ETMarkets Management Talk | Demand in US, Europe higher than 2019: RateGain CFO Tanmaya Das

NEW DELHI: Despite all the negative news surrounding slowdown and recession, RateGain Travel Technologies CFO Tanmaya Das says the demand in the US and European market is higher than 2019 level. “Keeping that in mind, we are cautiously optimistic in our outlook for next year and are cognizant of the macro headwinds that we are facing that might affect demand,” he said in a chat with ETMarkets. Edited excerpts:

After a 47% YoY jump in quarterly revenues, what does the picture look like for the remaining two quarters of the fiscal year?
As a majority of our business is based out of the US and Europe, Q3 and Q4 are always strong quarters for us, as we see closure of enterprise deals as well as an uptick in renewals, because of the financial year concluding in December. Sustained demand for travel as well as reliability of our products makes us confident of meeting the guidance given at the beginning of the year of 30%+ y-o-y growth and closing the year on a strong note with continued focus on sustainable growth.

Your operating margin during the quarter came in at 15.2%. How was it before Covid?

In FY2020, our adjusted EBIDTA margin stood at 7.9%. Hence, we have seen a significant improvement in our operating margins as the business scales up and operating leverage kicks in.

How does the new deal pipeline and contract wins look like for this quarter?

Our contract wins stood at Rs 21.2 crore, which is 12.5% growth over the same quarter last year and we have been seeing a sequential improvement in our pipeline too. We currently have a healthy pipeline of Rs 314 crore and are confident of good closures going into the second half of the year.

Are you seeing the impact of slowdown in North America and Europe markets?

Currently, demand in the US and European markets is higher than 2019 level and is holding up quite well according to numbers from our own platform, the performance of our customers.

Keeping that in mind, we are cautiously optimistic in our outlook for the next year and are cognizant of the macro headwinds that we are facing that might affect demand. Inflationary headwinds will only increase the need for digitization, as onboarding more resources will be costlier and we are optimistic that will keep an increased demand. Given the need for digitization and record profits, we see robust demand for our products.

What are going to be the key growth drivers for RateGain in the next couple of years?

We believe our ability to drive interoperability between our products will be the key growth driver for RateGain over the next two years. This ability combined with our existing network of large OTAs and hotel chains will help us expand further in our existing clients and drive sustainable growth. Our fiscal discipline over the years, also allows us the space to invest in new products, addressing new use cases effectively with our new AI-powered products.

What is the kind of response that you are getting from Engage AI?

The early signs are positive given we have launched this product very recently, we are already living in some properties and in talks with some large chains. The expectation of the consumer to have everything available within a few clicks and messages, is accelerating the need for hotels to adopt solutions that can help them stay connected and provide a seamless guest experience. The hospitality space continues to see staff shortages and this product allows them to open another convenient channel of communication with their guests addressing simple questions to making reservations and hence delivering a delightful experience to them.

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