Yatra Online Limited: Q2 FY26 Soars with Strong Growth and Strategic AI Push

Yatra Online Limited has reported a stellar performance for the second quarter and first half of fiscal year 2026, significantly exceeding its own guidance. The company, a prominent player in India's online travel sector, demonstrated robust financial and operational growth, reinforcing its market leadership. For Q2 FY26, revenue from operations surged by 48% year-over-year to INR 350.9 crore. This impressive top-line growth translated into substantial profitability, with gross margins improving by 34% year-over-year to INR 125.7 crore. Adjusted EBITDA saw an 88% year-over-year increase, reaching INR 25.5 crore, while Profit After Tax (PAT) climbed by 96% year-over-year to INR 14.3 crore. These figures underscore the company's strong momentum and effective execution across its diverse business segments.

The strong performance was propelled by sustained demand and consistent execution across both corporate and consumer platforms. The corporate business, in particular, showed significant strengthening, driven by gains in higher-margin hotels and packages, and a meaningful contribution from the MICE (Meetings, Incentives, Conferences, and Exhibitions) segment. Yatra continued to expand its corporate client base, adding 34 new corporate accounts during the quarter with a potential annual billing of INR 261.5 crore. While the consumer segment experienced a slight year-over-year decline in air ticketing passenger volume, the company is implementing strategic initiatives to optimize customer acquisition costs and scale profitably in this segment.

Strategic Initiatives and Technological Edge

Yatra Online Limited is heavily investing in technology and strategic initiatives to maintain its competitive edge and drive future growth. A key focus is on AI-powered automation, particularly with the introduction of 'DIYA AI', a generative AI travel assistant. This tool aims to revolutionize flight and hotel search and booking, streamlining the entire travel journey from planning to payment. Management anticipates that DIYA AI will significantly enhance the corporate travel experience, acting as a concierge service that understands corporate policies and individual entitlements. This initiative is also expected to optimize operational efficiency, with a potential to reduce headcount by approximately 200 by the end of next year, leading to substantial cost savings.

In addition to DIYA AI, the company has rolled out a new UI design for its hotel booking platform. This redesign focuses on transparency, offering clear per-room, per-night pricing and upfront disclosures of all taxes and fees, which is expected to boost conversion rates and build greater customer trust. Complementing this, Yatra's 'Best Price Guarantee' ensures customers access the lowest hotel rates, further strengthening its consumer proposition. The company is also implementing AI-driven automation in expense management, which helps organizations reduce manual errors, improve compliance, and gain real-time visibility into financial operations, ultimately saving costs per report.

Financial Prudence and Future Outlook

Yatra's financial discipline is evident in its balance sheet management. The company has significantly reduced its gross debt from INR 54.6 crore as of March 31, 2025, to INR 21.1 crore as of September 30, 2025. This debt reduction, coupled with a robust cash position of INR 213.9 crore (including cash equivalents and term deposits), provides a strong foundation for future growth and investments. The company's Return on Capital Employed (ROCE) is projected to improve to around 8% plus for FY26 and further to 13-14% for FY27, driven by operational leverage and working capital optimization.

Management has expressed confidence in the company's trajectory, raising its Adjusted EBITDA growth guidance for the year from 30% to a revised 35-40% year-over-year. Revenue less service cost growth is expected to be 22-23% for FY26, with an EBITDA to gross margin ratio target of 30%. The company also anticipates an improvement in gross profit to adjusted EBITDA conversion in Q4 FY26. Furthermore, Yatra Online Limited recently received approval from the National Company Law Tribunal (NCLT) for a composite scheme of amalgamation involving six of its wholly-owned subsidiaries. This strategic move aims to simplify management, operational, and corporate structures, enhancing efficiencies and generating synergies across the group.

Sustained Growth and Investor Confidence

Yatra Online Limited's Q2 FY26 performance reflects strategic clarity and disciplined execution. The company's focus on expanding its corporate client base, leveraging AI for operational efficiencies, and maintaining a strong financial position positions it well for sustained growth. The management's conservative yet confident guidance, coupled with transparent disclosures and a proactive approach to market trends, instills investor confidence. Yatra is not just growing its numbers but also strengthening its core business model and technological capabilities to capitalize on the significant headroom for online penetration in India's travel market.