Why is Yatra Online Ltd falling/rising?

Recent Price Movement and Market Context

Yatra Online’s share price has been under pressure for the last two consecutive days, resulting in a cumulative loss of 6.94% during this period. The stock touched an intraday low of Rs 151.8, marking a 6.27% decline from previous levels. This downward movement contrasts with the broader market trend, as the Sensex has remained relatively stable, showing only a marginal decline of 0.14% over the past month. Over the last week, Yatra’s stock actually outperformed the Sensex, gaining 4.78% compared to the benchmark’s 0.98% fall, but this recent dip signals a short-term correction.

Trading activity on 17-Feb also highlighted a shift in investor participation. The delivery volume on 16-Feb was recorded at 7.16 lakh shares, which represents a significant 30.31% drop compared to the five-day average delivery volume. This decline in investor engagement suggests a waning conviction among shareholders, potentially contributing to the price softness. Additionally, the weighted average price indicates that a larger volume of shares traded closer to the day’s low, reinforcing the bearish sentiment during the session.

From a technical perspective, the stock’s price remains above its 20-day and 200-day moving averages, signalling underlying long-term strength. However, it is currently trading below its 5-day, 50-day, and 100-day moving averages, which may be interpreted as a short-term weakness or consolidation phase.

Long-Term Fundamentals Remain Robust

Despite the recent price decline, Yatra Online Ltd’s fundamental performance continues to impress. The company has maintained a zero debt-to-equity ratio on average, underscoring a conservative capital structure that reduces financial risk. Its net sales have expanded at an annualised rate of 54.57%, while operating profit has surged by 99.89%, reflecting strong operational efficiency and growth momentum.

Over the latest six-month period, the company reported a profit after tax (PAT) of Rs 26.13 crore, marking a robust growth rate of 50.94%. Net sales during the same period reached Rs 607.69 crore, up by 28.84%. The return on capital employed (ROCE) for the half-year stood at a healthy 7.76%, indicating effective utilisation of capital resources.

These positive results have been consistent, with Yatra declaring favourable earnings for six consecutive quarters. This track record has contributed to the stock’s impressive one-year return of 93.77%, significantly outperforming the broader market’s 9.81% gain and the BSE500’s 13.53% return over the same timeframe.

Market Performance and Investor Sentiment

While the stock’s long-term trajectory remains upward, the recent short-term price weakness may be attributed to profit booking or a temporary pullback after a strong rally. The underperformance relative to its sector by 3.33% on the day suggests that investors are cautious amid broader market uncertainties or sector-specific factors. However, the stock’s liquidity remains adequate, with a trading capacity of approximately Rs 2.26 crore based on 2% of the five-day average traded value, ensuring that investors can transact without significant price impact.

In summary, Yatra Online Ltd’s recent share price decline on 17-Feb reflects a short-term correction amid reduced investor participation and technical resistance at key moving averages. Nevertheless, the company’s strong fundamentals, consistent earnings growth, and market-beating returns over the past year provide a solid foundation for potential recovery. Investors should weigh these factors carefully when considering their positions in the stock.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →