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spk00: Hello, everyone. I'm Vipul Garg, Vice President, Investor Relations at MakeMyTrip Limited, and welcome to our fiscal year 22 fourth quarter and full year earnings webinar. Today's event will be hosted by Deep Kalra, our company's group chairman and chief mentor. Joining him is Rajesh Mago, our co-founder and group chief executive officer, and Mohit Kabra, our group chief financial officer. As a reminder, this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today's event. At the end of these prepared marks, we will also be hosting a Q&A session. Furthermore, certain statements made during today's event may be considered forward-looking statements within the meaning of safe harbor provision of the US Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are subject to inherent uncertainties, and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date, and the company undertakes no obligation to update the information to reflect changed circumstances. Additional information concerning these statements are contained in the risk factors and forward-looking statement section of the company's annual report on Form 20-F filed with the SEC on July 13, 2021. Copies of these filings are available from the SEC or from the company's investor relations department. I would like to now turn over the call over to Rajesh for his remarks. Over to you, Rajesh.
spk06: Thank you, Vipul. Welcome everyone to our fourth quarter and full year earnings call of fiscal 2022. I hope everyone joining us today is keeping safe and healthy. India went through third COVID wave with Omicron variant that started in December 2021 and continued during January and February. While the reported cases were high, severity of infection was low as compared to the Delta variant were possibly aided by significant vaccine coverage, which has now crossed about 1.9 billion doses. Travel slowed down with onset of Omicron, but picked up again later part of the quarter when Omicron started to recede. Demand started to come back, especially for leisure segments, Albeit momentum remained under pressure due to inflationary pressure, due to price increase of fuel leading to high airfares. This full fiscal year overall was the second pandemic impacted year for travel sector with the robust recovery phases in between waves. However, what is encouraging now is that pandemic-related movement restrictions have been lifted across India and pretty much in the rest of the world, except China, leading to travel coming back to near normal. Consumer sentiment for travel, especially for leisure, is quite positive right now, and more and more people are looking to travel for vacations in 2022. Government of India also opened commercial international flights from 27th March, and this is helping revive the international travel demand as well. In fact, as we enter summer holiday season, we are witnessing pent-up demand for both domestic and international leisure travel. While the interest and demand momentum has been strong, we are watchful of geopolitical crisis, inflationary pressures and its ripple effects on the overall economic environment and travel demand in future. As highlighted earlier, there has also been a significant improvement in online buying behavior during the pandemic, leading to growth in Internet users across all demographics. As a result, while other e-commerce categories have seen accelerated growth in number of transactions, We expect online travel sector to benefit from this shift in future as things normalize and more and more people start to travel. Currently, there are 622 million active mobile internet users in India, which are expected to grow to about 900 million by 2025, driven by smartphone penetration. Similarly, online shopper base is expected to reach 220 million by 2025 from the current base of about 160 million. We are also aiming to increase our online penetration to bring new users to transact on our platform by not only continue to focus and grow our leading travel use cases of air hotels and packages, including alternative accommodations, And bus, but also investing behind, adding and growing other travel and adjacent use cases in line with our already called out vision to be the travel super app. We recently expanded our rail and intercity cab booking services with Red Rail on Red Bus platform, as well as an independent Red Rail app. and ride our intercity cabs to make our RedBus platform a comprehensive ground transport services platform now. This would help booking any of the services super convenient for ground transport travelers. We also believe both rail and cabs offering will be significant source of new customer acquisition in the coming years. With our promise to add ancillary use cases in this reported quarter, we launched Global Cash Card by TripMoney our travel-focused FinTech initiative to cater to Forex needs of our international outbound travelers. In terms of targeting new travel growth segments, apart from going deeper in penetration to Tier 3 and Tier 4 cities on the B2C side, we are now aggressively growing B2B corporate travel segment with our SMEs and large enterprise product solutions via MyBiz and Quest to travel brands that are becoming increasingly popular with the clients. In addition, we are also driving B2B2C demand through our My Partner and My Affiliate solutions. Coming to the highlights of Q4 quarter now. During the reported quarter, despite the headwinds and slowdown in business compared to the previous quarter, we were able to ensure sustained profitability in operations with gross bookings touching a billion dollars. In our air business, we continue to maintain our leadership position. We continue to gain market share and our share in Q4 22 was 30.1% as compared to 29.7% in Q3 fiscal year 22. For domestic traffic, Leisure destinations like Srinagar, Dehradun, Leh have shown more than 100% recovery. High airfares due to increase in fuel prices affected the demand momentum to some extent, but we continue to see steady recovery on the back of pent-up demand in leisure travel during summer holidays. International flight daily departure supply has also now started to scale in April 2022. Nearly 65% of the capacity has come back overall as compared to January 2020, which is pre-pandemic. U.S., Maldives, and Nepal are key destinations wherein capacity recovery has touched 100%, while UAE is at about 85% of pre-COVID supply levels. As things open further, demand recovery will be led by popular destinations for Indians like Thailand, Malaysia, Singapore, Indonesia, Dubai, Maldives, all of Europe, etc. Coming to our hotels, packages and alternative accommodations business, where demand pattern was not any different from January and February months, where January and February months were somewhat impacted by Omicron, but steady recovery starting March on account of leisure travel, weddings, social and corporate events. Supply of rooms has now started to stabilize, and we have seen steady demand recovery across all price segments. Most of leisure destinations are already clocking volumes above pre-pandemic levels, and the outlook for Q1 remains strong. We continue to improve our product offering and bring more and more hotels online. As mentioned earlier, we are going deeper into the country, and we have now hotels listed from 1,600 cities as compared to 1,300 cities in fiscal year 20. This extensive inventory is helping us bring new users from tier three and tier four towns on our platform. We have further improved the experience for our Luxe collection of super premium properties. We've started offering Luxe packages which deliver more value to the customer and bring additional revenues for the hotels. These value added services have been well received by our customers. One of the trends that will continue to remain strong is preference for alternative accommodations and short breaks. People are opting for staycations in homestays, such as villas and holiday homes. We continue to invest and grow this business. Total active properties on our platform have now increased to more than about 34,000. We have witnessed a 70% increase in homestay listings from tier two cities and unexplored destinations over pre-pandemic levels. Homestays is a key segment for us from strategic point of view and is one of the fastest growing segments. Our holiday package business was slow at the start of the quarter like other businesses, but we were able to grow month on month and currently this business is already above pre-pandemic levels. Majority of travel during the first half of Q4 was dominated by domestic destinations where international travels started to pick up towards end of quarter. During the quarter, Kashmir, Himachal, Andaman, Goa and Northeast were the destinations which attributed to about 85% of the domestic demand. This trend seems to continue for the Q1 as well, with an addition of destinations like Ladakh, For international destination, the demand was majorly dominated by Maldives and Dubai. However, with easing of restrictions, Europe also started picking up towards the end. Going ahead into Q1, the demand trends are similar with the addition of new destinations such as Mauritius and Bali. Coming to our bus ticketing business, Q4 saw a steady recovery post the third wave. It is expected that the demand picking up further in April April-June quarter on account of school vacations, reopening of offices, especially in IT sector, inventory will bounce back further, particularly in the southern region. Towards the end of Q4, we also saw green shoots on new fleet addition from operators in a few states. This is a silver lining as operators have shown interest in new fleet addition for the first time since March 2020. And August, well, for both inventory expansion as well as improvement in Net Promoter Score. On the product side, we enabled bus operators to cross-sell add-ons in booking and post-booking touchpoints. In the first phase, operators can enable food-related add-ons. Same will be extended to other categories such as luggage, travel essentials, et cetera, in the current quarter. PRIMO, our program for top rated sellers, which aggregates the best rated services is shaping up well. We have close to 2,450 physically branded buses on the road across the length and breadth of the country. And this is helping us create a robust top of mind awareness. There have been several new initiatives to differentiate the PRIMO experience, including three red bus lounges, which are live across the top boarding points pan India. Other ground transport use cases, which include rail and intercity cabs, continue to scale and bring new users on our platform. We witnessed strong growth in both seats and gross bookings value despite Omicron impact. Ground transport contributed to 27% of the overall new users acquired on MakeMyTrip and GoIbibo platform in Q4. Significant part of this new traffic comes from the non-English speaking Tier 3 and Tier 4 cities, thereby expanding the reach of our offering to new geographies and user segments. We are already witnessing strong growth in our rail bookings business. We witnessed 66% growth in seats in Q4 fiscal year 2022 over Q4 fiscal year 2021, surpassing pre-COVID levels. During the quarter, we launched the standalone Red Rail app with an app size of 7.2 MB. This is the lightest app in the industry to target the Bharat user base. The app has already seen 160,000 downloads in first 30 days of launch with 75,000 active user base. Ride by Red Bus are curated and certified into city cab. offering with quality vehicles and trained drivers is also piloting in two big cities, Bangalore and Delhi. 21% of our overall bookings originating out of Delhi and Bangalore are now ride certified. Driver application, which is the key component in the post booking experience, was enhanced to allow for detailed tracking and auditing ride promises like driver wearing uniform and mask and clean caps. All three of our brands, Nekma Trip, Goi Bebo and Redbus, continue to enjoy highest top of mind recall and consideration. We have industry leading repeat rates. For Q4, over 70% of transactions were done by existing customers, clearly showcasing the strength of our product experience and brands. Coming to our expansion in GCC, Q4 has been a strong quarter for GCC with our continued focus on efficient customer acquisition by enhancing customer proposition and competitive advantage. While COVID did affect the growth, the region is bouncing back and is expected to recover to pre-pandemic levels in 2022. For the quarter, GCC business grew by 52% quarter on quarter. Our travel-focused fintech platform trip money is shaping up well as well. We continue to invest and expand our offerings, we have introduced book now, pay later payment option while booking travel, flight or hotels on MakeMyTrip as well as the Goibibo app. TripMoney has established a marketplace attracting 15 leading fintech players, NBFCs and banks to offer easy travel credit to the travelers. Initial response to BNPL on the MakeMyTrip platforms has been very encouraging. with a 60% growth in BNPL transactions quarter on quarter over the past one year. TripMoney has also strengthened its position in the Forex space by acquiring a majority stake in leading online currency exchange platform in India called BookMyForex. With this, TripMoney has a unique position in the industry by being the only player in travel fintech space to offer a suite of services like INR denominated global card, multi-currency forex card, foreign currency delivery plan India, and instant foreign remittances. Coming to our initiatives for non-direct B2C demand segments, my partner is our product to power offline travel agents. We have now onboarded more than 25,000 travel agents. Net additions of new travel agents in Q4 was about 3,089. By end of March, 2022, 52% of overall agents have transacted at least once on the platform, and the number continues to grow steadily. We are bringing more value to the agents through product enhancements. During the quarter, we launched new onboarding page to empower faster and smoother onboarding for agents, also launched a detailed council ledger section on the platform to facilitate faster reconciliation for the travel agents. Our MyAffiliate program is to power other online platforms for travel services. This initiative is aligned to our outlook for the future. During the quarter, our exclusive partnership with Amazon Pay went live and PhonePay went live in April 2022. These partnerships are aimed at providing greater value for customers with access to MakeMyTrips best-in-class flight and hotel offerings. There is an accelerated digital shift happening because of the pandemic. And through these partnerships, we will be able to extend our customer reach to Amazon pays and phone pays large consumer base, especially in smaller cities and towns. Our aim is to make travel bookings extremely convenient for new adopters, thereby increasing the online penetration of travel bookings. Our technology investment in catering to corporate travel demand have started paying off. as people have started returning to offices in greater numbers. Gross bookings for corporate business during fiscal year 22 grew by 266% year on year, driving non-B2C mix to high single digit. We acquired 262 key accounts and 502 SMEs on MyBiz during Q4. Some of the key accounts that went live were Lenskart, Indiamart, SC Johnson, ABP News, et cetera. On quest to travel, our active customers count has surpassed pre-COVID level. Active customers on Q2T reached 155 in March 22 versus 114 in January 20. Some of the notable customers acquired during the quarter were Nica, Tata Medical, Vira, Tata Motors Finance, Drawing Box, etc. We continue to work on both our products to enable seamless integration with the corporate systems and drive employee adoption. It is noteworthy that despite being a late entrant to the corporate travel segment, we have emerged as a significant player in the corporate segment in terms of gross booking value as well as revenue. To conclude, consumer sentiment remains strong, especially for leisure travel. While the demand momentum could have been even more stronger, but for high fares and inflationary pressures. We are hopeful of full recovery to pre-pandemic levels in domestic travel demand by first half and international travel demand by second half of the upcoming fiscal year 2023. With this, let me now hand over the call to Mohit for financial highlights of the quarter.
spk05: Thanks, Rajesh. Hello, everyone. I hope you're all staying safe and healthy. Online travel booking in India is still an under-penetrated market. Our aim is to continue to grow our offerings and bring more and more users on our platform via the newly built travel use cases while ensuring that high repeat rates drive profitability in our leading business segments. As reported earlier, during the last couple of years through the pandemic, we have adopted a two-pronged strategy on cost rationalization to drive better operating leverage. Firstly, we have made concentrated efforts towards long-term fixed cost reduction, and secondly brought in more efficiencies in our variable expenses, and in particular, the customer allocation costs. As a result of this, despite a 12.4% sequential decline in gross bookings versus the previous quarter, we maintained strong profitability and posted an adjusted operating profit or adjusted EBIT of about $12 million. adding back non-cash amortization and depreciation, the adjusted cash operating profit or the adjusted EBITDA stood at about $15.5 million. For the full fiscal year FY22, adjusted operating profit is at about $23.2 million as compared to an assisted operating loss of $18 million in the previous fiscal year and the loss of about $70 million in full year 20, which was the pre-pandemic year. Moving on to our business segments. During the quarter, AA ticketing adjusted margin stood at about $44.8 million, representing a growth of 20.5% year on year in constant currency terms. This is the first quarter where we have seen growth over pre-pandemic comparable quarter of Q4-F520 in the domestic air ticketing market. Considering that regular international flights have been restarted since 27th of March 22, the recovery in the international ticketing segments, which is stood in the 40s during the reported quarter, is likely to improve in the coming quarters. with the strong recovery in air ticket business margins on expected lines have come back to pre-pandemic levels and stood at about 7.1% during the reported quarter. Our OTA brands, both Make My Trip and Goi Weibo continue to be the top two travel brands in the country with a combined market share of over 30% in the domestic air ticketing business. Existed margin for our hotels and packages business stood at $42.3 million, witnessing a growth of 22.2% in constant currency terms. Just as in the case of the air ticketing business, the recovery to pre-pandemic levels is much stronger in the domestic hotel bookings compared to international hotel bookings, which is likely to gather pace in the coming quarters with the reopening of regular commercial flights. The margins in this segment stood at 17.7% for the quarter and 17.9% for the full fiscal year. These are likely to remain stable in the 17 to 18% range. In our bus ticketing business, the adjusted margin stood at $12.4 million, registering a growth of 15.7% over the same quarter a year ago in constant currency terms. The RedBus brand continues to be a leader in the bus ticketing segment in the country. And in future, we are leveraging this to make a foray into adjacent ground transport services like intercity cabs, rail bookings, etc., as mentioned by Rajesh. Adjusted margin for other businesses during the reported quarter stood at $5.7 million, witnessing an increase of 13.6% over the same quarter last year in constant currency terms. Moving on to our operating costs, we continue to be prudent with our variable expense, especially the customer acquisition costs. Marketing and sales promotion expenses stood at about 4.5% of gross bookings compared to 5.6% in the previous quarter. Overall, with domestic business recovery under the belt, we are hopeful of international recovery gathering pace in the next fiscal year. To leverage the same, we have launched the Great India Travel Sale to nudge travelers to book early in the ongoing seasonally strong summer quarter. While we continue to pursue organic growth, we keep looking for strategic acquisition opportunities to enhance our product portfolio or add technical capabilities. We are well capitalized to be able to pursue such opportunities. Last month, we had announced the acquisition of a majority stake in India's leading currency exchange platform, BookMyForex, which will help us in offering Forex services to our MakeMyTrip as well as Goibibo customers. With international travel reopening, Forex services are showing early signs of traction and we expect growth momentum to increase as outbound travel recovers faster here onwards. We will continue to look for such investment opportunities in the new growth areas that Rajesh has already talked about. With that, I'd like to turn the call to Vipul for any Q&A.
spk00: Thank you, Mohit. Anyone who wants to ask a question to the management can please click on the raise hand option and we will take the questions. The first question is from the line of Gaurav Rathiri of Morgan Stanley. Gaurav, you can unmute your line and ask your question.
spk01: Hi, congratulations on great performance. Am I audible?
spk00: Yes, Gaurav.
spk01: Yeah, the first question is, you know, typically in a down quarter where we see an impact because of various COVID waves, we have seen competition getting more impacted than make my trip. So has that been the case in the current quarter, which is what led to the market share increase? And has that kind of played out in the hotel segment as well?
spk06: Yeah. Hi, Gaurav. Maybe I can take that. Yeah, I guess historically, you know, post-factor when we look at all the numbers or when you just compare it from the market, it probably is the case. And I think it's testimony of the fact the long-standing presence of the brand across the segments that we have. And, you know, very high repeat rate that we also have on our platform. You know, as I was mentioning in the script, our repeat rate is about 70% plus, right? So, obviously, that is what we've seen as a trend historically. You know, as far as this reported quarter is concerned, you know, I guess we will wait and see. And it might as well be the case as well.
spk01: The second question is with respect to some of the partnerships that you talked about, it would be great to get some color on what kind of traction that we are seeing there and, you know, how different it is from historical partnerships that we have had and where, you know, not material progress happened. Do you expect this to really become big at some point in time?
spk06: Yeah, again, a good question, Gaurav. No, I would say specifically if you were referring to, you know, my affiliate partners sort of programmers partnership that we had with, you know, Amazon Pay that we've gone live with and we've very recently gone live with the phone pay as well. You know, as I highlighted, the objective of these partnerships are essentially trying to ride on the, you know, sort of broader and wider customer reach, you know, to the deeper India that these platforms have by virtue of them being in those categories, right? So, you know, which clearly sort of reaches to our tier three, tier four cities as well. So the early sort of trends that we've seen from the numbers happening on these platforms, Clearly, we are seeing one that we're seeing new user contribution coming in more and more from tier three and tier four cities, which is very encouraging, which is exactly what was our objective as well. And we have seen decent traction on the absolute number of sort of bookings also coming in from these platforms, especially Amazon Pay, because phone pay, we've just sort of gone live. recently and in the subsequent quarters, we should be able to share more color on that. But as far as Amazon Pay is concerned, I guess one difference, you know, from the past, maybe some of the similar sort of partnerships that we had was that, you know, this time around the integration is deeper and with our brand. So from a consumer point of view, when they go on Amazon Pay, they basically are getting the benefit of MakeMyDrip brand, pretty much the same UI, same product experience, because that's what is controlled, you know, from a pricing standpoint. It's effectively from a consumer point of view, the transaction is happening on MakeMyTrip. So the reliability or the trust in the brand that has been there on the MakeMyTrip, you get naturally along with sort of riding on the, you know, so the broader base of traffic on these platforms.
spk01: That's really glad to know that. Last question is to Mohit on, you know, how should one think about the advertising and sales promotion expenses, especially in a normalized environment? I would assume that it kind of should increase from the current levels where you need not require to spend so much and competitive intensity to a little bit increase compared to a down quarter like the March 2022 quarter.
spk05: Yeah. And, you know, you've seen that variability in the multiple quarters that we have reported even during the current fiscal year, you know, the recovery was kind of better in Q3 and therefore the spend was slightly higher and, you know, the recovery, you know, in Q4 was marred by the Omicron variant. And therefore, you know, we've kind of seen, you know, much lower kind of, you know, not only absolute expense, but also lower marketing and promotional expense as a percentage of gross booking. So I think we continue to, you know, kind of, you know, keep this broadly in line with the growth momentum or the recovery momentum. Once we're kind of, you know, well past the overall kind of, you know, pre-pandemic levels, both on domestic and international, I think we'll have a much better kind of, you know, comparative versus the pre-pandemic kind of, you know, expense levels, which used to be about 9 to 10%. We, in the, you know, in the current trending, we don't see this really kind of, you know, going anywhere beyond the, say the six and a half, 70% mark. But again, too early to call that out. Like I said, we'll take it step at a time, at least now that we're kind of close to complete recovery on the domestic side, the fact that we are kind of, which is a larger part of the business, close to about 75% of the business, you know, even pre-pandemic used to be domestic. Considering that domestic has completely come back and we are able to see significant, you know, reduction in the customer acquisition costs. I have reason to believe that, you know, we'll be able to kind of, you know, do a similar kind of an efficiency improvement, even on the international side of the business. So overall, the trending should not change very differently. All the quarter to quarter, you know, the numbers would change based on actual recovery.
spk01: Great. Thanks a lot and all the best.
spk00: Thank you.
spk05: Thanks so much.
spk00: Thank you, Gaurav. The next question is from the line of Prashant Katari. Prashant, you can unmute yourself and ask the question.
spk04: Yeah, thank you for giving me the opportunity. So I had questions on hotels as well as bus in terms of the growth that we've seen on the unit metric side. So hotels is just about a two to three percent growth and bus is actually a drop. Can you explain what is happening there? Because I believe the market should probably be growing faster than that. But maybe I'm wrong.
spk06: Yeah, maybe I can take that, Prashant. No, observation is not off, Prashant. But the reason is, and even if you look at even historically, you would always see that, you know, the overall recovery coming out of the waves. You know, this quarter, mind you, as we highlighted, was actually January, February, a large part of the quarter was impacted by Omicron. And when we see the recovery, the first segment to recover is always flights. And then it starts, you know, then hotels and then bus sort of fall in place. And specifically for bus, you know, it is also a function of, as we were also highlighting in the script, it was also a function of some of the use cases, which is effectively linked to the, you know, office going people, which is effectively linked to the, you know, opening of the offices, which has happened only very recently. And, you know, there are some specific reasons why it takes a little bit more time. There's a lag effect for bus recovery, and which is exactly what we are seeing in current quarter. So it's just a matter of, you know, this recovery happening with a little bit of a lag effect, both for hotels and bus and nothing else. And, you know, we are currently seeing that robust recovery coming on both hotels and bus in the current quarter.
spk04: Okay, thank you for that. And the other question was just on the profitability side, any new thoughts in terms of how much margins do we want to achieve by when? Because you would obviously notice what is happening globally in terms of investor expectations are rising in terms of higher profitability sooner rather than kind of waiting forever. I mean, any thoughts that you have in terms of maybe an improved guidance on that front would be great.
spk05: Sure, Prajan, maybe I can take that, you know, and just to kind of, you know, add to what color Rajesh had shared on the previous question, just also wanted to call out that, you know, the, actually the, you know, the, on the hotel side, like we've been saying, the recovery has been a bit slow in the budget segment of hotels. And as you would recollect, you know, close to about, you know, 50% of our volumes used to come in from the budget segment. where we are seeing, you know, gradual recovery. Whereas if you actually look at the mid to the premium segments, I think we're kind of already sitting at, you know, close to pre-pandemic or higher than pre-pandemic kind of, you know, volumes. So that's one of the reasons why the overall recovery, particularly on the segment side, you know, kind of, you know, because the volume numbers on the budget are much more, the recovery looks a little muted in hotels because of the budget segment per se. In fact, the recovery in gross bookings is much better than it is on the segment side, you know, for the same reason. I thought I'll just call that out. On the profitability side, like you could have seen, I think through the year, at least, you know, our guidance, you know, for the last fiscal year was that Considering the kind of, you know, waves that we're seeing on the pandemic side, and last year saw two pandemic waves, you know, one in the first quarter and the second, you know, overlapping between the third and fourth, our call out was that we would like to be in that, you know, plus or minus $10 million range. Highly impacted quarters could see small negative adjusted operating losses, whereas, you know, the good quarters on recovery we could possibly be at the top end of the range. And if you see this quarter also, the last two quarters, we've kind of beaten the top end of the range of $10 million. This quarter was also higher and the previous quarter was also higher. So I think on the fact that we would like to accelerate the profitability, I think we've kind of seen that come through. I think now it's going to be more a question of trying to drive back the 100% recovery, including on the international side, and also drive growth momentum beyond the pre-pandemic kind of levels. And while doing so, I think we'll be more focused on ensuring that the operations remain profitable. We don't really kind of are in a hurry in terms of driving profitability as a percentage of gross bookings. I think if we kind of are able to get to even like, you know, a mid single digit of, you know, profitability on the, on the, on the, on the, on the net profitability side, that would be our aim right now. It's kind of, you know, much better off if you see on, on gross bookings, we are kind of, you know, where we have a blended margin of about 11 odd percent currently are, And just operating profits are kind of, you know, more than one percentage points. I think even if they kind of are able to maintain this at about half a percentage point level or thereabouts, that should trend well and allow us to kind of keep reinvesting behind growth and keep reinvesting behind the, you know, the adjacent areas of future growth that Rajesh has called out.
spk04: I mean, our concern is that you have been in the business for 20 years and you have to kind of make a decent profit on the net bottom line. I mean, there would come a point where maybe you'll also get disrupted and we would rather that you kind of make some nice cash profits before that eventually happens. I mean, there is that maybe a nice time window out here today when the competition is low, when the travel is recovering and when the hotels and airlines want these passengers and customers to come in, which is when you could be looking to make profits. Maybe this window will not kind of last forever. That's the only concern we have.
spk05: No, of course. And, you know, partly to kind of look at it in a. While the business has been in operation for 20 years for all practical purposes, the domestic business started only about 15, 16 years back. And within that, if you see the business, which is kind of predominant at that point in time, which is a ticketing. that is probably, you know, as profitable, you know, as the biggies in the OTA market globally, right? Whereas if you look at some of the other segments beyond a-ticketing, like hotels, etc., we have been, you know, in that segment only for about five to seven years, you know, for all practical purposes and therefore, you know, the larger mix of the business now is coming in from non-e-ticketing segments and these non-e-ticketing segments have been kind of, like I said, been only in play for the last five, seven years. And therefore they'll need time to kind of, you know, get into mature phase of, you know, profitability, but they'll definitely get there, you know, over the, over the time period of say the 10 to 20 years that you're looking at. So I think we're very short of that on the other segments. E-ticketing clearly is comparable and is on that path already. Some of the other segments will get onto that path and overall take the profitability higher for the blended business.
spk04: All right. Thank you.
spk00: Thank you, Prashant. The next question is from line of Vijit Jain of Citi. Vijit, you can please unmute yourself and ask your question.
spk02: Thanks Whipple. So my first question is any impact you're seeing in your customer acquisition costs from the new Apple privacy rules? And do you have any sense of any impact that could happen from whatever Google might do? And related to that, do you think that impacts some of your global competitors like booking Airbnb? Should they decide to come back into India at some point now that international is recovering?
spk06: Yeah. Hi, Vijit. Maybe I can take that. On the first question, the answer is no. We haven't really seen any impact yet. And, you know, and we'll watch this space as it goes. You know, and it's also the fact, Vijit, that as we've been sharing earlier as well, that we do have a very high share of direct traffic, direct slash organic traffic. on our platform, you know, given the fact that the brands have been pretty strong over the years. And this is across all three brands that we have. So, you know, the short answer is so far we haven't really seen any impact and we'll see how it goes. As far as your second part of the question is concerned, you know, Booking.com and Expedia or any of the international OTAs, And see, they have been around. I mean, they've been around for many years. And maybe during the pandemic, the focus was, given the international borders had not really opened up, our focus was more in their core markets. But, you know, for the last couple of quarters, they are active and they will continue to be sort of active in the domestic market as well. And from our point of view, you know, our strategy and execution roadmap is pretty focused on continuously sort of keep improving the customer experience, making sure that the supply depth is there, making sure that our penetration goes to tier three, tier four cities. There are a bunch of investments that we made during the pandemic on, you know, sort of going out and reaching out to the different demand segments as we highlighted, you know, even the non-direct B2C segments, etc. All of these investments that we've made in the last couple of years are only going to help. Additionally, it's also, you know, all the adjacent cases that we have, you know, we've sort of invested behind through TripMoney and all. Now, all of them are just going to help us get more and more new users and more and more established our branch further on consumer's mind in terms of, you know, just the comprehensive shop for travel use cases of all kinds. and even enabling travel use cases, including consumer lending and so on. So I guess we will continue to keep staying focused on our, you know, executing our strategies. And, you know, healthy competition is always welcome and we keep sort of dealing with it.
spk02: Thanks, Rajesh. My second question is on the My Affiliate program that you talked about. So first off, so is that across all segments already? That is, you know, bus, train, air, as well as hotels. And a related question with that is you mentioned phone pay. I'm just curious, given that phone pay is a part of Flipkart, which has ClearTrip. How does that work in that sense?
spk06: Interesting. You know, the first part of your question is to start with flights and hotels. And we can always add more services as we go along. But to start with the flights and hotels, we do have Redbus independently, by the way, powering Amazon Pay even before, you know, this Mi'kmaq trip, you know, affiliate alliance that we had. And so the bus was already there. Bus was already there on phone pay as well. We don't have rail yet, but, you know, potentially we can add and maybe we can add the other ground transport, et cetera, as well as we go along. And, you know, the second part of question, Vijit, is that, you know, operationally, otherwise phone pay and Flipkart, you know, sort of run are being run completely independent entities. There was absolutely no sort of concern. There are different business models, differently and independently run outfits. And there were no concerns because we were in any case using phone pay even historically, just to get the new user acquisition from them, like many other players in the market would be using them. And, you know, this was an opportunity to see if we can sort of exclusively power them from a, you know, from flights standpoint and subsequently hotels as well. And therefore we went ahead and done it, but we don't have any sort of such concerns, them being having the same ultimate parent and so on.
spk02: Thanks, Rajesh. So if I can just squeeze in one final question. You mentioned some of these investments during the pandemic, right? And I was just sorry if this is already clarified in the filing, but I see your net cash generated from or used in investing activities is around 119 million for 2021, went to 78 million in 2022. If you could give a broad stroke overview of what this is.
spk05: Maybe we could take that as a follow-up.
spk02: Yeah, sure. Thank you. Those were the questions.
spk00: Thank you, Vichit. We have now a question from Sachin Dixit. Sachin, you may please ask your question now.
spk03: Sure. Hi, Rajesh and Mohit. Thanks for your time. I have a quick question on the customer side, right? So customer behavior and customer loyalty. So one like if you can provide some color on your MMT black programs, how are they going on like our customers willingly paying or it's mostly getting passed on as like bundled bundle cost with the credit cards and etc. Secondly, can you do it like do you have any color on the wallet share that a customer is spending on them? I do understand the repeats and all are pretty good. But any color on, like if on the overall wallet share, then a typical loyal MakeMyTrip customer is spending on MakeMyTrip.
spk06: Sachin, your voice was breaking, but I heard part of your question, and I think it was to do with our loyalty program, Black program. And let me try and address that. You know, so our loyalty program, Black, MMT Black on MakeMyTrip and GoTrips on Goi People is actually doing very well. I think overall, over the years from all the learnings in the past, we've been able to effectively crack the code on the loyalty program for an intermediary like us that has been now working quite effectively. We continue to keep growing the number of users. And I can give you just one sort of data point that will support what I just said. you know, our repeat rate on in general overall platform versus the repeat rate coming from the black, you know, loyal members, coming from the black loyal members is about 20% higher than the normal non-black members. So which is, you know, sort of a good measure to test that how the program is working effectively or not. So clearly from a consumer behavior standpoint, when they see the value, When they see the value, the real value, tangible value coming through, you know, as part of the loyalty program, there is clearly traction to that program.
spk03: The next question that I had was on the customer wallet share color. So any context on how much of the wallet share is the customer spending on MakeMyTrip?
spk06: Yeah, no, I think it's a very good question. And part of the reason why we are a comprehensive shop is that the goal behind the scene is to get more and more wallet share for practically every travel use case that the customer might have. So just to give you an example, from a cross-sell upsell standpoint, we see a lot of the flight bookers end up buying hotels with us and vice versa. And a lot of the, you know, we've been acquiring a lot of the new users on our rail platform. And from rail platform, we have started to now very effectively sort of also offer bus as a cross-sell option as well for a lot of the, let's say, for example, wait-listed customers on rail, which is like a very big use case in India. And then you end up doing that. So basically what we are trying to do is to, from a customer point of view, take a view with the customer at the center and think about possible every travel use case that he would need from his point of view or she would need from her point of view in that session. or in the subsequent sessions or, you know, during the course of the time, right? And will we be able to sort of address every possible need or not? And, you know, the direct output of that would be that we'll get more and more wallet share from one particular customer over time. That's really the idea. We haven't really have any sort of, you know, the actual wallet share reported out, but over the next few quarters when we have more data on this, given that the cross-sell and upsell is effectively picking up across the platform, we should be able to give more color on that.
spk03: Great to hear. Thank you.
spk00: Thank you, Sachin. If anyone has a question, please raise your hand. Otherwise, we have no other person in the queue. We'll just wait for a few more seconds if anyone has any question. All right. Thank you very much. We have no more questions, Rajesh, in the queue. So we can end the call with your closing remarks. Thank you.
spk06: All right. Thank you, everyone. Thank you for your time for the call today. Stay safe and healthy. Thank you so much.
spk00: Thank you. You may please disconnect.
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