Keynote Capitals has maintained its BUY recommendation on Yatra Online Limited, assigning a target price of Rs. 206 against the current market price of Rs. 98, implying a potential upside of approximately 110%. While the company faced temporary disruptions during Q4 FY26 due to geopolitical tensions in West Asia, particularly affecting its Meetings, Incentives, Conferences and Exhibitions (MICE) business, its underlying corporate travel franchise remains robust. Strong corporate client additions, improving take rates, expansion of the RECAP platform and a growing SME presence continue to strengthen Yatra's long-term growth profile. Management expects profitability and operating leverage to improve as deferred travel demand normalizes during FY27 and beyond.

Keynote Capitals Reaffirms BUY Call Despite Temporary Travel Headwinds

Yatra Online Ltd. has encountered a short-term setback rather than a structural slowdown. The online travel services provider reported a mixed set of Q4 FY26 numbers as geopolitical unrest in West Asia disrupted international corporate travel demand. However, the brokerage remains constructive on the company’s medium-term prospects and continues to view the recent weakness as temporary.

Keynote Capitals has reiterated its BUY recommendation with a target price of Rs. 206, valuing the company at 35x FY28 estimated earnings. The target suggests an upside potential of nearly 110% from current levels.

West Asia Conflict Disrupts MICE Business During Peak Travel Season

The primary drag on quarterly performance came from the MICE segment.

International corporate group travel to destinations such as Dubai and Abu Dhabi typically accelerates after Ramadan. However, the outbreak of conflict in West Asia during this critical booking period forced multiple corporate events and incentive trips to be either postponed or cancelled.

Several trips that eventually proceeded had to be rerouted to European destinations, significantly increasing travel costs. Since MICE contracts are generally negotiated on fixed-price arrangements, Yatra absorbed the higher costs instead of passing them on to clients.

As a result, EBITDA margins compressed materially during the quarter despite continued growth in overall booking activity. Management indicated that a portion of deferred demand is expected to return during FY27.

Corporate Travel Continues To Be The Core Growth Engine

The company’s corporate travel franchise remains its strongest competitive advantage.

During Q4 FY26, Yatra added 55 new corporate customers carrying an annual billing potential of approximately Rs. 2.7 billion. For the full year, corporate client additions reached 163, representing annual billing potential of nearly Rs. 9.6 billion.

Management highlighted that these customers generally exhibit churn rates below 3%, creating a highly stable revenue base. Historically, newly acquired corporate accounts take six to nine months to reach full integration, with 60%-80% of potential billing value realized within the first year.

The company is also expanding aggressively into the SME segment through dedicated sales teams, targeting underpenetrated markets across South India and broadening its geographic footprint beyond traditional corporate hubs such as Mumbai and Gurgaon.

B2B Focus Continues To Strengthen Profitability Metrics

Yatra's strategic emphasis on business travel is yielding measurable economic benefits.

Unlike leisure travelers, corporate customers typically book closer to departure dates, purchase higher-value tickets and display lower price sensitivity. Consequently, airlines increasingly prefer B2B travel relationships because they generate superior economics.

This trend has worked in Yatra’s favor. The company's airline take rates have improved steadily over the past three years, increasing from approximately 2.7% in FY24 to around 4.0% in FY26.

Additionally, air-ticketing discounts as a percentage of revenue have declined significantly as the business mix shifts toward higher-quality corporate traffic. Management expects this trend to continue, supporting margin expansion over time.

RECAP Platform Enhances Customer Stickiness

Beyond travel bookings, Yatra is strengthening its enterprise ecosystem.

RECAP, the company’s expense management solution, continued to gain traction during FY26. Eight additional clients were onboarded during the fourth quarter, bringing annual additions to sixteen customers.

While RECAP currently contributes modest revenue, management emphasized its strategic importance. The platform integrates travel management with expense tracking, creating a comprehensive corporate ecosystem that deepens customer relationships and improves retention rates.

This integrated approach enhances switching costs and positions Yatra as a broader enterprise solutions provider rather than merely an online travel intermediary.

Financial Performance Reflects Temporary Margin Pressure

Revenue growth remained positive despite profitability challenges.

Despite the quarterly disruption, FY26 delivered healthy growth. Revenue Less Service Cost increased 24% to Rs. 4.82 billion, while EBITDA surged 81% to Rs. 804 million. Net profit rose 28% to Rs. 468 million.

The company generated Gross Booking Value of Rs. 80.5 billion during FY26, representing growth of approximately 14% over the previous year.

Management Expects Strong Recovery During FY27

The near-term outlook remains cautious, but the medium-term trajectory appears encouraging.

Management expects the first half of FY27 to remain somewhat subdued due to macroeconomic uncertainties, elevated fuel costs and lingering geopolitical disruptions. However, a stronger second-half recovery is anticipated as deferred MICE bookings return and corporate travel normalizes.

The company has guided for approximately 20% growth in Revenue Less Service Cost and around 30% growth in adjusted EBITDA over the next two to three years.

Meanwhile, management expects return on capital employed to steadily improve toward high-teen levels through higher operating leverage, improved working capital efficiency and continued scaling of corporate-focused offerings.

Investment Levels And Valuation Outlook

Current Price: Rs. 98

Target Price: Rs. 206

Potential Upside: 110%

FY27E EPS: Rs. 5

FY28E EPS: Rs. 8

Recommendation: BUY

At current valuations, Yatra trades at approximately 19.9x FY27 estimated earnings and 12.8x FY28 earnings, leaving substantial room for rerating if corporate travel growth and margin recovery unfold as expected. The company’s expanding enterprise ecosystem, growing SME opportunity and strong corporate client pipeline provide multiple levers for long-term value creation.

Bottom Line

Yatra's Q4 FY26 performance was overshadowed by geopolitical disruptions rather than business execution issues. Corporate client acquisition remains healthy, enterprise solutions continue to gain traction and management's long-term profitability roadmap remains intact. While investors may need to navigate a few quarters of volatility, the company's strong positioning in India's corporate travel market and expanding ecosystem suggest that the current weakness could represent an attractive accumulation opportunity for long-term investors.

Disclaimer: Investors should conduct their own due diligence and consult a qualified financial advisor before making any investment decisions.