Dane Capital Management is bullish on Yatra Online Inc (NASDAQ:YTRA), a $248.78-million market cap consumer travel platform and online travel agent in India. In its Q4 investor letter, Dane Capital discussed its short thesis on YTRA. The fund believes that the Indian travel service provider has ‘excellent fundamentals’ and the company’s stock could deliver big gains in the coming months. In this article, we’ll take a look at Dane Capital’s comments on Yatra Online, and will discuss the company’s recent performance.
Here is what Dane Capital thinks about Yatra Online:
Yatra is the second largest OTA in India, the fastest growing large economy in the world. We believe the opportunity for the company is vast, and despite guidance of 35-40% annual revenue growth, we suspect that as personal incomes rise, the Indian travel market will get off the bottom of the “S-curve” and growth could accelerate dramatically.
In the short-term, we believe business is good, but the stock has acted poorly for several months. We believe this is almost solely due to a large seller. Filings indicate that Norwest Ventures, which held shares for 10 years, and probably was past its vintage, no longer holds any shares. We believe they distributed the shares to their LP, and suspect that they have been bleeding shares in recent months.
We suspect that when the selling dries up, the stock will stage a strong recovery based on excellent fundamentals and the company continuing to operate to plan. We believe this story is in its early stages and we will be rewarded for our patience.
Yatra Online Inc (NASDAQ:YTRA) is the second-largest online travel company in India. The company owns and operates Yatra.com and other associated platforms for leisure and business travelers. It provides information, pricing, availability, and booking facility for domestic and international air travel, domestic and international hotel bookings, holiday packages, buses, trains, in city activities, inter-city and point-to-point cabs, homestays and cruises. Yatra Online provides real-time bookings for more than 70,000 hotels in India and over 800,000 hotels around the world.
For three months ended December 31, Yatra Online reported a 40.8% year-over-year (YOY) increase in revenue to INR 3.4 billion. Net income for the quarter was INR 232.3 million. The company reported that standalone hotel room nights booked during the quarter was 0.5 million, up 37.8% YOY. Revenue less service cost from air ticketing rose to INR 1.4 billion, up 46% YOY. Gross air passengers booked were 2.3 million, representing YOY growth of 31.0%. Total gross bookings – air ticketing and hotels and packages – were INR 23.9 billion, representing a YOY growth of 44.8%.
Meanwhile, shares of Yatra Online Inc (NASDAQ:YTRA) are down nearly 4% so far this year. Over the last 12 months, the stock has dropped more than 22%. However, shares moved up nearly 8% over the last five trading days. YTRA received an average rating of Buy and an average price target of $14.17 from the analysts polled by FactSet. On Friday, the stock was closed at $7.20.
Besides Dane Capital Management, there are some investors that also see a value in Yatra Online. Among the hedge funds covered by Insider Monkey, six funds were holding positions in the company as of the end of September 2017.