YTRA: Possible Additional Listing on India Stock Exchanges Should Accelerate Valuation Re-rating

By T. Moore, CFA



Business News Update

We were pleasantly surprised by the news that Yatra Online, Inc. (NASDAQ:YTRA) is considering whether to do additional listing of its Indian subsidiary on stock exchanges in India. The company will likely reach its decision by December after it further evaluates it with financial advisors.

We believe this move could lead to a re-rating of the stock more quickly than if it stayed entirely listed in the US with its YTRA ticker on the NASDAQ and YTROF on OTC Pink.

We envision retail investors located in India, like mom and pops, buying shares if it were to list there also. Currently, Indian retail investors are unable to buys shares of YTRA. Furthermore, mutual funds in India might become more attracted to local shares.

Additional benefits of adding listings in India would be access to more resources for capital if needed, some bigger institutional investors in India who might wade in on Yatra shares or possible increased sellside coverage from India-based analysts.

While we do not know the cost of doing additional listings, we believe the cost to list in India would be lower than what is charged in the US by investment bankers and service providers.

Our estimates remain unchanged for now until we learn if the company will incur additional expenses to list also on India stock exchanges.

We continue to believe this stock is undervalued for its prospects and versus peers. In our initiation report last month, we described several of Yatra’s competitors such as MakeMyTrip (Golbibo), Easy Trip Planners (Ease My Trip), Thomas Cook India and a handful of others. We continue to point out that YTRA trades at a seemingly underserving too large of a discount compared to its peer group.

Fundamentals have been improving since June. July, August and likely September air passenger travel and corporate hotel bookings have improved sequentially from June. Per the company’s comments on their earnings call last month, they cited that corporate gross bookings in July were up 268% over June. August, by that point in time, was up 316% from June.

Passenger travel has picked up and corporate travel is showing greenshoots. Consulting, Banks and Big Tech Indian firms (including outsourcing players) are leading the recovery.

Holiday season travel begins soon, especially for the Diwali festival holiday in early November, Christmas in December and more comfortable weather for travel.


We value YTRA using a peer comparables valuation methodology based on EV/Sales for 2022 estimates. We expect YTRA to begin generating positive annual adjusted EBITDA this fiscal year.

$4.25 remains our price target valuation for YTRA using a blended peer group average & median of 3.4x EV/Sales 2022 and applying a 10-15% discount for micro cap size, single country risk and corporate governance.

The stock is trading at 1.4x our calendar 2022 Sales estimate, which is a 60% discount to the peer group. 9.6x EV/Adjusted EBITDA calendar 2022 is a 33% discount to peers.

We expect a re-rating to narrow YTRA’s relative valuation gap as travel picks up in India. An additional listing on India stock exchanges could accelerate this re-rating depending if there is no third wave of COVID-19 to strike India or the world.

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