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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong growth in international air ticketing and hotel revenue, positive cash flow, and a robust cash position. Despite increased marketing expenses, margins are stable, and the company is optimistic about GST benefits boosting demand. Although no stock repurchase occurred, the extended buyback program is positive. Guidance for 20% growth in adjusted margins and expansion in ancillary services are promising. While there are concerns about negative net income due to finance costs and vague management responses, the overall sentiment is positive, supported by optimistic market growth prospects and strategic initiatives.
Adjusted Operating Profit $44.2 million, growth of 18% year-on-year. Reasons: Positive consumer sentiment towards travel, high propensity for experiential getaways, and short breaks.
International Air Ticketing Revenue Grew by over 29.6% year-on-year in constant currency terms. Reasons: Significant growth opportunity in international outbound travel from India, underpenetrated online segment.
International Hotels Revenue Grew by over 42% year-on-year. Reasons: Rising air connectivity and accelerated shift from offline to online travel purchasing behavior.
Hotels and Packages Adjusted Margin Growth of 21.6% year-on-year in constant currency. Reasons: Strong demand for short holidays and weekend getaways, robust growth in corporate hotel segment.
Bus Ticketing Adjusted Margin Growth of 44.1% year-on-year in constant currency. Reasons: Strong inventory addition, festive demand, and onboarding of state transport corporations.
Air Ticketing Adjusted Margin $102.8 million, growth of 10.6% year-on-year in constant currency. Reasons: Maintained 30% market share in domestic air market, faster growth in international air ticketing business.
Others Category Adjusted Margin $20.5 million, growth of 29.7% year-on-year in constant currency. Reasons: Growth in ancillary services such as travel insurance, ForEx, and other transport services like cabs and rails.
Cash and Cash Equivalents $835 million, increase of $31 million over the previous quarter. Reasons: Operational performance and disciplined financial management.
AI-powered conversational travel assistant Myra: Launched in August 2025, available in English and Hindi with plans to expand to more Indian languages. It has scaled to over 25,000 conversations daily and is enhancing user engagement with 35% of travelers engaging up to 90 days before their trip.
GenAI-powered presales chatbot for cabs: Acts as an information provider and recommender, driving high conversion rates compared to traditional agent-led assistance.
GenAI voice agent for flights and hotels: Handles customer queries via calls, offering resolutions in the same call. Integrated with telephony systems to handle complex queries like date changes and cancellations.
International air ticketing revenue: Grew by over 29.6% year-on-year in constant currency terms, outpacing industry growth.
International hotels revenue: Increased by over 42% year-on-year, with international business now contributing 28% to overall revenue, up from 25% last year.
Phu Quoc, Vietnam holiday packages: Launched curated packages with exclusive direct flights starting December 2025, reducing travel time significantly.
Adjusted operating profit: Reached $44.2 million, an 18% year-on-year growth.
Accommodation business: Delivered 18% volume growth year-on-year, with 95,000+ accommodation options across 2,000+ cities in India.
Bus ticketing business: Strong growth with all regions growing 20%+ year-on-year, supported by inventory additions and state transport partnerships.
AI integration: Focused on enhancing customer experience and productivity through AI, including Myra and GenAI-powered tools.
Expansion in Tier 2 and Tier 3 cities: Voice-first engagement strategy with Myra, achieving 50% higher voice adoption in these regions compared to metros.
Corporate travel growth: Active corporate customer count on myBiz and Quest2Travel increased significantly year-on-year.
Geopolitical tensions and external events: The Pahalgam terrorist attack and Ahmedabad airplane crash negatively impacted consumer sentiment for travel, particularly leisure travel.
Domestic aviation supply constraints: Supply-side constraints in the domestic aviation market led to slow recovery and a 3% year-on-year decline in domestic air passenger growth.
Excessive rainfall in North Indian states: Regions like Jammu & Kashmir, Ladakh, and Himachal Pradesh experienced degrowth in the 20s percentage range due to excessive rainfall, impacting travel demand.
Foreign exchange losses: A sharp weakness in INR versus USD resulted in a foreign currency loss of $14.3 million during the quarter.
Interest costs from convertible notes: Interest costs of $28.3 million were recognized due to zero-coupon convertible notes, impacting reported profitability despite no actual cash outflow.
Seasonal and macroeconomic challenges: Q2 is a seasonally slow quarter, and weak sentiment from Q1 carried over, further impacted by macroeconomic conditions like excessive rainfall.
Short-term domestic air market challenges: Domestic air market growth is hindered by supply issues, though expected to improve in H2.
International Air Travel Growth: The company sees significant growth opportunities in international outbound travel from India, which is underpenetrated from an online perspective. International air ticketing revenue grew by over 29.6% year-on-year in constant currency terms in Q2 fiscal year '26, outpacing industry growth.
International Hotels Revenue: International hotels revenue grew by over 42% year-on-year, with international business now contributing 28% to overall revenue, up from 25% last year.
Macroeconomic Impact on Travel: Recent fiscal and monetary policy measures, including GST rate rationalization, income tax cuts, and interest rate reductions, are expected to boost disposable income and discretionary spending. Analysts estimate these measures could unlock $3 billion to $3.5 billion in additional consumer spending in the latter half of fiscal year '26, supporting travel market growth.
AI-Powered Travel Assistant (Myra): The company launched the beta version of its AI-powered conversational travel assistant, Myra, in August 2025. Plans include expanding Myra to more Indian languages and enhancing its capabilities to transform travel planning and booking experiences.
Domestic Air Market Outlook: The domestic air market is expected to recover in H2 fiscal year '26, with daily departures projected to cross 3,200, similar to Q3 of last year. Long-term outlook for the Indian aviation sector remains robust.
Accommodation Business Growth: The accommodation business, including hotels, homestays, and holiday packages, delivered 18% volume growth year-on-year in Q2 fiscal year '26. The company continues to expand its supply base, now offering 95,000+ accommodation options across 2,000+ cities in India.
International Hotel Inventory Expansion: The company is increasing its hotel inventory across international destinations of interest to Indian travelers, focusing on enhancing relevance for Indian travelers by highlighting food options and other preferences.
New Holiday Packages: The company launched curated holiday packages to Phu Quoc, Vietnam, with exclusive direct flights starting December 9, 2025, reducing travel time and making the destination more accessible for Indian travelers.
Bus Ticketing Growth: The bus ticketing business witnessed strong growth in Q2 fiscal year '26, with all regions growing 20%+ year-on-year. Inventory addition is expected to continue in the upcoming quarter due to increased festive demand and GST reductions for bus procurement.
Corporate Travel Growth: The corporate travel business is witnessing strong growth, with active corporate customer counts increasing significantly year-on-year for both myBiz and Quest2Travel platforms.
Share Repurchase Program: On 2nd July, 2025, the company completed the repurchase and cancellation of 34.4 million Class B shares. This was funded through a capital raise of approximately $3.1 billion, which included a mix of primary offering of ordinary shares and zero coupon convertible senior notes maturing in 2030. The entire net proceeds from the offerings were used for this repurchase.
The earnings call highlights strong growth in international air ticketing and hotel revenue, positive cash flow, and a robust cash position. Despite increased marketing expenses, margins are stable, and the company is optimistic about GST benefits boosting demand. Although no stock repurchase occurred, the extended buyback program is positive. Guidance for 20% growth in adjusted margins and expansion in ancillary services are promising. While there are concerns about negative net income due to finance costs and vague management responses, the overall sentiment is positive, supported by optimistic market growth prospects and strategic initiatives.
The earnings call summary indicates strong financial performance with record high adjusted operating profit and significant revenue growth. The Q&A section reveals confidence in achieving growth targets and improving consumer sentiment. Management's optimistic outlook on international growth and ancillary services, along with a focus on AI initiatives, suggests positive future prospects. While there are minor concerns, such as unclear buyback policy and temporary air supply issues, the overall sentiment remains positive, likely leading to a stock price increase in the short term.
The earnings call highlights strong financial performance, with record high operating profits and gross booking values, alongside strategic expansion into new markets. Despite some competitive pressures and geopolitical impacts, management's optimistic guidance and focus on AI and technology investments suggest potential growth. The lack of a share buyback program is a slight drawback, but overall, the positive growth metrics and strategic initiatives indicate a likely positive stock price movement.
The company demonstrated strong financial performance with significant revenue and profit growth, despite geopolitical and supply chain challenges. The positive market sentiment is further supported by a share repurchase program and optimistic growth expectations. Management's strategy to leverage AI and maintain competitive advantage is well-received, and their focus on maintaining margins and growth trajectory aligns with investor interests. The Q&A section indicates confidence in overcoming temporary issues, and the ongoing recovery in travel sentiment is a positive sign for the near future.
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