travelers.
Key Risks:
- Competition: Highly competitive Indian travel market with well-funded competitors (e.g., MakeMyTrip, Cleartrip, Agoda, Booking.com) and meta-search engines (Google, TripAdvisor).
- Supplier Dependence: Significant reliance on a small number of domestic airlines for Air Ticketing revenue. Suppliers may reduce commissions or drive customers to direct booking channels.
- Regulatory & Tax: Uncertainty regarding Indian tax laws, including "Place of Effective Management" (PoEM) rules, General Anti-Avoidance Rules (GAAR), and potential changes to Foreign Direct Investment (FDI) policies in e-commerce.
- Macroeconomic Factors: Sensitivity to Indian economic slowdowns, currency fluctuations (INR vs. USD), and geopolitical instability or natural disasters affecting travel demand.
- Internal Controls: The company is an Emerging Growth Company (EGC) and its internal controls over financial reporting are not yet required to meet all Section 404 Sarbanes-Oxley standards, though it is working toward compliance.
Investor Verification Checklist
- ATB Integration: Verify the timeline and financial impact of the full acquisition of Air Travel Bureau Limited (ATB) and the realization of anticipated synergies.
- Path to Profitability: Assess the sustainability of the reduced net loss and the timeline for achieving positive net income given continued investment in marketing and technology.
- Supplier Concentration: Review the specific revenue contribution of the top five domestic airlines and any recent changes in commission structures or contract terms.
- Regulatory Compliance: Monitor developments regarding Indian GST compliance costs, PoEM tax residency determinations, and FDI policy changes affecting e-commerce.
- Cash Position: Confirm the sufficiency of current cash reserves against the projected costs of the ATB acquisition completion and ongoing operational losses.