Yatra Online Ltd (NSE: YATRA) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Unidentified Speaker
Dhruv Shringi — Co-Founder & Exec Chairman
Siddhartha Gupta — Chief Executive Officer
Anuj Sethi — Chief Financial Officer
Analysts:
Unidentified Participant
Anmol Garg — Analyst
Biplab Debbarma — Analyst
Hardik Doshi — Analyst
Chirag Karia — Analyst
Vivek Desai — Analyst
Sumukh U — Analyst
Gunjan Kabra — Analyst
Ankush Agrawal — Analyst
Vinay Nadkarni — Analyst
Naeem Patel — Analyst
Rajit Aggarwal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Yatra Online Limited Q3FY26 earnings conference call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Garg from Dam Capital Advisors Limited. Thank you. And over to you sir.
Anmol Garg — Analyst
Thanks, Anushka. Good morning everyone. On behalf of Dam Capital, we welcome you all to Yatra’s Q3 and 9 month FY26 post result earnings call. Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s call may be forward looking in nature. And some forward looking statements are subject to risk and uncertainties which could cause results to differ from those anticipated. From the call. We have the management. We have with us Mr. Dhruv Shringi, Executive Chairperson and Whole Time Director. Mr. Siddharth Gupta, a Chief Executive Officer and Mr. Anuj Kumar Sethi, Chief Financial Officer of the company.
Now I hand over the call to Dhruv for his opening remarks. Thank you. And over to you, Dhruv.
Dhruv Shringi — Co-Founder & Exec Chairman
And good morning everyone. Thank you for joining us in this conference call to discuss our third quarter and nine months ended of fiscal year 2026 earnings. Let me start by briefing you first on the events that happened during the quarter and how it has impacted the industry. Then our new CEO Siddharth Gupta will tell you about the operational performance for the period under review. Following which our CFO Mr. Anut Sethi will brief you on the financial performance in detail. The third quarter, which is typically a strong period for leisure travel in India, witnessed healthy demand across the industry in the first two months of the quarter.
This was supported by the festive season and multiple long weekends which drove higher travel activity and improved customer sentiment during the quarter. December, however, saw significant disruption in the first two weeks of the month. This was following the implementation of the stricter flight duty travel limitation norms which led to operational challenges for the airline and a spike in cancellation and delays across the entire industry. Industry data indicates that domestic air passenger traffic declined modestly during this period reflecting capacity rationalization and these temporary disruptions. Importantly though, this was just an operational event rather than a demand issue and we saw load factors recover subsequently underscoring the underlying strength of the travel industry and demand patterns in India.
A key positive during the period was the continued divergence between domestic and international travel trends. While domestic travel experienced short term headwinds in December, international travel remained strong with healthy year on year and sequential growth. This reinforces that outbound and long haul travel is in a structural upcycle benefiting organized travel players like Yatra who have a strong presence in the corporate and international travel franchise. Also, the recent union budget sends a clear and positive signal about the government’s long term commitment to the travel and tourism sector. By positioning tourism as a strategic growth initiative linked to the employment generation, foreign exchange earnings and regional development, the policy framework shifts from episodic support to building a more structural and sustainable ecosystem for the travel and hospitality sector.
Key measures such as the rationalization of TCS on overseas tour Packages to a uniform 2% rate are expected to lower upfront costs for consumers and improve the demand patterns for the organized players supporting this demand. In the outbound sector, we expect increased emphasis on destination connectivity through infrastructure enhancements and also on the domestic front see high speed rail corridors and waterways building out further domestic hospitality industry capabilities. There is a growing demand from Indian organizations also to digitize travel procurement via AI platforms that offer end to end automation, self service bookings and integrated expense management solutions prioritizing compliance and cost savings.
AI and predictive analytics platform can automate travel procurement by forecasting demand, optimizing costs, enforcing policies and enhancing risk management in real time. AI enabled self booking tools can perform real time policy compliance checks, flag risks like disruption or unrest via itinerary analysis and personalize itineraries with safety insights. Generative AI shifts from reactive auditing to predictive spend analytics and forecasting, cutting down the amount of effort and time needed for the admin functions to ensure compliance. Yatra, through its corporate self booking platform supported by its AI bot and its recap expense management solution is taking the lead in digitizing this industry and driving the shift towards online adoption.
Moving on more specifically to our business for the quarter, our B2C business has as projected earlier by us turned the corner and is now steadily growing with profitable unit economics. Additionally, our corporate and MICE businesses continue to perform strongly. Our business was well on track to deliver our strongest third quarter ever. However, the disruptions in the aviation market led to large scale cancellation of business travel which had an impact on revenue as well as increase the working capital deployed in the business. We will detail that more when Siddharth speaks about our operational performance in the quarter.
We remain optimistic about our trajectory supported by our continued focus on scaling the corporate travel business. The steady growth in corporate bookings along with the increasing contribution for higher margin hotels and MICE segments positioned us well for sustained margin expansion and profitable growth over the long term. With this, let me now introduce you to Mr. Siddharth Gupta who recently joined us as our CEO. Siddharth Asit brings with him a wealth of experience across the B2B SaaS industry and in his last role was the President of Mercer Consulting in India and was also heading their SaaS based talent assessment program globally.
Prior to this, Sid has also held leadership roles in large tech and SaaS companies like Sapna. With that, let me hand you over to Sid. Sid
Siddhartha Gupta — Chief Executive Officer
thank you Dhruv for giving a preamble on our quarter performance and the industry trends. A very good morning everyone. Adding to Dhruv’s comments, despite an industry wide disruption in the airline during the quarter, Yasra continued to deliver growth in its air ticketing business supported by seasonally strong B2C travel demand. Gross bookings in the air ticketing increased 22% year on year supported by 14% growth in air passenger which far exceeds the industry growth of about 1%. Take rates also improved from 6.2% to 7.1% on account of the quarter being more B2C focused in the hotels and packages segment, our overall performance during the quarter remained healthy.
However, we did see some temporary impact in the miles and corporate events sub segment with a few bookings getting deferred due to flight disruptions. This resulted in a modest one time impact on the quarter, part of which we expect to roll over into quarter four. Supported by a continued strength in underlying corporate travel demand, gross bookings in the segment grew 20% year on year. Excluding the impact of deferment of the MICE business, hotels would have grown 30% on a standalone basis supported by strong growth in our corporate business and in our affiliate business. With gross take rates moderating slightly from 12.2% to 11.7% year on year on account of change in business mix.
Gross margins improved further from 9.7% to 10.2% year on year reflecting prudent discounting in B2C and better margin realizations from suppliers for corporate hotels. Our B2B to B2C mix was approximately 60, 40 for the quarter versus the nine month average of 6,535 in favor of B2B our corporate travel business continues its strong momentum. We onboarded 40 new corporate clients in the quarter, collectively adding an annual billing potential of rupees 2.2 billion. As mentioned earlier, the disruption happened during the highly productive first two weeks of December when corporate travel peaks before holiday. We saw deferment of mice travel into Q4 and Q1 of Next Financial year as a direct result of uncertainty in the travel during that period.
This deception not only adversely impacted our operating performance, but also led to incremental working capital deployment where advances had already been paid to vendors. For MICE groups, these impacts were largely limited to the month of December and the business is back on track. In the corporate business, there’s more to. Share the early response to our expense management solution has been very, very encouraging. We have onboarded eight new customers in one quarter itself. They are all on our now expense management platform. Early traction proves that Yatra understands the pulse of what our corporate customers need. This solution has not only become a door opener for getting new accounts, but also gives us a huge upsell potential in our existing accounts. Just a few thoughts on what you can expect from Yatra in quarters ahead. Our consumer focused line of business has returned to growth path while improving margins.
This was a result of sharp execution coupled with successful tapping into partnerships and affiliates for demand generation in the near future. You should hear more on organic demand generation projects making impact helping us further improve margins in this line of business. On Corporate Value Proposition Our corporate value proposition still has a huge headroom for growth. Online penetration in corporate travel market is just about 23%. We have laid a very strong foundation for chasing this potential. We have sharpened our go to market by establishing separate teams to chase large and small medium enterprises. Demand generation is now amplified by a new Insight sales team which has started augmenting the efforts of the team on ground.
Early signs are very very promising. Beyond customer acquisition, our farming teams have won multi year renewals from some of our largest customers, proving that corporates want trusted partners who can deliver value to them. Needless to say that our success is closely tied to the speed at which we can deliver tech innovations. Our early investments in adding talent to our product and tech teams has started showing results. You can expect us to further add gap between us and what’s available in the market. Hope that gives you a flavor of where we headed. I will pause and hand over to Anuj who will brief you on the financial performance for the quarter under review.
Anuj.
Anuj Sethi — Chief Financial Officer
Thank you, Siddharth. Good morning everyone. For the third quarter of financial year 2026 on a consolidated basis, our revenue from operations grew 9% year on year to INR25.68 million, driven by steady demand across key segments with robust growth from air ticketing business. Our gross margin, defined as revenue service cost rose 23% year on year to INR1.77 million, driven by better traction in air booking and continued momentum in hotels and packages. Adjusted EBITDA surged 41% year on year to INR2.47 million, translating to a healthy 19.34% adjusted EBITDA to gross margin ratio Profit after tax to debt INR 83 million down 17% year on year, largely reflecting a one time charge of INR 38 million related to implementation of new labor codes for the nine months ended of the financial year of 2026.
On a consolidated basis, our revenue from operations group 43% year on year to INR 8.75 million. Our gross margin increased 33% year on year to INR 3691 million. Adjusted EBITDA grew strongly by 81% year on year to INR 751 million. Healthy adjusted EBITDA to a gross margin ratio of 20.35%. Importantly, both our RLSC and EBITDA remained comfortably above our stated guidance. Profit after tax for the period increased 81% year on year to INR 386 million. In terms of segmental performance, our air ticketing passenger volume grew 14% year on year to 1490 1000. Our gross air bookings grew 22% year on year INR 16,931 million and our gross air margin rose 32% year on year to INR 611 million with gross margins improving from 3.4% to 3.6%.
Under the hotels and packages segment, hotel room nights grew by 22% year on year to 508,000. Gross bookings increased 20% year on year to INR 4,306 million while gross margins expanded 25% year on year to INR438 million with margins improving from 9.7% to 10.17%. On the liquidity front, cash and cash equivalent and term Deposits stood at 2005.51 million as of 31st December 2025. Gross debt has marginally increased from INR 546 million as of 31st March 25th to INR 583 million as of 31st December 2025. With this I would like to hand it back to the moderator and open up for question and answer session.
Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star in one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assemble. We take the first question from the line of Anmol Garg from Dam Capital Advisors limited Over to you sir.
Anmol Garg
Yeah, thanks for the opportunity and congrats on good performance in the air segment. So my first question is on the air segment itself. Wanted to understand that, you know we have seen very strong growth in the. Air segment despite the impact of Indigo. And weaker seasonality on the corporate travel side. So what has led to this? Have we increased our focus on the B2C side of the business, particularly on. The air side of things?
Dhruv Shringi
Thank you for that question Anmol. So in terms of our air business we’ve seen growth both across B2C and on the corporate side. On the corporate side it’s more a question of new customer additions which have been done and there is volume benefit which is accruing from the new customer adds that have happened. And this is on account of the pipeline that we are carrying forward from the previous quarters. In terms of B2C there is some tech innovation work that we’ve been working towards which is helping us drive demand with positive unit economics. You would recall that on the B2C side our key focus shifted from just driving volume to to driving profitable growth.
And there some of the tech interventions that we’ve been doing over the course of the last now six, nine months for the last two quarters now have begun to bear results and bear fruits. And on the back of that we think we can continue to sustain growth in the air segment with profitable unit economics on the B2C side as well. So we are today in a very healthy situation where both B2C and B2B are driving growth for us in a very, very healthy and profitable manner.
Anmol Garg
Sure, Dhruv, if you can within this only if you can also highlight some of the tech innovations that we have done on the air side of things. And also during our opening remarks we had indicated that our focus has increased towards tapping onto the partnership and affiliates for demand generation. Is it particularly on the air side of things and if you can indicate. Which are some of these partners
Dhruv Shringi
sure. So in terms of some of the tech innovations that we’ve been working on, these have been focused around driving better conversion and providing more upsell opportunities to customers. So whether it’s more effective ways of selling seat, meal, baggage and other add ons, whether it’s branded fares and then introduction of NDC fares, the objective of all of this is to drive up the revenue per customer. As the revenue per customer goes up, it creates more headroom for us to be more proactive on customer acquisition. So there are multiple layers led by driving up revenue per customer through things like optimizing conversion and driving more cross sell and then from there deploying some part of that judicialist judiciously in terms of customer acquisition.
On the affiliate side, you know we’ve had our affiliate partners, especially on the hotel front, driving strong growth for us. You would recall we have one of the strongest inventories of domestic hotels in India and we have a wide spread of customers on the domestic hotel side who are sourcing inventory from Yatra. So we are beginning to monetize the inventory to capabilities that we’ve built over the course of the last decade.
Anmol Garg
Understood? Understood. Understood. Okay. Secondly, a question to Siddharth. Siddharth, what is your strategy for the business? If any newer initiatives that we are planning to do, any newer products that we are planning to launch or in. Or is there any particular area that we want to increase our focus towards? Your thoughts would be helpful.
Siddhartha Gupta
So Anul, thank you so much for that question. So I think I shared larger directions towards where Yatra is going to move. If you can see on the corporate front our solutions are really resonating with our customer. But beyond that we are looking for opportunities to built for gaps which were there. For example, our expense management solution that we have added, it actually completes the bouquet of offering that corporate needs to run their travel and related expenses, budgeting and planning and execution on that. So I think that has been a great addition. We are looking for and working towards more such areas where we could add more value for our customers.
And you would hear more on how the LLM based what is going to cut down on efficiency. Like it will improve efficiencies across the way we deliver more value to our corporate. So I think you’ll hear a lot about stabilizing the platform, adding more features, giving more real time dashboards. You’ll hear more about end to end automation of the entire value proposition from Yatra going forward. And we use a lot of capabilities that Dr. Shakti’s team who heads our AI initiative he’s adding more and more capabilities to the bot that front ends many a times for most of our corporate customers needs.
So we are kind of creating an end to end solution portfolio for our customers on the B2C front. Just to add to what Drew said, we’ve done a massive tech refresh to overall improve the organic demand that comes to Yalta. Beyond that, we’ve worked very hard on maturing the platform end to end so that we can have more and better API based integrations with our partners so that we are able to render very, very good and optimized supply to them so that they give us more demand. So I think on both fronts the tech team has been really, really active over the last six months trying to deliver as much as possible so that we keep our nose ahead of the competition.
Dhruv Shringi
Just adding a bit more to that, I think. Anmol while Siddharth is being a bit modest on his capabilities, he’s also come in and he’s helped put more structure around our sales team adding to the sales team defining the inside sales process much more sharply. So I think on the basis of that we will see our corporate business growth also accelerate. On the initiatives that Siddharth and the team are now taking. From a corporate demand generation point of view, I think that’s going to be another area which you will see in the near term more momentum on.
Anmol Garg
Sure. Thanks for this. So going ahead, could we expect that the corporate side of the business will grow faster with the sales initiatives that we are taking and increasing larger focus. In that part of the business.
Siddhartha Gupta
So Anmol, just to qualify that, as I said, we have sharpened our go to market. It would have three pillars. One, Yatra has the largest B2E business coming from very large corporates. So there is an existing account base of very large customers. There’s a team which is going to focus on ensuring that we do renewals, we do upsells and we do more business there. So year on year we are seeing our business grow there. On the other two pillars of the go to market, one is our small and medium enterprise business has been set newly about six months back.
We have a new sales leader there and we have set an inside sales team to work very closely with them to to add to the demand generation activities that were going on. And the third pillar is our elite sales team which manages to bring very large customers in every quarter. So it’s a three pronged pillar go to market. One existing accounts. Second is large enterprise and third is small and medium enterprise. And all Three are today firing on all cylinders. We have seen a lot of new leads and new conversions into our CRM and the pipe is looking very, very healthy.
So you can expect that going forward in couple of quarters you will see an increase in conversion and faster growth in the B2E space. And that has been aligned to our larger strategy as well.
Anmol Garg
Understood, Understood. Thanks. Thanks for this. I get back in the queue and good luck for future.
Siddhartha Gupta
Thank you.
Dhruv Shringi
Thank you.
operator
Thank you. We take the next question from the line of Keshav Sudeka from Nivaschai. Please proceed.
Unidentified Participant
Yeah, congrats on the good set of numbers. I have a question on the expense management solution. So if you could, you know you mentioned that you have added 18 clients for that platform. If you could share some early metrics, the number of pilot fly and the. Conversion rate and what could be the average deal size that you are seeing and you can guide, I guess you can expect some meaningful revenue coming from FY27.
Dhruv Shringi
Sure. So in terms of the expense management solution, our focus is two pronged on this. One, to use this as a retention tool and two, to use this as a tool where we are able to get a foot in the door in customers who typically might not have been Yatra corporate travel customers. So the pricing strategy that we’ve adopted for the time being on expense is more of a price led approach to acquire customers and enable greater retention. Our expectation and the feedback on the product is exceptional at this point of time. The feedback we have from some of the large customers that we pitched it to, they are clearly of the view that there aren’t too many solutions both locally or internationally which are demonstrating this degree of capability.
So we think in FY27 we will add between 5 to 7 crores of revenue from here. The reason the revenue number at this point is not very large because the focus as I said, is more on getting the initial spread of customers going. Once we have that spread in place, we will see acceleration of revenue from there on. But for FY27 at least we would expect revenue to still be more muted but customer adoption to scale up immensely.
Siddhartha Gupta
Just to add to Boo’s comments, I think expense management solution we were more in a product market fitment chase in the early part of this year. Q3 performance and adding eight new customers and new customers altogether, these are not our existing customers. So eight new customers looking at the. Product and. Evaluating us against what’s there in the market and choosing us is a great validation that the product market fit has been established. And from now here on we’ll be working very aggressively towards giving shape to what kind of revenue we can earn from this, this line of business. But it complements, it complements our corporate strategy very beautifully because now we will take this product into our existing account base and that’s where the upsell magic would happen.
Unidentified Participant
Sure. Thank you for the detail. And on the corporate card platform like as we mentioned last quarter that you know, late 20s, so like how are you doing like this. Has there been any meaningful uptick in. The adoption this quarter?
Dhruv Shringi
The corporate online adoption continues to gain momentum. It’s now trending at upwards of 70% of transactions being done directly by the corporate customers. So that is on a positive momentum, right? There is no, I don’t think that trend is going to slow down at any point. That’s more of a just a universal macro shift that we are seeing in India from a first principle point of view where customers want to digitize business processes. So we don’t see that changing at all. That trajectory of more and more customers moving online will continue to happen.
Unidentified Participant
Sorry sir, my question was on the corporate card platform.
Dhruv Shringi
Sorry, corporate card. On the corporate card it’s still relatively early days on the card platform. We’ve had I think one incremental customer that’s moved on the card platform at this point of time. But that is still more gradual in nature. And this also got compounded by the fact that during the last quarter we had amalgamation of our entities which needed new contracts to be signed, new billings to be moved from one entity to another for corporate customers. So from a card platform adoption point of view that wasn’t really the focus. The focus was on making sure that these administrative and operational issues got addressed as part of the amalgamation.
But going forward for sure, card platform adoption remains a key criteria for us.
Unidentified Participant
Got it. So I’ll come back in with you. Thank you so much.
Dhruv Shringi
Sure, thank you.
operator
Thank you. We take the next question from the line of Biplab Dabarma from Antec stock broking. Please proceed.
Biplab Debbarma
Good morning everyone and congratulations on the continued good performance. So three questions. One is on the AI related things you have explained well but just, you know recently there was a lot of new news and noise on AI how it is impacting SaaS, you know, so just wondering what would be, is there, is there any real threat of AI that would. Real threat of AI on OTA business? That is a question number one. Question number two is step up on the U. S structure collapsing. Where are we now? And. Yeah, and the third question is on the how Is the momentum in January in business? How’s the business in January? And do you, do you think we’ll be able to meet our guidance or the same business momentum that we have seen in the last three, four quarters in fourth quarter also? So these are my three questions.
Dhruv Shringi
Sure. Thank you for those biplup. I’ll address the first two and then request SID to comment on the Jan quarter. So in terms of the AI, you know, there are two parts to this that we look at for us, we look at AI as a great opportunity for us to be able to deliver to our customers a much more seamless and uniform experience and also be able to personalize the kind of service delivery that we are doing to our corporate customers. We don’t see AI as a risk from a corporate platform point of view. On the corporate platform we think we are today very well entrenched and as the market leader, we have an opportunity to adopt AI to a greater extent and use that to further differentiate our services versus our offline peers.
So there I see it as a great enabler and something which will allow us to be able to deliver even better service and win even more customers going forward. So I think that is a great positive for us. And similarly on the customer servicing side as well, the work that Our team under Dr. Shakti Goyal has been doing is yielding great positive results on the optimization of our, you know, the workforce and how we can utilize our workforce better from a customer servicing standpoint as well. So those are big net positives for us on the corporate side.
On the B2C side, our focus is on seeing how do we partner better with the AI platforms. In a way, what’s happening is the shift in demand generation is happening away from platforms like Google onto the chatbots now. Right. So our focus is on seeing how do we become the preferred partner for these bots. And given that B2C is not really the core focus area, it allows us to be more aggressive versus someone who’s been investing a lot of dollars in terms of building brands for direct customer acquisition. So it plays into our hands when it comes to the AI proposition.
Siddhartha Gupta
Maybe I’ll just add to Dhruv’s commentary. Yasra over the last two decades has humongous amount of travel memory for both our consumers as well as our corporate customers. And one of the key focus for us is how we can use AI to create an institutional memory for each traveler. And I think that those are the kind of projects which will help us connect better with our customers both on the consumer side as well as corporate side, and those initiatives would start making us more meaningful for our customers and hence increase conversions on our platform. That’s one which cuts across B2C and B2B.
But I completely concur with what Dhruv said. On the consumer side, we want to take a leap beyond just working on SEO optimizations and trying to get more traffic through the Google ways of doing things. Now with chatbots playing a part, we are working fairly hard on ensuring that our tech architecture responds better and we get better demand coming from that side. So I think on both fronts we are working fairly hard.
Dhruv Shringi
In terms of the US collapse which was your second question diploma. We continue to work on that. It remains a key priority for our US shareholder base for us to be able to collapse the structure and simplify the holding structure. Beyond that, I think at this point. Of time we can’t really state much. But this is all I can say. It continues to remain a key priority for us and we are all working tirelessly on it. In terms of January trends, Siddharth can maybe elaborate a bit more on the. January
Siddhartha Gupta
maybe before we dump a quarter. It’s good to see where we stand as of now. So just to refresh everyone’s memory, we’ve given a revised guidance of about 22% growth on revenue, less service cost and around 37.5% growth on the I just said EBITDA could be market as of last quarter end very happy to report that. You know we’ve so you know that revised guidance would have expected us to do about 4.7to8 million rupees overall on RLSE and 917 million on adjusted EBITDA today at quarter end Q3 and we stand at about 78% achievement on the RLSE already and we stand at about 82% achievement on the adjusted EBITDA.
So I think we’ve had a phenomenal nine months in this year, in this financial year and that leaves us with a target for Q4 which is fairly moderate and hence we believe we are firmly on track to deliver our revised guidance that we gave at the end of H1. That should hint to you what the next year is going to look like. I think on a B2C as well as on a B2E front. We believe that consumer travel demand is not cyclical anymore. Now it’s part and parcel of everyone’s life. So you know, I think new year resolutions and along with that people now plan how much they will travel across the year across 12 months.
So I think that demand is not slowing down at all and we intend to benefit benefit from it. On the B2B front, with Indian economy being the fastest growing economy with so many investments coming into the country, especially across manufacturing and gcc, we expect corporate demand to be up next year as well and hence fairly confident that we will have growth trending the way it has been trending this year. So don’t have an exact Q1 guidance right now, but overall things look trending positive.
Dhruv Shringi
Yeah. So on that we remain firmly on track to achieve our guidance. I don’t think there’s anything which has transpired in the last 45 days post quarter end which would make us think otherwise.
Biplab Debbarma
Okay, that’s great. Thank you. And all the best.
Dhruv Shringi
Thank you.
operator
Thank you. Before we proceed with the next question, participants, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. We take the next question from the line of Vivek Desai from investech India. Please proceed. I would request Mr. Vivek to unmute and then speak. Till then we’ll proceed with the next participant. We take. The next question is from the line of Hardik Doshi from White Whale. Please proceed.
Hardik Doshi
Yeah, hi, thanks for taking the question. Just continuing on conversation about AI, you mentioned that you don’t see AI as a threat on the corporate side. Can you elaborate a bit more, you know, just from the context of how, you know, you would have seen in the last 30 days how anthropic and its update has kind of created a lot of turmoil globally. The capabilities of them of these companies are like expanding way beyond where, you know, software companies are under threat, SaaS companies are under threat and a lot of enterprises could potentially create these solutions on their own.
So just want to understand from that context.
Dhruv Shringi
Sure. I think that’s an excellent question just in terms of how the model is evolving on the corporate travel side. Right. So if we dig a bit deeper on the corporate travel front, you’ll see this is more of a managed service which goes from end to end policy compliance to putting in place the kind of limits that need to be there to integrating within the ERP systems and the HR RMS systems of the organizations to then from there providing working capital credit as well. Now this is a fairly comprehensive solution which is at times tailor made to each organization.
The way cost centers are allocated, the way employee bands are allocated, the way the limits are defined, all of them tends to be fairly unique across organizations. That’s where we feel from a corporate Travel point of view, we don’t see these large organizations customizing to that great an extent. So I understand that on the B2C side, yes, this is where it’s the most standardized solution, the chances of disruption are higher. But given on the corporate side, it’s a fairly comprehensive solution that takes care of multiple facets and provides a one stop shop. I don’t see that being threatened by, let’s say, the AI tools which have evolved, at least in the recent past.
Our take is different. Our take is that these tools offer a great opportunity for us to be able to integrate them in differentiating our servicing, in being able to personalize the kind of experience which we have, in being able to provide predictive models from a pricing standpoint to our corporate customers, in being able to digitize and automate the kind of responses and customer servicing experience for our customers. So we see much more of an upside from these AI tools at this point of time for business travel, as opposed to there being a downside to it.
On the B2C front, I think it’s a slightly different view. The jury is still out on the B2C front, but I would look at corporate and B2C very differently when it comes to AI tools and their impact.
Hardik Doshi
Got it, got it. So then just kind of turn flipping the question, what percentage of corporate travel is offline? And then I guess you expect that to accelerate for the online given that you’ll be able to provide better solutions.
Dhruv Shringi
So if I look at from an India perspective and I’ll do a top down approach on that, from a macro India point of view, less than 20% of what is online, vast majority of India business travel sales continues to be transacted offline. For Yatra, we are at about 70% adoption. We see more of the complex multi city kind of itineraries which remain offline. But the standard point to point has quickly moved online over the last two, three years. So our sense is that from an adoption point of view, we will continue to see improved adoption on the online platform and it will stabilize somewhere between 80, 85%.
It will still be that last leg of 15% where people are traveling. You’re going from Delhi to London to Germany to US and then doing a multi city kind of trip. Those kinds of trips, people will still need a little bit of hand holding and offline support. A bit of it also gets complicated because of the visa requirements that Indians have. And I don’t see that changing at any point in the near future. So I see maybe about 80, 85% being the benchmark from an online adoption point of view and 15% being the offline servicing component.
Siddhartha Gupta
Just to add because there is such a headroom for growth, the adoption of a solution like Yatra brings immediate value for corporate customers because not only they discover prices which are more transparently and they can compare those prices, they also know that their organizational policies, travel policies and boundaries are respected while an employee books. And then the immediate benefit is that employees are booking their own travel knowing that they are fully compliant. So that additional layer which is there in terms of having a travel agent or a travel desk manned by hundreds of people, all of that goes away.
So I think now that consumers are fairly comfortable with booking their personal travel online, adoption of a platform like us is increasing. And I think that’s where going from 70 to 85 looks like a trend that’s going to happen very quickly. Double fold advantage, one that there’s a huge headroom for growth so we can convert more accounts from moving them from offline to online and then within our customer space as well, increasing adoption across for more complex segments that travelers are planning for. And that’s where again our bot plays a role. We’re trying to automate as much complexity as possible so that we get more efficiency out for our customers.
Biplab Debbarma
Okay, thanks so much.
Siddhartha Gupta
Thank you.
operator
Thank you. We take the next question from the line of Chirag from Motilal Oswal Financial Services. Please proceed.
Chirag Karia
Hello, can you hear me?
Unidentified Speaker
Yes, yes.
Chirag Karia
I have just one question. If your US related issue get addressed, then what cost saving and margin expansion possible of the India visa entity Chirag.
Dhruv Shringi
Those costs which are related to the US entity don’t come into the India books. Those cost it at the US Holdco level only. But yes, in terms of management bandwidth and time, that will be a significant saving from a management bandwidth and time point of view. And I think that definitely has a lot of advantage for the company given that it will increase the focus and the bandwidth that Siddharth and I would have on the core operations. But from a pure number perspective, there isn’t really any cost related to that entity that sits in the India books.
There is incremental time and effort that goes in things like SOX compliance, etc. Which would not be needed going forward once that structure cleans out.
Chirag Karia
Okay, thank you.
operator
Thank you. We take the next question from the line of Moksh Ranka from Aurum Capital. Please proceed.
Unidentified Participant
Hello. My questions has been answered. You can move on to the next participant.
operator
Thank you. We take the next question from the line of Vivek Desai from investech India. Please proceed.
Vivek Desai
Yeah, Am I audible?
Dhruv Shringi
Yes, Vivek.
Vivek Desai
Yeah. Hi. So I had two questions. One that in the press release and even on the call you mentioned that almost 300 million worth of revenue has slipped into the subsequent quarters. So is it possible to gauge as to how much will it, how much of that will flow through into Q4? And my second question is pertaining to rationalizing the headcount. So in the last quarter Khan call we had, you had mentioned that you will rationalize the head headcount to the extent of 75 personnel by the end of the financial year with a potential of almost 200 employees by next year.
So where are we on this plan and will it aid our margins going forward? Anything that you can, you know, quantify on that end?
Dhruv Shringi
Yes, sorry, Siddharth, go ahead.
Siddhartha Gupta
So on my slippages, you know, as Dhruv commented earlier as well, you know, this disruption kind of came as a, as a fairly sudden event for the entire industry and especially corporate travelers had planned for some of these groups and these are large groups that need to travel together and a sudden shrinkage in supply kind of put a spanner and it was more perception as well. They thought there was a lot of chaos on Indian airports and hence many people said it’s better to shift these events. So we can’t give you a number right now in terms of how much is coming into Q4, but we are fairly confident that in the range of 70 to 75% of businesses for sure coming in to Q4 only very complicated travels which, where, for which bookings are not available right now because There is organic Q4 demand as well, which is something that we are addressing.
So we are trying to limit the. Slippages to Q1 but we believe 75 to 80% of that entire business should come in Q4 and hence you would see the mice performance go up in the current quarter maybe on the headcount. Dhruv could add, but our thought, and this is something that we’ve been going through, our commitments and our strategy for the company, you have to see it from a perspective where the company is growing at high double digits. So we are a company which is growing at 20%. Our B2E business has a very strong growth quarter on quarter. And hence when you add more customers, you need people.
So we might be delivering more from the same set of folks than adding new headcounts. I think that’s something that maybe Dhruv could elaborate more. But you need to see it from that prism.
Dhruv Shringi
So the way we’ve looked at this. Vivek, and we spoke about this, we. Want to look at optimizing 70 to 75 people, which means we should be able to take on new work with the same headcount. So if you look at our overall headcount number on the corporate ops side, we’ve not seen any increase in our corporate headcount and I don’t see us getting to any incremental corporate headcount either in the near term because of the tools that we’ve implemented from an online adoption point of view and from an automation point of view. So we remain on track to be able to deliver on that and that will see some margin expansion for us.
And on the MICE part as well as Siddharth mentioned, we will see the vast majority of the wise mice part get transacted in the current quarter with some complex itineraries where we are not able to get enough inventory from the airlines getting shifted into the first quarter, but vast majority will come in in the current quarter itself.
Vivek Desai
Got it. Thanks.
Dhruv Shringi
Sure.
operator
Thank you. We take the next question from the line of Sumukh from Coleman Capital. Please proceed.
Sumukh U
Hey Tim, am I audible?
Unidentified Speaker
Yes please. Yeah.
Sumukh U
So my question is on the working capital, so can you please let us know what would be your what’s your working capital days in airlines and in hotels and how is this being funded? Because we see an increment of almost 1.4 crores in your interest cost Q on Q and you guys have a cash of growth to 69 crores in your bank. So just wanted to understand that part.
Dhruv Shringi
Sure. So I’ll give you what the standard working capital model is and then we can talk specifically about what factors led to this increase in cost in the current quarter. And those are more one off in nature. So if you look at our standard working capital cycle, we have on average a 28 day DSO from our customers and we get about effectively seven days of credit from our suppliers. So net 21 days of working capital is what we end up funding in our own corporate business in terms of what has transpired in the current quarter.
And I think Siddharth mentioned in his opening remarks, because of the disruption that happened at the last minute with some MICE groups, there was advance to suppliers which had already been paid off for the groups which were to travel over the next week, two weeks. So that advance remained outstanding with the suppliers because the groups have now gotten deferred into the current quarter. The second factor which impacted working capital was given the amalgamation of our subsidiaries we had some customers who were directly paying Yatra for business. Those had to move the accounts from Yatra for business to Yatra Online limited.
That’s another process which as you can understand with large corporations ends up taking a few weeks time. And that’s the other reason where capital got extended from a deployment point of view. So net net in this quarter we had somewhere between 35 to 40 crores of extra working capital getting deployed which has now started getting released in the months of January and February. So we would see normalization happening on the working capital front before the end of March.
Sumukh U
So normalization is 2821 based working capital. Is it on a only for your B2B business and is it only airline or is it a blended for hotels and airline as well?
Dhruv Shringi
Yeah, so that for the B2B business that is the blended number B2C anyways works on negative working capital.
Sumukh U
Okay, so 30 to 35 to 40 crores was the incremental working capital. So how was this funded? Was it borrowings or was it through the cash that you guys had? What percent?
Dhruv Shringi
See we have cash which is deployed in fixed deposits. So it doesn’t make sense for a short period of time for us to break the fixed deposits. We do have overdraft facilities with the banks and those are what we have dipped into during this period.
Sumukh U
Okay. Okay. Thank you sir. That answered my question.
Dhruv Shringi
Thank you.
Siddhartha Gupta
I think just to add, you need to see it from a perspective of chasing more executional excellence. So hence you know, multiple legal entities are now falling into one. It will help the management run the company more efficiently going forward. We had to bite this bullet. This is something that you know, re registration of the new company me with some of our existing customers is something that we had two times in one of the portals. So I think that’s where it came into Q3. But it’s a one off impact.
Sumukh U
Okay, thank you.
Siddhartha Gupta
Thank you.
operator
Thank you. We take the next question from the line of Anmol Garg from Dam Capital Advisors Ltd. Please proceed.
Anmol Garg
Thanks for the opportunity. Again. I have just one question, Dhruvanjid. We have spoken about leveraging our hotel. APIs. For generating revenue. So on that aspect just wanted to. Understand, are we giving this hotel APIs to. Some of the other OTA players And would this mean that overall our. Gross take rate in the hotel segment. Will come down while the overall net take rate might increase or the overall. Profitability might increase in the segment?
Dhruv Shringi
So Anode, that’s. You know, I think you’ve in A way answered your own question as well and your analysis is spot on. We are seeing very strong traction on the hotel side from our affiliate network as well. Obviously the base is still relatively small and there’s a lot of headroom for growth over there. But the trend from a growth point of view is excellent in that part of the business. It will impact the take rate, maybe adversely, but it will improve the net gross margin pretty significantly because that business comes in with extremely high contribution margin.
So we will continue to see improvement happening in the profitability from that factor as well. And I think for FY27, I think we see that as a meaningful generator of profits for us. So that’s another lever of growth for us going into the next year.
Anmol Garg
But Dhruv, don’t you think that this will kind of increase our competition per se, which will now have access to. Our hotel inventory or so, which, which would be our, you know, key points. Why? Maybe people are coming to Yatra for hotels because certain properties would be available only at Yatra.
Dhruv Shringi
See, on the corporate side, let’s break this again into two parts, into corporate and B2C. Vast majority of our business on the hotel side comes from corporate. On the corporate side we have special rates which we offer to our corporate customers. Those rates are not rates that get further distributed. Those are closed user group rates that we have negotiated for our own corporate customers. The distribution that typically happens will happen to people with whom we don’t have a massive overlap in terms of customer base on the B2C side of things. So this would be foreign players, for example, who are generating inbound demand in.
We are not chasing demand from outside India into India. So that becomes a complementary demand generation mechanism for us rather than something which is competing directly with us. Similarly, we have offline travel agency partners who are sourcing from us. These are again not areas where we are very active in. So there is large enough white space in that sector for us to pick and choose who we partner with where there isn’t any direct impact on our business.
Anmol Garg
Sure, sure. And lastly, do you believe that this could have increase on our working capital side of the business as well?
Dhruv Shringi
No. So here it’s largely, you know, working capital negative or at max, you know, working capital break even. Meaning the payments from the customer are timed with the payment to the supplier. So there isn’t really any working capital pressure that comes on account of this.
Anmol Garg
Sure. That’s it for my end.
Dhruv Shringi
Thank you.
operator
Thank you. We take the next question from the line of Harsh from NV Alpha before that, a reminder to the participants, please limit your questions to two per participation. Please proceed.
Unidentified Participant
Hello? Am I audible?
Unidentified Speaker
Yes, harsh.
Unidentified Participant
Sir, my question was on the B2C part, like 40% of gross bookings was B2C in quarter three, which is around 870. So my question was what percentage of this 870 would be from B2B cross selling site?
Dhruv Shringi
No, this number is directly coming in from the B2C part only.
Unidentified Participant
Okay. Yeah. So. So out of the total B2C gross bookings, 0% is from the cross selling from B2B. Right?
Dhruv Shringi
Yes. The B2B part sits separately within B2B. There is no B2B coming in this. So if your question is more on the personal travel of the employees of the organization.
Unidentified Participant
Right.
Dhruv Shringi
Is that what you were asking?
Unidentified Participant
Yes.
Dhruv Shringi
Okay. So that, you know, sits within our B2B side of things. And if I look at that effectively, right, that is today adding to about, you know, about somewhere in the range of 6 to 7% of our B2B business and will effectively about be about 10 to 12% of our B2C business. But that’s a sector that’s growing or that’s a component which is growing quite strongly. Given that there is very strong value proposition for the employees of the companies that they are servicing to book their personal travel as well on their corporate travel platform.
Unidentified Participant
My second question was on the like, how do you see the gross bookings growth for the next two, three years shaping out?
Dhruv Shringi
We would expect gross booking growth to be in the range of early 20s. The mix of that, as we had alluded to earlier, we would see air growing between 15 and 20 and we would expect hotels to grow upwards of 25. So giving us a weighted average growth rate of around 20 plus percent in terms of gross bookings.
Unidentified Participant
And sir, are we looking at around 1.5% of EBITDA margin as a percent of cross bookings by FY28?
Dhruv Shringi
So we are currently at. Yes, by FY28 we are currently at about 1.1 to 1.2%. That’s where we are trending at the moment. We see strong operating leverage in the business as we’ve demonstrated. So I don’t see a reason for us to not get to that in FY28.
Unidentified Participant
Got it. And sir, my last question would be due to these disruptions which happened in Q3 of 480,480,000,000 impact on the air passenger side, this was the impact on the net revenue or on the gross bookings.
Dhruv Shringi
This is on the gross booking.
Unidentified Participant
So what would be the impact on. The net in your revenue service cost?
Dhruv Shringi
The 1% of that would be the impact.
Unidentified Participant
Okay. That’S it from us. Thank you, sir.
Dhruv Shringi
Thank you.
operator
Thank you. We take the next question from the line of Harish Singh from Shub Lab Research Private Limited. Please proceed.
Unidentified Participant
Hi, greetings. This is Pratik from Shublab Research. Thank you for the opportunity. I have my first question on the B2E and the B2C rather B2B in the B2C mix. So if we look at the numbers for the past six, seven, eight quarters, I think numbers have gone up from roughly 60% to 68%. I am not taking Q3 in account because that is an abnormal quarter for us. Now this shift from around 60 to 68% when we were so much focused on B2E part, and probably in most of the quarters, we have alluded that the retail is showing some degrowth also or rather some conscious degrowth which we have taken.
Now if I say that this mix change is slow, is that statement correct or am I missing something here? Because when we shifted the business model to B2E, in my opinion this shift, the pace is quite slow. If you can throw some light there.
Dhruv Shringi
See the good thing which. And you know, I look at this, while I understand your point on the mix, I also look at this as a good thing that we today have a situation where all boats are literally rising. Right? That’s the way we should look at this. It’s not one at the expense of the other. Our B2C business, yes, has been through a bit of a transition over the course of the last few quarters and now is at a stage where it’s able to drive growth organically and with profitable unit economics. That’s not to in any way suggest that our focus on our B2E business, on our corporate business is diminishing in areas any manner that focus on the corporate business remains heavily and that’s the key driver.
From a growth point of view, there is a certain amount of base effect which is there today because B2C was quite depressed in the last year, same quarter. So you are seeing some base effect impact of that. But from an organic point of view and from a business strategy point of view, our focus remains Squarely on the B2E side of things. Right? So corporate is where we have pivoted our business and that will continue to be the focus area. B2C, given the competitive landscapes, will go through its own ebbs and flows, but we will not compromise on profitability when it comes to the B2C business.
Siddhartha Gupta
I think just to add to Dhruv’s commentary, I think we referred to B2C. The headlines for the B2C business was that we, you know, we’ve turned the corner around. You know, instead of diminishing growth, now we have added to and have grown the business while keeping the net contribution margin positive. So I think that is what is the impact you see. That doesn’t take away from the fact that, you know, our pivot towards B2E has been strong and I think both the businesses have benefited from a bit of a tailwind on the travel demand front across.
But just to qualify that, we are no way saying that we don’t want to do B2C business. If it’s a positive contribution business and growing, then it will ride on Yatra’s two decades of relationships, brand and our supplier strength actually. So I think that’s what you see. But we are sticking to our B2E growth plans as well.
Unidentified Participant
Understood. No, this is helpful. Just that group, you know, every quarter we have been adding probably large enterprise clients and yet this number was a little subdued in my opinion. So that is why I asked. But I’m, I, I understand your point that it will certainly grow, but probably at this pace only. So that 75, 25 target probably which you have given to which you have given will be achieved gradually, not in one shot.
Dhruv Shringi
And I think just to also elaborate on that, the reason why you see this being a bit more subdued in this quarter is if you look at the month of December for corporate travel, typically what happens.
Unidentified Participant
This quarter? I’m entirely excluding.
Dhruv Shringi
Anyways at like 60, you know, almost touching now. 70. 30. Right. I think our number would have been 68, 32, 32 exclude this quarter.
Unidentified Participant
Yeah, yes, yes. No, no, understood under the point taken. Point taken through. My second question is on the RLSE growth driver in last seven, eight quarters. So if I closely look at the numbers, probably because of mice business, our gross profit growth grew handsomely particularly after the acquisition of Globetravel because that was primarily into mice segment. Now in lieu of this, you know, I just wanted to ask how do you see the cost structure moving for that particular segment? Because in my limited understanding that is less tech dependent and more people dependent because of customization customized nature of the business.
So that’s the part one, the cost in that segment. Secondly, probably that is also not that roce accretive because that business or that segment demands some capital as it is a bulk business. Multiple bookings at once so if you can help me understand this point in the light of margins and roce both.
Dhruv Shringi
Sure. So firstly on the margins, MICE is a very margin accretive business because from a margin point of view, overall take rate point of view, it’s a product with between 9% to 10% kind of gross take rate which is there. And even though the servicing might still be largely offline while we guys are working on some AI solutions for that, while still the servicing is largely offline, from a net contribution point of view, it’s a business with contribution margins in excess of 50%. So it is fairly margin accretive to that extent. On the working capital cycle, what typically ends up happening in the case of MICE is that you will also get an advance from customer which will range between 50 to 70% of the trip value before the trip departs.
So it is not as working capital intensive as is anticipated to be the case. This quarter was unique to the extent that you know, just before departure or literally you know, a few days before departure, trips got cancelled. So you had a situation where there was a mismatch where an advance has been made to a supplier but the advance from the customer did not come through because the trip did not materialize and got pushed into Jan or Feb as the case might be.
Unidentified Participant
Correct. Correct. This again is very encouraging. I was of the opinion that there’s no advance. I mean the entire money comes after the trip happens. But this is really encouraging to see that this also is backed by advance payments which reduces the working capital requirement. So even in case we scale this further, we’ll have some cost advantages as you said, because you are exploring AI there. And then working capital also will be moderate only. So frankly, very encouraging though. This is. This is very encouraging. Thanks a lot. Always pleasure talking to you. And Siddharth, welcome to Yatra.
Hope to see you soon. Thank you.
Siddhartha Gupta
Thank you.
Dhruv Shringi
Thank you.
operator
Thank you. We take the next question from the line of Suharit from Paladin Capital. Please proceed.
Unidentified Participant
Yeah, hi, just a very quick clarification in the numbers that are put out in the presentation every quarter for new corporate customers that land, let’s say 220odd crore, is that a gross number or a net revenue number?
Dhruv Shringi
That’s the gross number, please.
Unidentified Participant
Okay. So about 6, 7% of that is what would be net, roughly.
Dhruv Shringi
That is right. That is absolutely right. Yes.
Unidentified Participant
Okay, thank you. Thanks.
operator
Thank you. We take the next question from the line of Gunjan Khadra from Nivishai. Please proceed.
Gunjan Kabra
Hi. Dhruv and Siddhartha. Basically Just one question. That we have a very good corporate base now, 1300 plus corporates and adding a lot of customers every quarter. So as per my understanding, a lot of customers are just booking air travel right now and hotel booking is something which, you know, large corporate. Most of the corporates are not doing both the things right now. So wanted to understand that, you know it’s, if we, if the hotel bookings from the existing base also increases a lot, it would be a very good operating leverage that should come into our system.
So what strategy are we adopting right now? Because that number would be very minimum in terms of percentage of corporates using both the services. So what strategy are we adopting to increase that number?
Dhruv Shringi
Sure. So Bhunjan, maybe I’ll give you a bit of color and then Siddharth will add to that. I mean that’s been one of the core focus areas for us over the course of the last two years. There is an initial amount of inertia that you face from organizations because you’ve got their own procurement teams who have close relationships with hotels which have been built over the years and based on that they are a bit reluctant to move. So one of the big changes that we made in our system and we retooled our entire platform was to open out corporate rates as well.
So the inertia was broken by bringing in flexibility in our technology platform to incorporate corporate rates as well and retail rates. So now the customers see both their specially negotiated rates plus the rate that we have and we let the best rate win on the back of that retooling that we did about I think 18 to maybe 24 months ago. Now we are seeing strong traction and that’s why you’ve been seeing hotels growing at upwards at 30%. We continue to adopt similar kind of solutions and creative solutions to be able to drive more cross sell.
I think Siddharth can add more color around how we are adding the Cam Kras as well in terms of focusing the company towards that.
Siddhartha Gupta
So I think I was just wanting to highlight said it already that if you look at hotel standalone we’ve actually grown very handsomely at more than 30% year on year. So adoption is increasing and as we mentioned earlier out of our overall hotel revenue a lot comes from B2E so the adoption is really increasing. What you said was, you know, few customers using us only for air is kind of a good news for us because that allows us a huge upsell opportunity. So when I spoke about the three pillars of go to market, the farming team or the Team, which is, we call it the Key Accounts Management team.
Their KRA has a specific target for upsell and getting our customers to use our hotel inventory. And you can visualize a scenario where you are a large corporate and you have got company contracted rates for various hotel chains. Yatra actually absorbs those rates. And when you search for a hotel and a flight, we actually give you both the options. So you will see the company contracted rates and you will see the Yatra contracted rates as well. And you have the flexibility to use whichever is lowest and, and gives you the best deal. So mostly all our customers, especially B2E customers, are coming back and telling us that we want that flexibility to come from Yasra.
If you as an aggregator have better rates available for my employees, I want to pass on that flexibility to them. I think that is where the adoption is improving now. So I think we’ve already established the value proposition of this offering. Now you’ll only see more and more adoption going forward.
Dhruv Shringi
I think another recent initiative that Siddharth. Has led the team with is we. Realized that for a number of our corporate customers, the barrier was that they wanted their employees to pay at the hotel as opposed to prepay. So Siddharth and the team over the course of the last two months have worked out a solution which now enables our corporate customers to also be able to use a pay at hotel facility that we’ve built out along with some of our supply partners. So these are just some examples to give you, Gunjan, an idea that this is a key focus area for us and a lot of our tooling efforts around technology are around how do we break down any barriers.
See, there is, at the end of the day, inertia. There are procurement teams who have been building these relationships with hotels for decades. So breaking that inertia means that at every stage you get a new ask from a customer and then we come up with creative solutions to break those barriers down.
Siddhartha Gupta
I think the market’s appreciating the fact that Yatsa has one of the deepest inventories of hotels with I think more than 25 to 30,000 active hotels which we manage, which give us business every year. And the total universe of relationship is nearly 90,000. So I think, you know, that’s what’s giving us the tailwind around getting more of our customers moving on to our hotel supply.
Gunjan Kabra
Got it. And for corporates, international presence is also, if we have an international presence is also very important. And it would also help in onboarding larger size corporates also. So how are we Planning on that side. And if we go international like in GCC or you know, Asian country that you were mentioning also in one of the calls. So will that also the gross take rate basically improve then the domestic rate when we go to the international markets also?
Dhruv Shringi
Yeah, Subhanjan, that remains, you know, an important opportunity for us to explore going forward. We do want to become, at least in the first step, a regional player. Over the course of the next couple of years we continue to evaluate opportunities in the region which will help us build out a network and that network then enables us to pitch for larger businesses. So that remains one of the key focus areas for us.
Siddhartha Gupta
Over the last three to four months we have significantly invested in our back end capability to absorb supply from various partners. I think that’s something that you should keep your eyes open for. We will be announcing more of such partnerships which will add to our supply base for international.
Gunjan Kabra
Got it, Got it. Thank you so much and good luck to the team, both of you and the team of Yasir.
Unidentified Speaker
Thank you.
operator
Thank you. We take the next question from the line of Funko Agarwal from Surge Capital. Please proceed.
Ankush Agrawal
Yeah, hi. Thank you for taking my question. So firstly, I think few quarters back. I think when we were around 21%. Sort of margins, the commentary was that in 22 economics will move that to say 25% and then less than three years it would be near 30. Since then obviously the margins have sort of tapered off. Obviously there’s some sort of seasonality over there in last six months. But directionally are we on, still on the path to achieve those sort of.
Dhruv Shringi
Yeah. So if you look at, you know, this quarter because of these two one off events which happened, which is one, the deferment of the mice, which is a highly profitable segment for us, and secondly, absorbing some incremental costs related to the cancellations that happened on the B2C side, we’ve seen margin taper off a bit into close to about 19% at the moment. That trend that we spoke about remains the same. Right. So we don’t see any change in that trend happening and we expect that this margin decline which happened in the current quarter will correct itself in the coming quarters.
So we don’t see any change impacting those margin trends.
Siddhartha Gupta
I think just to add, you’ve seen air and hotel margins both trending, right? I think this quarter was more about the mice moving from one quarter to another, not canceling but moving from one quarter to another. So I think that’s what kind of tapered it for the Quarter. Otherwise we would have had a bumper number to share with you in Q3.
Ankush Agrawal
Got it. Secondly, just a clarification from what was. Earlier being discussed about mice business. So you mentioned that the gross stage rate is around 9 to 10% and. We have contribution margin north of 50%. So when you mean by contribution margin, this is similar to EBITDA or like. What does that come about?
Dhruv Shringi
This would be taking out all direct cost. So EBITDA would mean that there would be allocation of carbon cost and all which will also come into the picture. But this is taking out direct cost. Related to that business. So contribution would be 50. EBITDA would be, you know, I think almost late 20s, 30.
Ankush Agrawal
Okay. But just to understand the ladder, at an EBITDA level, mice would be the highest margin business, then hotels and then. Right.
Dhruv Shringi
That is absolutely right. Yes. Yeah,
Ankush Agrawal
that was it. Thank you.
Dhruv Shringi
Thank you.
operator
Thank you. We take the next question from the line of Sonal from President Capital. Please proceed.
Unidentified Participant
Hi, this is Fumal Minhas. Thanks for taking my question. I had two, three questions. First of all, clarificatory question, when you were talking about implementation of your AI tools with the corporates and making it more personalized, just want to understand, do you have access to the data and the booking patterns of employees work for Page. Just trying to understand that for your intelligence to be better than, let’s say.
Dhruv Shringi
Yeah, I think, you know, we’ve got one of the richest bases from a data point of view today when it comes to corporate travel. We would have, you know, details around what level the employees are at, what are their current spend patterns, what are their preferred programs, like hotel programs or air mileage programs that they are members of, you know, other details around their preferences. So there is a lot of data which is available with us when it comes to corporate travel.
Siddhartha Gupta
So you want to visualize a booking engine which is integrated with the HRMS system of the customer. So we know which employee at what level is allowed, what category of hotel, and what kind of air ticket needs to be booked for them in terms of class, all of that data. And then we also have the past data of where the person has traveled and what their preferences are. So when we dish out the supplier, when they look for something on Yatra, we give them whatever is the cheapest, whatever is compliant, as well as what their preferred air and hotel combinations are.
And that helps us be more relevant to their environment. So that’s broadly the solution. And hence we have the data to train the LLM to be more personalized for our customers.
Unidentified Participant
Got it. Thanks for explaining that. Second question, quick one on return on Capital Employee, if you were to just analyze your numbers for this nine month, I think we’re looking at roughly 60, 65 cr of whatever annualized EBIT. And then so your ROCE is inching up from 5% last year to 6, 7% this year. Is there a target for next year? Because I think you do talk about growth numbers, you do talk about margin numbers, but is there a target for Rosie for next year? Because I think the real breakout moment for this business is if the balance sheet starts, remains favored and the top line grows compared to that.
So just wanted to understand that.
Dhruv Shringi
Sure. I think that’s one of the key focus areas for us. Our target for next year would be to get the ROC in double digits. Right. That’s what we are focused on. We see this being a secular trend from an ROCE growth point of view because the incremental ROCE on every corporate customer is extremely high. You know, we are at upwards of 30% ROCE on every incremental customer. So as we continue to build scale, we will just mathematically see our ROCE continue to improve. That is a key focus area for us. Right.
Unidentified Participant
So the gap between 33%, I don’t want to go to the detailed math but basically after that there are corporate overheads and hence the ROC comes down to a low number. And then there’s B2C as well. Is that the way to understand the gap between 33% and 8%?
Dhruv Shringi
Yes. So what will end up happening is that for every incremental customer there is a higher roc. Your fixed cost remains more obviously fixed in nature. So that flows through then to the bottom line. So every year as you continue to add 10 to 20% more business, you’re adding 20% more business which is coming in at like let’s say 30% kind of roce. You will see a weighted average ROCE continue to inch up. That’s why from let’s say 4 odd percent of ROCE last year, we will end up somewhere close to about 7% of ROCE in the current year and we will see a similar kind of improvement in the next year as well.
Unidentified Participant
Understand that. Thanks for explaining. If I can just ask the last question. Your operating expenses for this quarter are a little higher. If you double check, I think the payment gateway charges are also up and I’m talking quarter on quarter. Is there a patent to be, to be right there just to try to get a clarification.
Dhruv Shringi
So the payment gateway had, you know, Some one time effect of the cancellations, which happened at the. On the Indigo side because, you know, as per the guidance from the regulator, we had to refund the full convenience fee as well. So we were left absorbing the payment gateway cost.
Unidentified Participant
Understand that. So the way to understand the OPEX charges is that it should be understand this more as a percentage of your revenue from operations, or we should just assume this will grow at an annual rate of 5, 10%. Yu y from here on. Just trying to build it in our mind.
Dhruv Shringi
Yeah. So if you look at the charges which are there, employee cost will grow mostly in line with inflation, barring any exception where we make some, let’s say, additions from a new team point of view or get into a new business line. Right. So barring that, it will grow at inflation. Other expenses similarly will grow broadly in line with inflation only in terms of payment gateway. Payment gateway growth will be more linked to gross bookings and also to the mix between B2C and B2B. If B2C is growing at a slightly faster pace, payment gateway might increase at a slightly faster click, but payment gateway will be linked more to gross bookings.
Unidentified Participant
Got it. So this is more variable, I presume. Okay, thanks. Thanks for clarifying this. This is from myself. Thank you.
operator
Thank you. We take the next question from the line of Vinay from Hathaway Investments Private Limited. Please proceed.
Vinay Nadkarni
Yeah, hi, Drew. Just two data points. Your doctor downloads in this quarter were how many and however they grown from the quarter prior to this. And what is the MICE contribution as a percentage of your total B2B sale?
Dhruv Shringi
So DIA would not be an incremental download. DIA is definitely integrated within the app itself and within the desktop. So there is no incremental download that a customer needs to do. For dia, it’s something which is now available and accessible to everyone. Yes, for B2B and for B2C. For both of them, DIA would be available.
Vinay Nadkarni
Okay, so B2C also doesn’t need to download.
Dhruv Shringi
No, B2C. If you download the app, then DIA comes pre embedded in it.
Vinay Nadkarni
Okay. Okay, fine. And mice as a contribution.
Dhruv Shringi
So mice. You know, while we don’t call it out separately, you know, if I look at for the quote and this would be a bit of an aberration from a quarter. The way to look at mice, you know, the easiest way to reverse engineer that is to look at service cost because the service cost largely pertains to mice. So if I look at from a service cost point of view, service cost in the current quarter was about 130 crores and mice gross bookings would be, you know, you gross that up for 10% that gives you an approximation of the mice gross bookings.
Vinay Nadkarni
Okay, okay. And one, just one point on this digital data personal data protection rule. You have so much of customer data with you. How are you looking at complying with this? Is it going to be. Will you. Be ending up losing some customers because of this?
Dhruv Shringi
You know, I’ll add and then Sid can also elaborate on that. So DPDP is obviously an evolving system. Working sourcing with our corporate customers. But just to be clear, on the corporate side the data is heavily and it’s all post consent. So there is no data that on the corporate side we end up storing. Which is without consent from the corporate customers. On the B2C side, you know, their data that we stored is fairly minimal. It’s more trust transactional as opposed to any personal data of a customer that you end up stolen.
Vinay Nadkarni
Not much of an impact.
Dhruv Shringi
No, not much of an impact.
Siddhartha Gupta
So from a compliance standpoint, since we work with some of the largest companies in the world, we have invested quite a bit in ensuring that we comply to the global privacy laws. We have a consulting company on board as well as our CIO is personally leading the project where we have phase one, phase two defined in terms of complying to dpdpa. So it’s an evolution of something that we are already doing and we are fully committed from a resource standpoint to ensure that we are compliant because that’s a very critical part of the differentiator that YADA offers as well compared to other smaller vendors.
Vinay Nadkarni
Thanks. Thanks a lot. Just one last question if I may allow. If I’m allowed.
operator
I would request you to join back the queue.
Vinay Nadkarni
Thank you. No problem. I understand. Thank you.
operator
Thank you. Participants are reminded to you please limit your questions to two per participants. We take the next question from the line of name Patel from Bastion Research. Please proceed.
Naeem Patel
Hi. Thank you for this opportunity. So I had a couple of questions regarding our working capital. I know you in the call you had said that we have disabled is around 21 to 28 days. But I wanted to understand from the payable side that we had around 277 crores of payables in FY25 and I wanted to understand towards whom are these payables O that is Airlines or hotels. Some more clarity on that. And on the on the same front, what should we view them as a percentage, gross booking value, RLSE or revenue? So that’s the first question for me.
Dhruv Shringi
Sure. So the payables are linked firstly, you know, just simply to the gross bookings and not to rlse. That’s the the simpler question and clarification in terms of we are on the amount. These are amounts which are due typically to airlines, especially the international airlines and airlines which form a part of the BSP cycle, which is a banking settlement plan that some of the airlines are a part of. So this would be payable to them and it would be payable to hotels for future bookings. And then there might be some GNA suppliers as well. But vastly, it will pertain to air and hotel suppliers.
Naeem Patel
Yeah, thank you. Understood. And a second. So from, from an independent research, I found that there are like 2.4 lakhs hotels in India and out of which one third are branded and remaining are unbranded. And Yatra itself, I think has around 80,000 hotels in its inventory. Of course, it’s not possible to capture all of them, but what is our ceiling on that, that we can get on our platform, the number of hotels in India?
Dhruv Shringi
So see, the issue with hotels is not to get them on the platform. Right. You know, that’s an easier one to solve for. The issue which is there is that you also need to have the right demand generation engine for those hotels. It’s no point for us to go to Dharam Chalas and smaller hotels, which are like 500,000 rupees, where our demand is coming in from corporate customers who are looking for a slightly better quality product. Hence today, the kind of platform that we have and the kind of inventory that we’ve onboarded is sufficient from our perspective for the nature of business that we are doing.
If the nature of business continues to evolve and we get into a stage where we are going deeper into tier 2, tier 3 markets, and we are now looking at SME customers who need those kinds of hotels. We will start onboarding them. But for the time being, I think we are sort of
Siddhartha Gupta
maybe just to. Add there to Dhruv’s commentary. In a year, what we’ve seen about 75 to 80% of our overall revenue coming from 25,000 active hotels who have contracts with us. So that kind of should give you a view to what percentage of the total inventory on our platform is actively trading with us and getting served to our customers. Customers. But we are adding a lot of. Chains, we are adding a lot of towns and tiers as well. Because now Yatra has made inroads into, you know, pharma and cements and other industries where there is a Lot of corporate travel. That happens to smaller towns as well. So we are beefing up quality supply there.
Naeem Patel
Understood. And if I could squeeze another question or other operating income is like 11 to 12 of our RLSC and if I take it out of our PBT along with other income, our PBT becomes negative so on. I want to understand what expenses are we incurring on the other operating front and how, how does it, how do we view on the pbt if I take both it and other income out, we are still on negative on that front. So some more clarity.
Dhruv Shringi
That would not be correct. You know, other income is about 4.7 crores in the current quarter.
Naeem Patel
Yeah,
Dhruv Shringi
right. Whereas PBT is 8.3. And if I look at, you know, let’s say the last quarter, our, you know, PBT would have been in the range of about 17 crores and other income was about 5 crores. So it’s definitely not the case where other income is what’s driving profitability. There are two components to look at out here. I hope you’re not looking at other revenue. Other revenue will be things like advertisement income, platform income, which are core operating incomes for us.
Naeem Patel
Yeah. So on that aspect itself, that if I take away both other operating income as well as other income, the core business of our ticketing and hotel and packaging. So if I take away those incomes from us and we are PBT negative, so is our core income profitable at TBT level? So that’s what I’m trying to do.
Dhruv Shringi
Yeah. When you look at other income. Right. And I’m now not talking, I’m talking about other operating income. Other operating income is core earnings of the company. So if I Look at the B2C business, for example, advertisement revenue that you generate on the B2C platform is an integral part of your earnings. If I look at, you know, the other components in that, which will be things like, you know, gift vouchers, contribution from partners, those are banks, those are critical components of B2C earnings. So you can’t exclude those. Those are, you know, that’s how B2C platforms work.
It’s like saying on Zomato, you exclude the platform fee which is there, and then assess the profitability. Those are core of, you know, components. That’s how all B2C platforms would work.
Naeem Patel
Yeah, sure. That helps just one clarity on that, that how does that trickle down up to the EBITDA level? So like we had around 16 crores in Q3, so does that flow completely at EBITDA level or do we still incur Some expenses for advertisement from the. Yeah,
Dhruv Shringi
yeah. So there would be some expenses related to that which will be there. But yes, you know, these would be things which will have a higher contribution margin compared to other things.
Naeem Patel
Could you quantify that in a broad range, if possible?
Dhruv Shringi
So approximately, you know, this would have upwards of, you know, almost 55, 60% kind of contribution margin.
Naeem Patel
Oh, got it, got it. Thank. Thank you very much. That’s all from my time. That was very helpful.
operator
Thank you. We take the next question from the line of Rajit Agarwal from Nilkeri Investment Managers. Please proceed.
Rajit Aggarwal
Hello. Thank you for taking my question. A quick one. On the expense management offering, there are established players who are offering a wide range of expense management platform which have a lot more to offer to a customer. Pure play travel expense. So wouldn’t it be better to tie up with them and, you know, instead of incurring expense on a pure play travel expense platform.
Siddhartha Gupta
So we evaluated, you know, so before taking up any project, you know, there is a very thorough review mechanism wherein we look at first of all whether that particular product could be in the periphery of what we offer as a core offering from Yatra and then post that, we look at what’s available in the market versus whether it’s meeting our customers requirements or not. And you would see that in the expense space, either there are global players who are too expensive for extensive adoption in India, or there would be older technologies where they’re looking at OCR kind of recognition of bills and things like that, where they don’t.
They’re not LLM based, so they are not able to support multiple languages. So we looked at a gap in the market and we spoke to our customers and they actually very strongly told us to focus on this area because they wanted one partner who could close the entire loop. So again, going back to the entire flow, there is a company, a corporate, they have a particular configuration and a policy. They want a system which would be fully compliant to that. And finally, where the rubber hits the road is where the expense gets booked for the travel.
And that was the last bit that was not available from Yatra itself. So they wanted us to be that partner who closes the loop for them. And they wanted us to do it with the best technology and the latest technology possible. So I think those were the matrices which pushed us to create this product. And this is the first quarter where the full portfolio was available and our sales team took it. And we’ve already converted eight customers in just one quarter. So we are very, very bullish that we will see this getting adopted very quickly in our installed base.
But again, I’ll qualify these eight customers, I think out of them, six of them are new customers. So they’re not existing customers or that gives us more confidence that if you are able to bring in new customers who are not existing yaddler customers, then it’ll be an easier sell for us to take it to our base customers and convert them.
Rajit Aggarwal
Right. That’s great to hear. One question on the top line growth and I’m just trying to link the commentary with the KPIs and you had mentioned that because of the subdued mice demand now one of the leading hotel chains attributed to their good performance to a robust corporate and MICE segment during this quarter. If a hotel chain is saying that, I guess the volumes would have not suffered that much. And even your numbers show good performance in terms of gross air bookings or total hotel room nights. Right now if I look at hotel booking value per night, that has come down and so has your take rate.
So how do I, you know, how do I.
Dhruv Shringi
So maybe I’ll qualify that. MICE actually, if you look at the market dynamics is a very fragmented market. So you know, looking at a commentary of a particular hotel or a hotel chain or a property and trying to, you know, democratize that and try and look at overall trends in the entire sub segment will be a very difficult one. As mentioned in the commentary earlier as well, MICE for each of the organization has a very different mecca for us. MICE is a lot about very large customers of ours who trust us with their travel and hence they also want us to manage critical large group travels for them.
So we would do very large group bookings and there’ll be a nuance of few of those customers maybe pushing their travel out by a quarter and hence that impacting our business. So that’s not a reflection on the total mice industry and what other companies are reporting. I hope that clarifies.
Siddhartha Gupta
Yeah, I think just to add on the margin side on that from a margin point of view, if you see, yes, you’re saying the take rates have come down from 12.2 to 11.7, but our net margin, our gross margin has actually improved from 9.7 to 10.2 and that is on account of the change in business mix. So there is more business compared to let’s say previous quarter, which is coming from the corporate travel side of things, which is maybe reducing the weighted average takes rate because on corporate the take rate tends to be lower than consumer but because the bottom line profitability is Better, it’s leading to higher gross margins.
So effectively for us, that’s a very good change that’s happening in the business.
Rajit Aggarwal
I absolutely agree on that. So that’s exactly what I was trying to get a handle on. See, the volumes have gone up, the margins have gone up, but even then the growth somehow has been lower. And as you said that, you know, the 30 crores or 300 million of revenue would have got postponed if we were to include that in Q3. Then would it be right to say that the upper limit of revenue that could have been achieved is 287 crores? Is that a right way to look at it?
Dhruv Shringi
Yes. Yeah, Yeah. I mean, 290. Right. Is where. Somewhere close to 290 is where we would have been. Yeah.
Rajit Aggarwal
And that would be around 22 to 23% year on year growth. So would you have been satisfied or happy with that?
Dhruv Shringi
So in terms of gross bookings, yes. In terms of margins, it would have been even higher. So if, and this is like a pro forma that we are trying to build out, right? In that kind of pro forma, you would have upwards of 50% growth in EBITDA. You would have like almost 45% growth in terms of patients. So, yes, that would have been obviously a stellar performance. And that’s where we were heading in the months of October and November.
Rajit Aggarwal
Right. All right, sir, thank you and thanks for taking my questions.
Dhruv Shringi
Thank you.
operator
Thank you. Ladies and gentlemen. Due to time constraints, that was the last question for the day and would now like to hand the conference over to the management for closing comments.
Dhruv Shringi
Thank you, operator. And we would. (Ends Abruptly)