Antique Stock Broking Bullish on Yatra Online, Initiates Coverage with BUY Rating

Antique Stock Broking Bullish on Yatra Online, Initiates Coverage with BUY Rating

VoM News Desk | November 29, 2023 | 04:11 PM IST | Breaking News | Follow on Google News

Antique Stock Broking Bullish on Yatra Online, Initiates Coverage with BUY Rating

Antique Stock Broking Bullish on Yatra Online, Initiates Coverage with BUY Rating

Antique Stock Broking has initiated coverage on Yatra Online (Yatra) with a BUY rating, indicating optimism about the company’s prospects in the burgeoning Indian travel sector. The brokerage, however, has not provided ratings for MakeMyTrip or Easy Trip Planners, though it anticipates growth and improved margins for all three Online Travel Agents (OTAs) in the near future.

Growth Prospects of India’s Travel Sector

The brokerage highlights the travel and tourism sector as a key driver of India’s economy. It forecasts the travel sector to grow at a 9-12% CAGR, reaching around ₹4,540–4,560 billion by FY28. This growth is expected to be bolstered by factors such as rising disposable income, urbanization, and an expanding online consumer base. With the increasing penetration of the internet and smartphones, online penetration in the travel industry is projected to grow significantly, reaching ₹3,335-3,355 billion by FY28.

Yatra Online’s Strategic Positioning

Yatra, identified as India’s third-largest online travel company and the country’s largest corporate travel service provider, is well-positioned in the market. The company boasts a high retention rate of approximately 98% in corporate travel and hotel reservations, translating into higher yields than the consumer segment. The ongoing recovery in corporate travel, lagging behind consumer travel post-COVID-19, is seen as a potential growth area for Yatra.

Financial Forecasts and Target Price

Antique Stock Broking predicts that Yatra will experience a CAGR of 23% in revenue, 67% in EBITDA, and 157% in PAT over FY23-26E. The brokerage attributes this growth to Yatra’s steady customer base, established distribution network, and leadership in corporate travel. Assigning a multiple of 24x to 1HFY26 EPS, the brokerage sets a target price of ₹168 for Yatra, indicating a potential upside of 28% from the current market price (CMP) of ₹131.

VoM News Desk

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