MakeMyTrip Ltd. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Travel Trends: Indian travelers show eagerness to travel driven by rising income and changing behavior. India's GDP growth is positive, and it's projected to be the world's fifth largest outbound travel market by 2027.
• Business Segments: Air ticketing saw 20% year-on-year growth in constant currency; international air ticketing up over 32%, international hotels up over 63%. Accommodation business grew 24.9% year-on-year in adjusted margin; spiritual and concert-driven tourism emerging. Inbound from Indian diaspora is growing.
• Product Innovations: Launched part payment on international air tickets, value bundles, enhanced homestay supply, Myra ChatBot for accommodation, multi-city cab booking.
• Acquisition: Signed to acquire Happay Expense Management platform, expected to close in the coming quarter

Segment Performance

• Air Ticketing: Gross bookings for the quarter were $1.5 billion, witnessing a 23.1% year-on-year growth in constant currency. Adjusted margin stood at $93.8 million, registering a 20% year-on-year growth in constant currency.
• Hotels and Packages: Gross bookings came in at $681.5 million, registering a 23.4% year-on-year growth in constant currency. Adjusted margin growth was 24.9% year-on-year in constant currency terms, resulting in an adjusted margin of $121.9 million during the quarter.
• Bus Ticketing: Gross bookings for the quarter stood at $328.9 million, growing at 23.6% year-on-year in constant currency. Adjusted margin stood at $35 million, registering a strong year-on-year growth of over 31.3% in constant currency

Guidance

• Accelerated gross booking value growth of 26.8% in constant currency year-on-year during the reported quarter.
• Adjusted operating profit at an all-time quarterly high of $46 million, registering a year-on-year growth of about 38%.
• Expect the transaction to close for the Happay acquisition in the coming quarter

Risks

• Macro economic uncertainties that could affect travel demand.
• Supply constraints in the domestic air market persisting.
• FOREX fluctuations impacting finance income and expense

Question and Answer

Q: On air growth and take rate, A: Supply constraints with new supply progress, take rate affected by seasonality Q: On adjusted EBIT margin, A: Aim for 1.8%-2% range for adjusted margin Q: On finance income/expense, A: Impact of FOREX fluctuations Q: On international growth sustainability, A: Macro factors and execution driving growth Q: On competition, A: Focus on market share across multiple segments Q: On seasonality, A: No significant change in seasonality pattern Q: On marketing spend, A: Spend trends by seasonality with spend around 4.6%-5% of gross bookings Q: On GenAI, A: Deploying GenAI in product for improved user experience Q: On demand slowdown, A: No material slowdown seen in the reported quarter Q: On customer segments, A: All customer segments growing Q: On new customers, A: Repeat rate around 73% and net new additions of 1.5-2.5 million per quarter Q: On competition in hotels, A: Market share estimates and competitive dynamics in hotel segments