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Is Yatra Online Inc’s (NASDAQ:YTRA) Balance Sheet A Threat To Its Future?

Frank Brewer

Yatra Online Inc (NASDAQ:YTRA) is a small-cap stock with a market capitalization of US$249.67M. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Companies operating in the Online Retail industry facing headwinds from current disruption, in particular ones that run negative earnings, are inclined towards being higher risk. Assessing first and foremost the financial health is essential. Here are few basic financial health checks you should consider before taking the plunge. However, I know these factors are very high-level, so I suggest you dig deeper yourself into YTRA here.

Does YTRA generate enough cash through operations?

YTRA’s debt levels have fallen from ₹469.43M to ₹44.88M over the last 12 months , which is made up of current and long term debt. With this reduction in debt, the current cash and short-term investment levels stands at ₹3.53B , ready to deploy into the business. Moving onto cash from operations, its trivial cash flows from operations make the cash-to-debt ratio less useful to us, though these low levels of cash means that operational efficiency is worth a look. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can take a look at some of YTRA’s operating efficiency ratios such as ROA here.

Does YTRA’s liquid assets cover its short-term commitments?

With current liabilities at ₹5.83B, the company has been able to meet these obligations given the level of current assets of ₹7.62B, with a current ratio of 1.31x. For Online Retail companies, this ratio is within a sensible range since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.

NasdaqCM:YTRA Historical Debt Mar 13th 18

Is YTRA’s debt level acceptable?

Since total debt levels have outpaced equities, YTRA is a highly leveraged company. This is not unusual for small-caps as debt tends to be a cheaper and faster source of funding for some businesses. Though, since YTRA is currently loss-making, there’s a question of sustainability of its current operations. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.

Next Steps:

YTRA’s debt and cash flow levels indicate room for improvement. Its cash flow coverage of less than a quarter of debt means that operating efficiency could be an issue. Though, the company exhibits an ability to meet its near term obligations should an adverse event occur. I admit this is a fairly basic analysis for YTRA’s financial health. Other important fundamentals need to be considered alongside. I suggest you continue to research Yatra Online to get a more holistic view of the stock by looking at:


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.