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Easy Trip Planners Ltd
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Good evening, ladies and gentlemen. Welcome to the Q4 FY 2023 Earnings Conference Call of EaseMyTrip. Today in this call, we have with us Mr. Prashant Pitti, Co-Founder and Executive Director; Mr. Nishant Pitti, Co-Founder and CEO; Mr. Lokendra Saini, COO; Mr. Ashish Bansal, Chief Financial Officer; Mr. Basavraj Shetty, Head of Investor Relations; and Mr. Rajat Gupta from Investor Relations.
The results for Q4 FY 2023 for the company, the investor presentation and the press release have been uploaded on the stock exchange and on the company website.
Before we start the call, a disclaimer. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Prashant Pitti, Co-Founder and Executive Director. Thank you, and over to you, sir.
Thank you. Thank you. Good evening, ladies, gentlemen, and thank you for joining us on this earnings call to discuss the financial results for the quarter and fiscal year ended 31st March 2023.
Before we deep dive into the numbers and performance, let me present an overview on the current status of industry and some trends to follow. The Indian travel industry has witnessed remarkable growth in FY '23 with the number of passengers increasing by 62% year-on-year to INR 136 million compared to INR 84 million in FY '22.
The number -- the air travel sector has witnessed a particularly strong rebound surpassing pre-COVID levels in quarter 4 of FY '23 by 43% as compared to quarter 4 of FY '19.
Looking ahead, India is poised to become the third largest air passenger market globally, encompassing both domestic and international travel by 2024. As indicated in February 2023, IBEF report, India is expected to host over 480 million air travelers by 2036.
Moreover, Indian carriers are expected to double their fleet capacity, reaching over 1,100 aircraft by 2027. The government has placed significant emphasis on infrastructure development and has envisage increasing the number of operational airports to 220 by 2025 from 131 in 2022.
The Airport Authority of India has outlined an investment plan of INR 25,000 crores over the next 5 years, aimed at enhancing airport facilities and infrastructure.
The concentrated efforts aligning with the increasing demand for travel tourism driven by growing middle-class population with a means to engage in domestic and international tourism.
As a prominent OTA player, EaseMyTrip is well positioned to expand and take advantage of emerging opportunities in the travel industry. We come with a strong track record and very equipped to navigate the evolving landscape by leveraging our expertise to capitalize favorable market conditions.
EaseMyTrip has had an exceptional last year with record-breaking gross booking revenue of INR 8,050.6 crores. The journey of the company and this milestone is reflective of our encouraging growth of 116% increase in GBR in FY '23 from INR 3,715 crores in FY '22.
Despite a seasonally weak quarter, quarter 4 FY '23 has seen sustained growth of 83% Y-o-Y increase reaching to INR 2,142 crores as against INR 1,170 crores for quarter 4 of FY '22, thereby reinforcing our leadership execution capabilities and commitment to value creation.
Further, continuing with the growth momentum, EaseMyTrip has reported 68.6% growth in adjusted revenues to INR 675 crores in FY '23 as against to INR 400 crores in FY '22.
In quarter 4 FY '23, our adjusted revenue was at INR 178 crores, which was 81.1% above Y-o-Y as compared to the corresponding quarters of adjusted revenue of INR 98 crores. We remain bullish in our newly targeted business operations in Dubai, especially that we excited initial response to our operations there.
The business in Dubai continues to thrive, crossing the milestone of INR 100 crores in GBR in the first year of operation itself. In quarter 4 of FY '23 alone, we saw GBR of INR 43.3 crores contributing to the total of INR 118 crores for the full financial year of FY '23.
Our operating leverage continues to be one of the significant success that puts us above our peers. In FY '23, our marketing spend as a percentage of GBR was 1%, which was just slightly above 0.9% of FY '22, reflective that we continue to invest in our brands.
Our employee expenses stood at 0.7 percentage of GBR, which were in the line of FY '22 level, even as we continue to invest in our human capital. In FY '23, our air segment grew by 62.2%, and we sold 1.15 crore air tickets net of cancellation as against 70.9 lakh in FY '22.
In quarter 4 of FY '23, it was up by 56.2% to 32 lakh air tickets. We have witnessed robust demand for the air travel segment and given our customer-centric initiatives, we have performed significantly better than the previous year.
Coming to the hotel segment. We continue to operate our hotel business in a nontraditional way which is the aggregator model, which has given us stable returns in the past. In FY '23, we sold 3.5 lakh hotel nights, an increase of 121% compared to FY '22.
For FY -- for quarter 4 of FY '23, our hotel segment saw an increase of 121% again, Y-o-Y basis as we sold 1 lakh hotel nights as compared to 0.5 lakh for quarter 4 of FY '22. Since our inception, consistent profitability has been the hallmark of the business, and I'm pleased to share that our commitment to financial success remain steadfast.
In lines with the tradition, we have achieved EBITDA of INR 191 crores for FY '23, a 30.2% increase as compared to the previous fiscal year of EBITDA of INR 146.9 crores. Our EBITDA margin were at 41.2% for FY '23 and 38.6% for quarter 4 of FY '23.
We reported PAT of INR 134 crores in FY '23 showing a growth of 26.6% compared to the previous fiscal year of INR 105.9 crores. In quarter 4 of FY '23, our PAT stood at INR 31.1 crores making a 33.1% Y-o-Y increase as compared to the corresponding quarters.
Moving to some operational highlights for the quarter. First, we are honored to have been awarded a title of best online travel portanl in India at a prestigious economic time, [indiscernible] business leaders of the year award this quarter. This iconic reinforces our position as one of the leading players in online travel industry in India.
Second, to celebrate the completion of 2 successful years of going public, we offered our shareholders remarkable deal as a mark of our gratitude. Furthermore, I would like to highlight some other notable milestones achieved by EaseMyTrip during the quarter, which reflects our resolute pursuit to growth, profitability and exceptional service delivery to our valued customers.
As a part of our strategic expansion in Indian market, we have opened up our first franchise store in Patna, Bihar. The physical presence strengthens our ability to serve our customers more efficiently catering to their travel needs, particularly in holiday segment.
In our ongoing endeavor to enhance the customer experiences, we have launched a exclusive program for our elite customers called as EMT Royale. This special invite-only program offers highly personalized and tailored services for flights and hotel booking as well as holiday, chartered services and cruise packages.
EMT Royale exemplifies our promise of providing unparelled travel experiences to our customers [ fostering ] the sense of value and appreciation. Collaboration has always played pivotal role in our success.
In this quarter, we have [ bought ] several strategic partnerships that have fostered our brand presence. We are delighted to continue our relationship with country's most loves sport cricket as we have signed 5-year agreement with the owners of UP Warriorz team in the Women's Premier League.
This collaboration, which commence in the inaugural session of WPL in March '23 allows us to leverage their platform and promote our brand to the wider audience. Additionally, we have also associated -- we have also become an associate sponsor of IBA Women's World Championship 2023, thereby augmenting our grand exposure.
We have recently partnered with Swiggy, India leading on-demand delivery platform for campaign that will enable both brands to tap into each other's consumer base. [indiscernible] collaboration has been paused with HT Digital, facilitating our expansion efforts. We have also established valuable partnership with Chennai Blitz in the trying volleyball league. The Republic Summit and signed an MOU with Andhra Pradesh government. These collaborations has immensely contributed to increasing our brand recall and solidifying our position as preferred choice for all their travel needs among our customers.
With this, I request the moderator to please open up the questions -- call for the question and answers.
[Operator Instructions] The first question is from the line of Pritesh Chheda from Lucky Investment Managers.
I have 3 questions from your P&L and the balance sheet. So in the P&L, there is a -- yes. There is this other expense as a percentage of sales has moved up by 40 basis points, and it's a fairly large jump. If you could explain that?
And in your balance sheet, I was surprised to see that your receivables have shot up a lot and your other financial assets where the entire cash flow of the company has gone. So if you could just give clarifications on these 3 things?
Sure. I will answer the trade receivable part, and I will invite Ashish-ji, who is our CFO, to answer the other 2. The trade receivables have gone up as our share of GMV from B2B business has gone up from 9% to 12%.
Our trade receivables for FY '22 was about INR 52 crores, which has jumped to INR 155 crores. And primarily, it is because of the B2B business, which is why the trade receivables have gone up. Ashish-ji, if you can just answer the other 2 following questions, that will be good.
So just a minute, sir. So if it has gone up by 3%, 3% on a INR 8,000 crores GMV is INR 240 crores. So the INR 240 crore would be throughout the year. But during -- we would have done the business of INR 240 crores throughout the year, but there is a INR 110 crore receivable jump straight in this period.
So the business is floating business, right? And which is why the numbers have gone up because of the corporate business as well. There's a corporate business as well, which has come up. And then there's a B2B business. Both of them have added to this number of about INR 100 crores.
And at the same time, yes -- Ashish, this side. At the same time, our revenue also increased and we received our revenue on a periodical basis from the airline side. So that receivable includes the commissions and PLBs, which we have to recover from the airlines. So since our revenue is increasing, then trade receivable is also increasing.
And another question was other expenses. So other expenses the major increase in -- since our B2B business increased, so our commission payout also comes under other expense. So that is the main reason of increase.
And third thing you are saying about the -- you're talking about other financials assets. This represents basically the FDR -- the long-term FDR. And if you see the current assets, our other financial assets and current assets has been increased. So there is a set of long term and short term in financial results.
Okay. Could you give some more color on the GMV growth that you are planning for the coming year?
See, we would -- as we have said, that we are continuing our efforts to grow our GMV in the higher side of double digits number. As what you have already witnessed in the last year, we have grown it by 116-odd percent. For the corresponding year, we expect our GMV to grow by more than 50%.
The next question is from the line of Pranay Jain from Peel Wealth Securities.
Congratulations, gentlemen, on a strong year, and thank you for the opportunity. One, I wanted to understand what are the efforts that we are taking to expand our business from overseas markets.
I think, earlier this month, we had held a board meeting also to assess some acquisition and inorganic opportunities, domestic as well as overseas. So if you could throw light on the plan and strategy over there with some numbers, if possible?
So sharing any main number would be very difficult at this stage. However, there is a very concentrated efforts going on within the organization to grow our overseas business. The beautiful part about the overseas business is that most of our operations and technology continue to run out of India.
While the average ticket price in overseas business can be up to 3x more than what it is in India. And then the competition is also something which we feel very fair to take on to because there is no other OTA in the world which has sustained without charging convenience fees.
Given all these 3 reasons where at EaseMyTrip, we can afford to not to charge convenience fees and yet be profitable, the average ticket price can go up by 2 to 3x, and the entire operations and technology continue to run off India gives us extreme amount of comfort to grow our businesses overseas.
And there are multiple efforts which the company is envisaging and is working on. One is in the [ format ] of the promotion by basically creating different kind of alliances with the banks, the credit cards, which exist in the foreign land and work along with them so that they can promote, we can give them some additional discounts to their consumer base. And they offer our product, they introduced our product to their consumer base is one of the bigger ones.
And then, of course, we already have grown EaseMyTrip to become the second largest travel portal in India. And we have enough tricks up our sleeves, which we may not be able to disclose right now, which we would want to continue to use to grow in overseas businesses as well.
Directionally, your strategy is appreciated. But let's say, over the next 2 years, say, by FY '25 end, how much contribution would you be aspiring to have from overseas markets?
See, the GMV for Dubai market for this -- for the last particular financial year was about INR 118-odd crores. Given our efforts in all the directions, I would be surprised if it is not the north of INR 700 crores, INR 800 crores from the -- all the newer operational areas overseas areas which we are trading in the next couple of years.
And also, I think we are assessing something on the insurance side. So I'm intrigued to understand what's our thought in terms of [indiscernible] and growing that piece?
So at EaseMyTrip, we have a consumer base of about INR 1.5 crore user base who are the crème de la crème of the country. And we wish to try to see if we could basically offer alternate services to these people. We already are offering them a travel insurance product on our website.
We wish to experiment and see if we can offer them another kind of insurance product as a mediator or as an aggregator in between. But this is something which we want to try and experiment, but I would not be able to share any further details around it.
So that is at a preliminary stage and yet to -- I mean, quite some distance away from reaching advanced actions?
The actions are happening as we speak. Ashish-ji, were you trying to say something?
Yes. The basic -- we have B2B model also. So we want to empower our B2B agent which have a network of customers to sell the insurance through our platform. So we are targeting B2B segment and at little space, B2C also.
Okay. And lastly, before I get back in the queue, what is the kind of revenue and margin that we are looking for, say, over the next couple of years?
I'm particularly interested in margins because there are quite some levers. And I'm sure that we can improve from where we are at present levels because earlier, we've enjoyed higher numbers. So what's the action plan there?
See, this is the beauty of the Internet business. Your cost of operations may not go in the same direction as what your business is doing. And hence, with each passing year, we also expect our margins to get better. I can tell you one particular area where the margins should continue to improve dramatically as we speak, which is basically the payment gateway charges. .
The payment gateway charges for this particular financial is about 0.6%. And as more and more UPI gets percolated within the country, this percentage should continue to diminish, this 0.6% of an expense should continue to diminish.
Also, I believe now we have created a very strong robust team of 1,000 people. And going forward, I do not envisage our employee cost to grow up dramatically as what it has grown in the last couple of years. We have grown from 425 employees to 1,000 employees in the last 2 years.
However, now we feel that the team is extremely -- and this number increase has also happened because of the inorganic acquisitions, which have become our subsidiaries, right? So those numbers are also getting added up into the company.
And however, going forward, we believe that our employee cost, not the marketing cost. Marketing costs will revolve around 0.9 to 1 -- sorry, 0.9% to 1% of the GMV because that is a continued effort to grow. However, the employee cost in the next couple of years should reduce as the business continues to improve. And hence, we are looking forward to enjoy better margins as more and more business continues to come towards these markets.
So as a result of these investments and partnerships, and there are going to be many other moving pieces always. But simply looking at your statement in the presentation, I mean, we are at 41.2% at the close of FY '23 at the EBITDA margin level.
And last year, we were at 58.8%. So how do we narrow this? And I mean, do we have something in mind or a range that we want to see by the end of FY '24, '25? And I'm sure...
Yes. See the last year was a COVID-infected year, and hence, it was an exceptional year. We do not envisage that 58% to come back. That year was an exception year. However, going forward, I believe that a good number to look forward would be above at 45%, 46%.
Okay. And the revenue growth would be similar to this year, you would believe that kind of run rate we will be able to maintain?
So the minimum GMV growth expectation, which we have internally is about 50% for this year.
50%?
50%.
The next question is from the line of Samir Palod from AUM Fund Advisors LLP.
Am I audible?
Yes, you are very clearly audible. Please, go ahead.
Prashant-ji, just like sort of a few macro questions. While if you look over the last few years, the overall take rate, which is the interplay between your take rate as well as discounts to customers is coming down.
How are you seeing that going forward? Because GBR you're projecting to grow at 50%, but is the take rate now stable, likely to come down further because I believe it's down 2.5% in just 1 year, between '22 and '23. So what is going on there, if you can just explain that to us?
See, as I said that FY '22 is not a fair year to compare. In FY '22, starting quarter 4 of FY '22 till the quarter 4 of FY '23, which is 5 last quarters, our adjusted take rate has always been hovering between 8.2% to 8.7%. And I believe that this is a fair assumption to make that this is what the status quo is from going forward. In the last quarter...
The hotel sector which is growing -- sorry, sorry to interrupt. The hotel sector, which is growing much faster than your air, that has a much higher take rate, right, for you?
That's -- see, basically, we give that the whatever amount which we get. Firstly, the amount of the hotel booking is still in single digits. Even though it is growing much faster, the overall impact on the take rate is very minimal. The hotel take rate is about 12% and the air take rate is about 8%.
So hence, I would not quantify that the air take rates are decreasing and the hotel take rate -- just because hotel business is growing, the air take rates have changed significantly -- they have not. They have been hovering anywhere between 8.2% to 8.7%. In the last 5 quarters, you may please look at that.
And we, as a company, believe that this is a fair assumption for the future as well. The hotel is still in the single digit for us. And hence, even though it grew almost -- it almost doubled up in the last 1 year, it is barely making in a dent on overall take rate for the company right now.
And my next question is just on the cost side, can you explain why every single cost line item cost has gone up much more disproportionally than revenue growth? And I'm really talking about more on a yearly basis rather than for the quarter?
I would also like to talk more on the yearly basis. And the way we look business is actually in the format of GMV, not on the basis of revenue because revenues are a function of take rates. And hence, as I said that FY '22 was not a normal year and hence, take rate of FY '22 should not be compared FY '23. FY '23 onwards, the take rates are stable.
And hence, if you look at as a percentage of GBR, they haven't changed much account. For the employee costs, our employee cost as a percentage of GBR is 0.7% for FY '23 and FY '22, exact 0.7%.
Our marketing and promotion cost for FY '22 was 0.9% and for FY '23 is 1%, hasn't changed much, as you think. Our discounts have gone down dramatically for FY '23. For FY '22, it was at 4.4%. And for this particular year, it is at 2.9%.
And even after reducing the discounts dramatically, we have been able to grow our business by more than 100% is something which I would like to give accolades to our entire team, which is that by -- even after using the discounts, we have been -- just imagine if we had continued with the same discount, we would have grown much, much better and faster, but that's not the DNA of the company.
The DNA of the company is to maintain the very fine balance between growth and profitability. And that is what the team is up to and we have reduced our discounts dramatically and yet the profitability has continued to increase. So I would encourage you to look at the cost on the basis of GMV on the basis of total bookings, which we have done, not on the basis of revenues.
Okay. Fair enough. So can we look forward to next year with a 50% growth on the overall GBR, you're saying there will be steady take rates in the 8.5%...
Your assumption is correct.
And on the expense side, then we should see -- and you are talking about higher EBITDA margins. So obviously, they are on the profitability side. It will be faster than the 50% growth rate.
Your assumption is correct.
The next question is from the line of Madhuchanda Dey from MC Pro.
Madhu, I was expecting you.
A couple of questions. One is in the segmental, if you see the total hotel booking in terms of the hotel booking nights, it has shown a sequential improvement.
But if I look at your segmental results, not only is the hotel package revenue down sequentially significantly. In fact, it is showing a segmental loss in the hotel side. So can you explain this to me, please?
I'm not able to understand your question very properly, Madhu. I understand that the hotel...
I will just give you the numbers. See, in terms of the hotel night, Q3 hotel night was something like INR 95,875 and that has crossed INR 100,000 in Q4. But if you look at your segmental reporting, under hotel package, the revenue in Q3 was something like INR 23.7 crores, which is down to INR 5.2 crores...
Yes, yes. That was -- that was because of a MICE movement. There was 1 significant MICE movement, which got reported in the holiday segment -- hotel and holiday segment, which happened, which was a one-off MICE movement in quarter 3. Ashish, please correct me if I'm wrong, but this is what I remember. There was a big reason of -- that is correct, right, Ashish-ji?
Yes, yes.
Yes. So there was a big MICE movement. One particular booking, which brought a lot of revenue to the company in quarter 3 because of which we are seeing that number to go down by this.
And can you explain why is there a kind of a segmental loss in the hotel segment?
Look, there is no loss in...
No, it's a negative figure. So it's a small negative figure.
There is an income -- gross income in hotel segment and if you apportion the cost in revenue, then there is a loss.
So basically, Madhu, as we have mentioned in our previous commentary that right now our endeavor is to grow our hotel business at breakeven pace. And this notional loss, which we are seeing is basically a breakeven for us.
Whatever 12%, 11% or 12%, 13% commissions we are getting, we are passing it back to the consumers in the format of discount. As you already know, that our total team basically is extremely lean team because of our aggregator model. Hence, whatever commissions we get, we pass it back to the customer. And there is barely any other costs to the company, which is why you are seeing a small negative number.
Okay. I have 2 more questions. One is you have done some acquisitions last year, like YoloBus, one in the hotel segment. Can you start putting up the financials at least in your presentation every quarter so that we know what kind of traction you're seeing in those acquisitions?
Your point is noted. And we will consider it.
And if you could throw some light on the performance of this acquisition?
See, Spree Hospitality continues to grow profitably. It is adding almost 5 to 6 hotels on every quarter basis into its [indiscernible]. And it's doing extremely well, and we are extremely proud of the team. They are growing business very well.
YoloBus again, started operations only 6, 7 months ago. We did see 1 particular month where the company was almost at breakeven pace. But then, of course, the company, the YoloBus team desires to expand as the market is extremely, extremely large. We continue to wait it out, wait out for the breakeven part and grow YoloBus operations in North India and South India, both directions.
So hence, for Yolo to break even, we will have to wait it out for some time. However, the market is humongous. And the entire YoloBus team feels extremely excited to grow the company. But I do take your point that we -- we want to consider -- I do take your point. Ashish-ji, please [indiscernible].
And the last question is about the receivables from GoAir, what -- have you provided -- you mustn't have provided that [ INR 6.92 ] crores, which is there in the auditor's report. Have you?
So the GoAir -- for the GoAir, the company has an exposure on the GoAir side, but we are hopeful that they will start their operations. We have received an email from them as well that soon they will start the operations and whatever exposure is there, will get adjusted with the sales as soon as the operations begin, Madhu.
And I mean, assuming the worst, I mean, I'm sure it will not happen. But in case if it doesn't happen, your outstanding receivables from GoAir is INR 6.9 crores. Is that a correct figure?
That is INR 69 crores.
INR 69 crores, I'm so sorry, INR 69 crores is your outstanding receivables from GoAir, right?
That is correct. And it's in the -- the entire industry, of course, has that exposure. Nobody has taken any write-off because we are hopeful that they will come back.
We have received an email, we have received verbal conformations as well. You are also tracking that story of them, we are expecting them to come back. And as they come back, this amount will first get adjusted with the sales, which happens.
The next question is from the line of Kishore Sonekar from POSA Capital.
Yes. If you -- hello?
Yes, please.
Yes. If you see the website of -- it is not very user-friendly like MakeMyTrip. The response time of the -- suppose once we book the ticket the format -- ticket format, which comes, it looks very simple. And the same format when we receive from MakeMyTrip, it looks very different. This is one.
And the second is that while booking hotel, we don't have many options like MakeMyTrip. Whether we are willing to book from EaseMyTrip also, we need to go to sort of MakeMyTrip and book hotels from there. We don't have many options here.
No. As a customer, I do take your feedback. And I can see that you're coming from the sense of improving our services. So I duly take your feedback, and we will work on it. However, I would like to present you some factual information, which might change your mind for the company already.
Firstly, the factual information in terms of number of hotels, which EaseMyTrip has, we report about 2 million hotels which are listed on EaseMyTrip,while our competitor reports about 1.1 million hotels which they list on their platform.
So clearly, we believe that the number of hotels which are purchasable -- I mean, bookable on EaseMyTrip is certainly not less compared to our competitors. However, if you have felt that, we will definitely double check on that part.
And the first point, which you said, which is basically in terms of user friendliness and the response time. On the response time basis, there are multiple, multiple websites, which are out and a label over there, which would give you the statistics on response time. I could name a few, but there are multiple out there, [indiscernible] one of those, and then there are multiple others.
And consistently, we have seen that we outperform in terms of response time compared to all of our competitors. In fact, this is one of the biggest reasons why our organization has grown without any funding without raising any capital. that we have invested a lot of time and energy, not to say to beautify our website, I would take that point that in terms of beautification, we could do better.
But at least in terms of core technology and response time, you may be speaking anecdotically where there might be one of the cases, server might not be responding as fast as they usually do, or your internet speed might not be as high at that moment.
However, if you look at the aggregate level, there are multiple websites out there, which will very clearly, consciously concisely tell you that EaseMyTrip always outperforms in terms of our API calls, in terms of or response time.
Okay. This way -- I may agree with -- but hotels, if you -- I'm not saying the number of hotels if you say, if you go for a Nagpur booking in Marriott, it is not available. If you go to the Kashi or many places, the good hotels, which are star-rated hotels, they are not available. Yes. So this was my experience, I am a regular traveler...
We take your point. All right. Thank you.
The next question is from the line of Gautam, an Individual Investor.
I think some of my questions were already answered earlier. But just one. Any update on the Nutana Airways, the charter flight thing that we have purchased some time back? Has it started its operations? So how is it going? And what's the outlook for that?
The operations are yet to begin in the -- in a way where we would want to present it. It's in the initial phase right now. So there is no update on the Nutana as such.
The next question is from the line of Sajan Joseph, an Individual Investor.
It's lovely to talking to you. Are you able to hear me, again?
Yes, I can hear you very well.
Yes. So I see that the number of employees have increased to 1,000 employees, what percentages are in the IT side of things?
We would have about 120 people in technology.
Okay. It's a quite -- so what about the other -- because previously, in the previous call, you had mentioned that we had a team size of 320 and 70 were in the tech team?
So I was assuming that you -- I assume that you asked the tech team strength earlier it was 70. Now it is 120 people.
120, okay. So the remaining is in the marketing ...
I mean we have call centers, we have marketing, finance, audits, accounting, there are a bunch of the other organizational structures, right?
Okay. And in terms of the Traviate acquisition of ours, can you give us an update, Prashant?
Traviate did not ...
[indiscernible] that it has grown so well.
So Traviate did not culminate. We did not exchange hands with the Traviate. There was something which was missing in the organization because of which we did not complete the transaction. I did update that about 2, 3 quarters before. The YoloBus and Spree, they both were culminated and they both are growing pretty well.
And how many hotels have been managing under Spree? Previously, you had said about 28 hotels.
I may not have the exact number for this particular quarter. Ashish-ji, would you know what that number is for Spree, right now?
Number is around 30 to 35 for [indiscernible] we are managing.
Okay. The other question was around the Patna store. Is this the first physical store that you are presenting? And what is your advantage of such a store?
So even currently, even till today, almost 90% of all holiday bookings are happening offline. And which is because in an air ticket, there aren't multiple touch points. There aren't multiple questions which you want to ask.
But in holiday, there could be 100-plus questions which you want to be answered, which is why even till today, most of the holidays are actually being sold offline by the travel agents. And in order to grow our holiday business, we already have very strong pipeline related to the leads, which we generate in our website. The endeavor is to basically pass those leads to the franchisees and help them grow the business.
In Patna, we had our inaugural month this time. And in the month itself, we did about INR 20 lakh to INR 25 lakh worth of bookings from that particular center. So we expect this particular line of business to expand quite dramatically. The margins in holiday which we enjoy are much, much better. And holiday as a product requires you to service where you can sit across somebody and cross verify multiple questions and answers and then be able to book your package.
So we would use our strength of B2B business, which was the main business for EaseMyTrip years ago. We would use that strength -- we would tap our travel agent network and create franchisees across India to sell holidays better in other parts of the India.
Okay. That is quite interesting to know. And why Patna in particular?
The team did its work and understood where we could basically get decent amount of business, and hence, it seems like a low-hanging fruit.
Thank you very much for your time, Prashant. It's always a lovely talk. Listening to your podcast as well, and it's nice to talk to you. I wish you [indiscernible].
[Operator Instructions] The next question is from the line of Aditya Krishna, an individual investor.
Prashant, great -- I think strong, strong finish to the year. I've been participating in every call, ever since. I have a couple of questions and my observation from our numbers, specifically [indiscernible] business. .
First one is we have a straight quarter-on-quarter top line decrease of 15%, right? And looking into your numbers a little detail, it directly attributes to -- so we have been doing well on the airline side.
But this directly attributes to decrease in revenues for the hotel packages side, it has suddenly become 0 this quarter from INR 18 crores. I mean around INR 2 crores, INR 3 crores probably from last quarter to this quarter, quarter-on-quarter. Why this sudden decrease in this hotel revenue? This hotel revenue, nothing else.
Got it. Got it. Let me explain. First is that quarter 4 is usually a weaker quarter compared to quarter 3. Hence, a quarter-on-quarter approach might not work. Travel is a cyclical business. And quarter 3 is basically filled with holiday seasons, with vacations. And hence, quarter 3 is always a better quarter than quarter 4. You can even look it up in our [ composite ] results, and you will find the same reason. The reason why -- and you're absolutely right, in the hotel side, as I've explained before. There was one particular MICE booking. MICE is a group booking of a corporate, which was basically part of hotel and holiday division. That particular booking gave us huge impetus in quarter 3. There was 1 particular booking, which gave us huge impetus.
And hence, you see that difference existing for fourth quarter. Overall, our hotel business is growing at break -- as I mentioned before as well, our hotel business grows that breakeven pace. We do not intend to make money in the hotel space for next couple of years, as our intentions are to grow our hotel business quite dramatically.
Got it. Perfect. Thanks for the clarification. My second question is around the PAT, right? Now PAT again, looking at quarterly revenue. Now we haven't had a very strong year, I agree. But looking at quarterly revenue and PAT extraction what we call, it has dipped from 35% last year's same quarter to 30% to now 25%, right, this quarter. I.
would want to know -- fine, I mean, we are investing in marketing and all of that as we are growing. But why such a big differential in PAT percentage as a percentage of quarterly revenue this quarter?
So again, I would not -- I would encourage you to look at the numbers on the GBR basis, not on the revenue basis. In the revenue basis, what happens is that there are certain revenues which are not accounted in our businesses. For example, if you look at our presentation, we always talk about adjusted revenues, not about the revenues because there is a percentage of discounts, which we give. .
Now discounts are always netted off in revenues. And hence, you may see a lot of variance if you do PAT divided by revenue because discount is our prerogative. In some quarters, we may give higher discount. In some quarters, we may give lower discount.
Hence, our revenue is not a -- revenue is not a true testimony to our take rate. Our take rate, our actual take rate is our revenue plus our discount. And hence, if you just do PAT divided by revenues, you may see some numbers, which may not make sense. And hence, my recommendation would be to always look at our PAT as a percentage of a GBR. And that you will find quite steady fast.
So just following up on that, exactly what you just said right now. PAT as a percentage of GBR last quarter was 1.8%. This quarter, it is reduced to 1.4%. Whereas last year, same quarter, it was 2%. So there is a differential. So that's one thing. Because -- I mean that also attributes to higher tax paid maybe or similar taxes paid. But my real question is...
So this particular quarter -- this particular quarter, the employee expenses were on the slightly higher side because we usually give increment -- we usually give increment in December month to our employees. So there's a cyclical part as well over here.
For quarter 4, we usually give increments in December month. That's our company policy, which is why you may see for this particular quarter, we may have spent a little bit extra.
Plus in this particular quarter, we basically tied up with Women Premier League, which was not there in the last quarter, which is why the certain expenses related to marketing have also gone up slightly. Now all of that -- correct. So all of this put together has increased -- has reduced our PAT from, let's say, 1.8% to 1.5% for this particular quarter.
Got it. Got it. Fair enough. That's a pretty decent explanation. So -- I throughout the call, people have spoken about 42% to 28% in PAT and as a percentage of the yearly revenue. And that happens in Internet business.
But for the first time in probably -- or second time, probably in history of the company, we have moved to negative operating cash, right? We have always maintained positive operating cash, I think throughout most quarters.
But this quarter, I think last quarter also, we have moved into negative operating cash. May I know why this -- I mean I know we are burning -- or we are investing continually what we make on growth probably. But why this strategy of negative operating cash now?
So the negative operating cash comes from 2 particular sites. We -- as I mentioned in one of the call -- one of the questions before, that trade receivables have increased and our other current assets have increased. Our other current assets is basically the advances which we give to the airlines and to the hotels.
Now these numbers are increasing in proportion to our GMV increase. As our GMV is increasing, these numbers are increasing in the same proportion. And which is why you see that the overall net operating cash for this particular year was negative.
Okay. Last 2 questions. The first one is -- so I was still looking even more details. There is a segment, contract liability on your balance sheet which has jumped 4x, right?
And there's an increase of INR 50 crores in your contract liability, which means someone is to -- either we are owing someone INR 50 crores or we have taken some kind of borrowing on a contract. What is this attribute exactly to, Prashant?
So this is basically an advance, which we have received from ITQ and there are some advances which we have received from the agents as well. So the entire B2B business does not run on credit. There is some business which runs on advances as well.
And at EaseMyTrip, we have received an amount from ITQ. ITQ is one of the GDS. And they have given us advances in this particular year, which will continue to get set off as we make profits in the future.
Okay. One last question, one [indiscernible]. So you said previously, we are projecting -- or we are looking for a 50% GBR run rate coming year or -- that's what we think. So it's assuming 50% run rate in GBR, gross revenue, gross bookings.
So assuming PAT percentage is around -- we maintain or we improve it to say, from 1.4% or 1.5% to around 2%. That is still a huge delta increase. Can we maintain it? Or you will still continue to focus on growth and then probably PAT [ percentage ] would be lower?
So again, as I said before, there's a very thin line between aiming for very high growth and continuing to focus on profitability side. It's a very fine balance, which our company has exhibited for the last 14 years, and we would not want to forget our roots and continue to go with the same basics, which is that, let's say, for this particular year, we have decided that we want to grow by 50%.
If you -- in FY '22 -- in the quarter 4 of FY '22, in the call, I did say that in the coming year, which is this year, we would want to cross more than INR 7,000 crores as GBR. And we did so, from INR 3,700 crore, we have jumped to INR 8,000. In fact, we said 6,500, if you remember, in quarter 4 of FY '22.
We mentioned -- we gave an indication of INR 6,500 crores. However, we have crossed INR 8,000 crores. Now with this particular quarter -- for this particular year, we anticipate that we will grow by 50%. Most likely, we will overgrow that number, but we anticipate to grow by to 50% while continuing to grow with a similar level of profitability as what you are seeing right now.
So hence, this is the expectation which we have, I mean grow by profitability, I mean profit margin to remain in the same lines of between 1.5% to 2% as what you have mentioned is what we are looking forward to maintain while grow our GBR by more than 50% in this particular year.
The next question is from the line of Prashant, an Individual Investor.
Congratulations for a wonderful set of numbers. This is my first time in the conference call.
I wish to ask that what kind of headwinds or resistance are we facing as a company because in one of your interviews, I have heard that we aspire to become the #1 travel online [indiscernible] company in India. So do you feel that any headwinds or resistance we are facing, which is keeping us at #2?
No. I mean, there is no headwinds. We only have tailwinds. We only see things which are helping us grow our business. The India story is exhibiting really, really well. The number of new airports are coming, are fabulous.
The overall business is growing quite steady fast in a strong manner, as you can see already. There are no headwinds. The reason why we are #2 is because it takes time.
We are not a traditional -- we are not a very conventional e-commerce company, which basically has raised tons of money and it's painting the town red by advertising everywhere about themselves to just grow the market share even if it is at loss. That's not the DNA of the company.
We wish to continue to grow this company profitably. And that is why it takes time to grow from #2 to #1. And as I've shared before, we want to have a journey of 3 years to grow from that position to be the #1 player.
One more last question, if I may ask. Sir, what kind of support or policies do we expect from the government, so that this particular travel online sector and particularly our company, which can be conducive for further growth?
It would be hard for me to say particularly for our company. The best part of government is to actually stay out of business. And I think the government is doing a fabulous job at it. They are trying to privatize most of the things.
The reason why inbound tourism or overall travel in India is growing exponentially is basically because of the efforts of this government. As you are aware of, from 1947 until 2013, the number of highways, which were constructed during those 60, 70 years is the same number of highways which were constructed in the last 10 years.
So hence, the country is progressing in terms of the new airports, the better infrastructure, and we all are reaping the benefits of it. And beyond that, we do not need any particular support from the government. We do try to serve government institutions the best way we can.
For example, in this particular quarter, we have signed up an MOU with Andhra government. We met the honorable CM of Andhra Pradesh in Vijayawada. And over there, we discussed the potential of what all EaseMyTrip can do for Andhra Pradesh government. And on the basis of that, they basically floated a tender and EaseMyTrip basically won that contract.
And we are working along with them to promote Andhra Pradesh as a tourism destination for the rest of India. So similarly, we look forward to work with various state level international level tourism groups to promote their destination among the elitest of the elite customer base, which we have. As you already know that a huge chunk of EaseMyTrip is flight bookers, not the train traveler or the bus traveler, which is why the user base of EaseMyTrip is crème de la crème and everybody would want to promote their particular destination on our user base.
And hence, we would continue to work with government sectors in that particular aspect. Yet, otherwise, I think that India growth story related to travel is for all of us to see. We really believe that there is no COVID revenge travel, which is happening anymore. The travel, which has grown exponentially is just the new way people live now.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Prashant Pitti for his closing comments.
Thank you. Thank you, everyone. On the concluding note, I would like to appreciate the efforts of our team in striving to reach several milestones that we have been able to achieve during the quarter and FY '23 and it reforms our position as a leading player in online travel industry in India.
We remain committed to delivering exceptional services to our valued customers. These achievements are also reflective of unwavering trust and support of our valued customers, stakeholders and partners. As we strive to deliver excellence in all aspects in our operations, maintaining profitability, fostering long-standing and meaningful partnerships, expanding our services and reach, we will constantly work towards providing innovative solutions that redefine travel industry.
We are thrilled and excited about the future that lies ahead. And on that note, I would like to thank all of you for joining this earnings call. And we hope we have answered all your queries. In case if you have any further queries, please feel free to reach out to our investor relationship team. Thank you. Thank you, everyone.
Thank you, members of the management team. Ladies and gentlemen, on behalf of EaseMyTrip, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.