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The acquisition of 100% stake in Globe All India Services Limited (Globe Travels) will expand Yatra’s corporate customer base by 40% and likely enable it to extract better terms from suppliers. Globe Travels reported gross bookings (GB) of INR 7.83bn in FY24, roughly 12% the size of Yatra’s GB of INR 75.9bn. Importantly, the former had reported EBITDA of INR 170mn last fiscal year versus latter’s INR 147mn. Yatra has acquired Globe Travels in a 100% cash transaction of INR 1.28bn (it had earmarked INR 1.5bn for M&A at the time of its India’s listing), implying a trailing EBTDA multiple of 7.5x. The multiple appears reasonable given that Globe Travels revenue and EBITDA grew a solid 28%/31% over the last six years as per ROC filings. However, we note that the target business requires working capital investments. Going ahead, Yatra’s B2B customers will contribute >60% to its total revenue, while EBITDA contribution will be ~80%, as per management. The target is likely to be EPS accretive immediately, as it is EBITDA +ve. Moreover, Globe Travels has expertise in MICE business, positioning the combined entity as one of the leading players in this space (by volume of business). We update our model to factor in the M&A impact and raise our Sep’25 target price to INR 160 (INR 150 earlier), derived basis an unchanged NTM PER of 35x

* Deal structure: Yatra has acquired 100% stake in Globe Travels for a total cash consideration of INR 1.28bn, adjusted for net debt and working capital. This acquisition will add ~360 corporate clients of Globe Travels, expanding Yatra’s corporate customer base to ~1.2k+. There is minimal overlap between the customer bases of Yatra and Globe Travels, as Yatra’s primarily serves larger clients in sectors such as IT and Consulting, while Globe Travels caters to a mid-tier clientele with average annual billings of INR 10mn. Furthermore, the mid-tier nature of Globe Travels’ client base limits the need for customisations, facilitating a smoother tech integration process.

* Synergy benefits: The acquisition will provide an immediate boost to Yatra’s B2B revenue, while cost synergies are expected to materialise over the medium term. Revenue synergies will be achieved through 1) cross-selling of Yatra’s hotel, expense management and other solutions to Globe Travels’ client base, whose current focus is primarily air ticketing; and 2) negotiating better supply terms through enhanced positioning with suppliers. Cost synergies would be achieved through 1) integration of technology solutions; and 2) the alignment of support and other functions.

* Brief Financials: Globe Travels had recorded GB worth INR 7.83bn in FY24. Its reported revenue stood at INR 2.5bn, while adj. revenue was INR 470mn. The difference between reported revenue and adjusted revenue is primarily attributable to the accounting practice for MICE business (~30% of total GB), where the GB amount is recorded as reported revenue, and subsequently service cost is deducted. The consolidated take rate for Globe Travels (adj. revenue as a % of GB) stood at 6% in FY24, with Air Ticketing/MICE at ~4%/~9-10% respectively. The company’s reported EBITDA margin was 6.8% in FY24.

* Update model to factor the M&A, TP revised to INR 160: We factor the Globe Travels M&A in our model and accordingly raise Yatra’s GBR by 6-11% over FY25-27, while revenue rises by 22-26% over the same period. We see Yatra’s reported EBITDA/Adj. EBITDA expanding at a CAGR of 88%/33% over the next 3 years on the back of scale-up of its corporate business and likely pay-off of investments in the Hotels/MICE segment. As a result, we expect Yatra’s Adj. PAT to improve from just ~INR 9mn in FY24 to INR 838mn in FY27. Overall, our earnings estimates are raised by 5-13% over FY25-27. We raise our Sep’25 TP to INR 160 (vs. INR 150 earlier) with an unchanged NTM PER multiple of 35x.

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