Motilal Oswal maintains a bullish outlook on Yatra Online, projecting a rally in the second half despite recent weak earnings, driven by increased corporate bookings and strategic partnerships amidst geopolitical and demand challenges.
Motilal Oswal has kept its “Buy” view on Yatra Online and retained a target of Rs 135 a share, arguing that the travel platform could recover in the second half of the financial year even after a weak start, according to the brokerage note and a report in Livemint. The call comes at a time when the stock already has a broadly bullish Street backdrop, with analysts tracked by StockAnalysis carrying a consensus “Strong Buy” stance.
The optimism sits alongside a difficult quarterly showing. Yatra reported revenue of Rs 1,879 million, down 10.4% from a year earlier, while net profit slumped 97.9% to Rs 3 million. Adjusted EBITDA, a measure of operating earnings before interest, tax, depreciation and amortisation, fell 39.4% to Rs 151 million, Livemint reported. Even so, gross bookings rose 16.5% to Rs 21,007 million, suggesting the business is still driving more travel volume through its platform.
There were also signs of expansion on the corporate side. Yatra added 53 new corporate clients during the quarter, with an estimated annual billable potential of Rs 2,223 million, and struck a seven-year strategic partnership with Kanoo Travel to widen its international reach, according to Livemint. That mix of softer earnings but firmer business development appears to be central to Motilal Oswal’s view that the company can improve its margins later in the year.
Still, the route to a sustained rebound looks uncertain. The brokerage pointed to geopolitical disruption, weaker corporate travel spending and lower airline incentives as near-term pressures, while the travel sector continues to feel uneven demand in areas such as meetings, incentives, conferences and exhibitions. A separate report from Motilal Oswal in February said Yatra’s promoter sold a 1.8% stake to help fund legal and compliance costs, though no further sale was planned. For now, investors are being asked to look past the current earnings slump and focus on whether Yatra can convert higher bookings and new client wins into better profits.
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