MakeMyTrip Limited Q4 FY2026 earnings call

Structural Growth Drivers of Indian Travel Market

• Expanding aspirational middle class: The middle-income household segment ($4,500-$35,000 annual income) is growing at a high single-digit annual rate, projected to expand 50% from 200 million households in 2022 to 300 million in 2032. India added 70 million new passport holders in the last five years, and Tier 2/3 cities are now core growth drivers, creating a large multi-decade expanding addressable market.
• Shift from occasional travel to habitual travel: Booking frequency per user is rising annually, with 3-6 trips per year becoming standard for connected workers across leisure, religious, and weekend trip categories. Millennials, the fastest-growing cohort, already spend 34% of annual discretionary spending on travel (the largest single category), and per-trip spend will increase as this cohort enters peak earning years.
• World-class physical and digital infrastructure expansion: Operational airports have doubled from 74 in 2014 to 157 in 2024, with plans to reach 400 by 2047; national highway network expanded 60% to 146,145 km by 2024. 1 billion Indians now have access to affordable high-speed internet, and UPI digital payments have largely eliminated checkout friction for online bookings, opening access for Tier 2/3 customers.

AI Transformation

• Launched an upgraded version of Myra, the proprietary conversational AI travel companion, which now supports end-to-end trip planning, booking, and payment via multilingual voice interaction across all travel verticals (flights, hotels, buses, trains, cabs).
• Myra currently handles over 80,000 conversations per day, with 45% of usage from Tier 2 and smaller cities; 50% of non-metro interactions are voice-based, 70% of queries are in Hinglish, and regional languages make up 10% of voice volume.
• Myra users demonstrate 10% higher conversion rates than traditional filter-based booking journeys, with the AI directly assisting over 200,000 bookings per quarter. AI also powers semantic smart search, voice user reviews, and customer support efficiency: 55% of flight and hotel customer queries are now resolved by digital voice agents, and 60-70% of new engineering code is written by AI tools.
• On Redbus, AI chatbots have delivered 33% efficiency gains for customer support, with voice bots replacing legacy IVR systems; regional language users show 2x higher AI engagement than English users.

Operational and Supply Expansion

• Mitigated Q4 headwinds from the West Asia conflict and rising airfares by prioritizing domestic travel, eastbound international travel, and ground transport options. Added new bus supply to reach an average of 46,000 daily private bus schedules.
• Expanded accommodation inventory to over 100,000 options across 2,050 Indian cities, added 12,000 new properties in FY26, and enhanced homestay listings with food delivery serviceability and onsite support disclosures to improve customer experience.
• Corporate travel remained resilient through headwinds: active corporate customers on MyBiz reached 76,800 (up from 64,000 YOY), and 548 large corporates on Quest2Travel (up from 507 YOY).
• Completed acquisition of a majority stake in Lemingo (Flamingo Transfer), a regional Gujarat-based group holiday packages business with presence across western India, to strengthen the company's holiday segment. Completed a strategic minority investment and visa processing partnership with Atlas, a visa processing platform, to streamline the customer experience and create cross-selling opportunities.
• Completed internal restructuring merging Redbus India into MakeMyTrip India, as preparation for a potential future listing of the combined India business.

1. Air Ticketing: Adjusted margins reached $99.3 million for the quarter, with 10.7% year-over-year (YOY) growth in constant currency. Volume declined due to external disruptions, but strong ancillary attach and improved unit economics drove margin growth. McMaster maintained its leading market share at 30.8% of domestic aviation, gaining 0.2% YOY despite overall industry volume declines (domestic passengers down 1.5% YOY, international passengers down 6% YOY for the quarter).
2. Hotels and Packages: Quarter volume grew 15.2% YOY (standalone hotels grew 15.5% YOY), with gross booking growth of 10.8% YOY in constant currency and adjusted margin growth of 11.5% YOY in constant currency. For the full year FY26, adjusted margin grew 15.7% YOY in constant currency. The international hotel segment was negatively impacted by the West Asia conflict, while domestic hotels grew strongly outpacing overall industry occupancy (which was flat to slightly negative YOY for the quarter).
3. Bus Ticketing: Adjusted margins hit $41.1 million for the quarter, with 17.1% YOY growth in constant currency. Quarterly ticketing volumes grew 27.6% YOY, and full-year volumes grew 32.9% YOY. Intercity cabs, a newer business line, grew over 20% YOY.
4. Other (Ancillary) Segment: Adjusted margin was $25.4 million for Q4 FY26, with 27.1% YOY growth in constant currency. For the full year FY26, adjusted margin reached $95 million, with 37.1% YOY growth in constant currency, as ancillary offerings continue to scale and capture greater customer wallet share.

Overall company results: Full year FY26 IFRS revenue grew 10.7% YOY in constant currency; operating results (EBIT) was $156 million, up 30.1% YOY. Adjusted operating profit margin expanded to 1.82% of gross booking in FY26, up from 1.71% in FY25. Q4 adjusted operating profit was $46.5 million, with a margin of 1.82% of gross booking.

• Management reaffirms the existing adjusted operating margin guidance range of 1.8% to 2% of gross booking, and will not revisit this guidance until travel demand conditions stabilize. The company expects continued long-term revenue growth in the 20% range during normal market conditions, and will outperform industry growth even during periods of headwinds due to its diversified business model.
• There is no fixed timeline yet for the potential India listing of McMaster's India business. Multiple regulatory, financial, and operational workstreams are ongoing, and the company will provide updates as it progresses. The structure will initially include dual listings (the existing U.S.-listed entity and a new India-listed entity), with a goal of moving to a single fungible structure long-term subject to regulatory approval.

• Ongoing West Asia geopolitical conflict continues to impact westbound international travel demand, with elevated crude oil prices increasing aviation fuel costs and airfares, leading some airlines to cut international capacity. This has created continued pressure on outbound travel revenue and ticket sizes in the current first quarter of FY27.
• Persistently elevated oil prices at or above $90-$100 per barrel for an extended period could further dampen travel demand, as airlines pass higher costs to consumers and reduce capacity. This impact is partially mitigated by the company's diversified transport offerings, which allow budget-conscious consumers to shift to buses or cabs for short-haul travel.
• General demand volatility from external disruptions remains a near-term risk, though management has a established playbook to adjust costs in line with market conditions to maintain profitability.
• The rise of third-party agentic commerce from large generic AI models could theoretically shift traffic away from online travel agencies (OTAs), though management believes this risk is low due to OTAs' unique control of fragmented travel supply, post-booking fulfillment and support, localized payment infrastructure, and comprehensive end-to-end travel services that generic models cannot easily replicate.

Q: Given ongoing West Asia conflict headwinds extending into the June 2027 quarter, will growth worsen near-term, and will outbound disruption impact margins? What was the recent growth split between domestic and outbound travel?

A: Management confirmed the conflict will continue to impact growth in the June quarter, but the impact is less severe than in March: 65-70% of GCC flights are now operational, and the issue has shifted from broad sentiment disruption to inflation-driven discretionary demand cuts, with only leisure travel impacted while essential travel continues. Seasonal demand and consumer shift to eastbound international and domestic travel has partially mitigated the impact, and margins have remained stable across all segments with no material impact expected going forward. Outbound growth was significantly impacted, so all net growth came from domestic travel, and the overall domestic/outbound revenue mix remained stable around 72-73% domestic / 27-28% outbound.

Q: Is there a timeline for the potential India listing, and how will the existing U.S. listing and McMaster Limited shareholders participate?

A: The process is still early, with multiple regulatory, legal, and operational workstreams ongoing, so no fixed timeline has been set. Indian regulations do not allow dual domestic listing, so the structure will initially include both the existing U.S.-listed entity and a new India-listed entity. Long-term, management aims to create a fully fungible single structure subject to regulatory approval to optimize stakeholder valuation, and will provide updates as the process progresses.

Q: Could the growth of agentic commerce from generic AI models shift travel booking traffic away from OTAs like MakeMyTrip?

A: Management believes this would be extremely challenging due to four core OTA advantages that generic AI cannot easily replicate: 1) heavy long-term investment to aggregate and manage highly fragmented travel supply, especially for small independent hotels and homestays; 2) end-to-end post-booking fulfillment and customer support for frequent travel disruptions; 3) specialized localized payment infrastructure with commercial partnerships that reduce checkout friction; 4) comprehensive coupled/decoupled offerings across all travel verticals to meet full customer demand. Most large generic AI players have already indicated they will focus only on trip planning and discovery rather than full booking fulfillment, and MakeMyTrip is investing heavily to build its own proprietary AI capabilities to maintain its market position.

Q: What is the medium-term margin outlook, and is the current 1.8-2% guidance range maintained? Will the potential India listing result in delisting of the U.S. entity?

A: Management maintains the 1.8-2% adjusted operating margin guidance range amid ongoing demand volatility, and will revisit the guidance only after travel demand stabilizes. On listing structure, the U.S. listing will remain in place initially alongside the new India listing, and any long-term change to a single listing would depend on regulatory approvals and shareholder value optimization. Most current McMaster Limited investors already have the ability to invest in Indian listed securities, so partial fungibility already exists.