Yatra FY26: Record profitability, but Q4 volatility shows where the risks still sit

Yatra Online Limited closed FY26 with its strongest profitability on record, even though the March quarter showed a sharp drop in earnings. For the full year, revenue from operations rose 27.2 percent year on year to INR 10,065 million. Gross margin, defined as revenue less service cost, grew 24.5 percent to INR 4,824 million. EBITDA increased to INR 855 million and PAT rose to INR 468 million.

The quarter ended March 2026 was weaker. Revenue from operations fell 13.7 percent year on year to INR 1,890 million. EBITDA declined 45.5 percent to INR 126 million and PAT declined 46.1 percent to INR 82 million. Management attributed the softness primarily to geopolitical disruption, which affected MICE and certain international corporate group travel programs, including cancellations and deferrals into FY27.

FY26 performance: growth with improving operating leverage

FY26 is the first period in this cycle where the operating leverage narrative became clearer. Adjusted EBITDA grew 37.5 percent year on year to INR 917 million, while EBITDA rose 53.2 percent to INR 855 million. Even though other income fell to INR 52 million from INR 109 million in FY25, operating expenses grew at a slower pace than gross margin, supporting the uplift.

A notable marker of the year was cash generation. Cash flow from operations improved to INR 761 million compared with INR 73 million in FY25. The cash flow statement also shows that working capital drag reduced materially, with working capital deployment at INR 16 million in FY26 versus negative INR 400 million in FY25. At the end of FY26, cash and cash equivalents including term deposits stood at INR 2,230 million.

Management also highlighted a one-time statutory impact from new labour codes of INR 38 million in Q3. In the presentation, it noted that PAT for the year would have been INR 506 million excluding this one-time effect.

Segment view: air margins improved; hotels scaled; mix matters

Operational disclosures in the presentation give a clearer picture of where growth came from.

Air remained the largest contributor by gross bookings. FY26 gross air bookings grew 12 percent to INR 61,874 million and air gross margin increased 30 percent to INR 2,449 million. Air gross margin percentage improved to 3.96 percent from 3.42 percent in FY25. Management used this as evidence of structural improvement in the quality of the business mix.

Hotels and packages also showed strong scale-up. FY26 gross bookings grew to INR 16,578 million from INR 13,053 million in FY25. Gross margin rose to INR 1,534 million from INR 1,122 million. Hotel room nights were 1,936 thousand in FY26 compared with 1,663 thousand in FY25.

In Q4, the hotel engine still ran, but the mix shifted. Room nights grew 36 percent year on year to 500 thousand while gross H and P bookings grew 9 percent to INR 3,697 million. Management explained in the concall that average realizations and discount optics were affected by the disruption in higher-ticket MICE and international programs and a higher share of domestic and affiliate-led bookings.

Corporate engine and pipeline: wins provide visibility, but conversion takes time

Yatra positions itself primarily as a managed corporate travel platform. In FY26, it added 163 new corporate customers, with expected annual volumes of INR 9,568 million. In Q4 alone, it added 55 new corporate customers with expected annual volumes of INR 2,709 million.

Management repeatedly pointed out that corporate wins typically take three to six months to go live and ramp to full trading potential. This is important because it frames the client win metric as forward revenue visibility rather than immediate quarter revenue.

The company also addressed a key investor concern on customer concentration by industry. In Q&A, management said IT services accounted for about 20 percent of business around FY24 but is now under 10 percent of large corporate business, and around 7 percent of total B2E when including other streams.

Another element of the corporate strategy is upsell. Management mentioned two focus areas:

First, an expense management product called Recap, which it said is anchored around AI. In Q&A, management stated it added 8 logos in Q3 and another 8 logos in Q4, with 4 going live in Q4.

Second, MICE. Management described MICE as structurally attractive because it is linked to corporate engagement and reward programs, but acknowledged that it is also a source of volatility when disruptions affect international travel corridors and airfares.

Strategy and technology: distribution and automation as margin levers

Beyond client wins, the year’s strategic narrative leaned on distribution and automation.

Management stated it enhanced its API infrastructure framework and migrated to Google Cloud, which improved its ability to distribute hotel content to domestic and international partners. It described this as margin accretive and expects it to scale.

On AI, management positioned its focus more on automating internal processes and servicing, especially within the corporate travel walled-garden environment. It also discussed readiness for agentic integrations and protocol work, but did not quantify financial impact.

A more practical working-capital lever discussed was a corporate credit card initiative. Management said teams are in place and it expects a product to be ready within a quarter or two, but also explained the complexity. Airline partnerships are needed to manage payment gateway charges, otherwise take rates can be impacted even as receivables improve.

What to watch next

The FY26 result strengthened the argument that Yatra can grow while improving profitability and cash conversion. But Q4 highlighted that parts of the model, especially MICE and international corporate programs, can be sensitive to macro and geopolitical shocks.

Management’s forward commentary remained medium-term in nature. It reiterated its 20-30 model: around 20 percent CAGR in revenue less service cost and 30 percent CAGR in adjusted EBITDA over the medium term. It also stated that Q1 FY27 is likely to remain muted, while the second half of FY27 is expected to be materially stronger than the first half if conditions normalize.

For investors, the near-term questions are less about demand in India and more about mix, the pace at which deferred MICE and international corporate travel returns, and whether the company can keep improving working capital without hurting take rates.