MakeMyTrip Limited

evening everyone we'll just give a minute for people to join and then we'll start thank you

We'll start now. Hello, everyone. I'm Bipul Garg, Vice President, Investor Relations at MakeMyTrip Limited. And welcome to our fiscal year 2023 second quarter earnings webinar. Today's event will be hosted by Deep Kalra, our company's founder and chairman. 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 remarks, 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 U.S. 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 20F filed with the SEC on July 12, 2022. 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 to Rajesh for his comments. Over to you, Rajesh.

Thank you, Vipul. Welcome, everyone, to our second quarter earnings earnings call of fiscal 2023. To start with, just a couple of key performance highlights of the quarter. While the reported quarter was a seasonally weak period for leisure travel, we delivered strong results with gross bookings growing by 126.3% year-on-year on constant currency basis. EBITDA for the quarter was at $10.7 million and as compared to an EBITDA loss of $0.6 million in Q2 fiscal year 2022. And adjusted EBITDA or adjusted cash operating profits stood at $18.7 million as compared to $10.5 million in the same quarter last year. COVID-19 infections in India have steadily come down and continue to be mild. Hence, the impact of pandemic on travel decisions was negligible during the quarter. However, The inflationary pressure and visa issues are holding recovery momentum, especially in outbound international travel. As shared earlier, high fuel costs and inflationary pressures led to high airfares during Q1. While we witnessed some moderation in crude oil and ETF prices towards the end of Q2, for a large part of the quarter, fares remained high. Domestic leisure traffic has recovered more than 100% of pre-pandemic levels and continues to be strong. As per DGCA data, overall domestic daily flown passenger market has recovered to 85%. We are recovering faster than the market at 98% as compared to same quarter pre-pandemic. As a result, despite headwinds on outbound travel, we delivered more than 126% recovery on air gross bookings and 117% recovery in overall gross bookings on constant currency basis compared to the pre-pandemic Q2 fiscal year 20 quarter. As stated earlier, consumer sentiment continues to stay positive in terms of willingness to travel, and therefore fares getting rationalized with full restoration of passenger carrying capacity can aid to full recovery in outbound international travel in the next few quarters. While travel industry continues to navigate short-term macro headwinds with resilience, The medium to long-term outlook for travel and tourism in India remains robust. Government of India estimates that by 2030, tourism sector will contribute $250 billion to India's GDP, up from $150 billion in 2024. And the aspiration is to take this contribution to $1 trillion by 2047. Ministry of Civil Aviation has projected a phenomenal growth for India's civil aviation, 220 airports by 2030 from current 153, overall fleet size of 1200 planes from current 700 in next five years, and 400 million air travelers from current 200 million in next seven to 10 years. Government is looking to make all the necessary interventions, including investments in infrastructure to promote India as a leading tourism destination, which is great news for the industry and us. From demand perspective, India is the second most populous country in the world and an underpenetrated market for travel. Propensity and willingness to travel is steadily increasing, fueled by a growing Indian middle class. Middle class households are expected to reach 330 million in 2030, from 166 million in 2018. Also, digital revolution in the country continues, leading to ever-growing internet and e-commerce penetration. Over the last decade, internet penetration has increased from 11% in 2012 to 47% in 2022. And e-commerce users have increased over 19 times from 10 million users in 2012 to 190 million in 2022. Recently, 5G services were also launched in the country. That should further accelerate this trend with high-speed internet enabling, richer content and higher e-commerce adoption. We have been at the forefront of this digital revolution as well. And through the years, we have invested and facilitated online penetration across different travel segments. We continue to digitize various travel use cases with our robust multi-product platform with an aim to deliver best user experience and value. Coming to business segments now, starting with Airbusiness, we continue to maintain our leadership position in market share on the back of innovative products and industry-first features. We recently launched Quick Book feature for our frequent flight bookers. This feature leverages the user's previous booking history and provides their most preferred flight options, thereby helping them complete the flight transaction lightning quick. We continue to build on our new stack of products and features based on data science models. And our zero cancellation product is seeing very good traction among amongst travelers. We have recently extended the zero cancellation product for international flights as well, where international travelers can now avail a full cancellation penalty waiver by purchasing this add-on product at the time of booking. International travelers who are unsure of their travel plans now also have the option of locking flight prices through our in-house price lock feature by paying a nominal amount. During the quarter, we also went live with HDFC Smart Buy platform where HDFC premium credit card holders can only book to get maximum reward points, but also utilize their reward points on their travel bookings. Coming to our accommodation business, which includes hotels, packages, and homestay segment, we continue to see strong growth on year-on-year basis. We have seen strong recovery in premium and mid-premium segments, while budget segment recovery has been slower. Our share of premium and mid-premium in the overall hotel volumes has increased significantly as compared to pre-pandemic levels that helped overall recovery to be almost 100% in hotels and packages, gross booking as compared to pre-pandemic levels on constant currency basis. Pandemic has also changed travel habits to a certain extent, In addition to annual holidays, more and more people are now taking multiple short holidays on long weekends and traveling to nearby getaways, giving a boost to domestic tourism. For instance, in August, we touched our all-time high of single-day check-ins on the Independence Day long weekend. We continue to innovate and launch industry-first capabilities to serve our customers with best quality experience. We launched our new flexible payment option for users, which allows customers to book hotels without any upfront payment. We offer it to all customers across a broad base of properties. Customers who plan their trips early have found this as a perfect feature, thereby increasing our share of future bookings. Additionally, in our endeavor to tap the group booking customer segment, we also... launched a dedicated funnel for group bookings, five or more rooms, besides the price benefit. The product also innovates around payment policies, meal selection, etc. to make it easier for the customers to do group booking online. During the quarter, we relaunched our Ghost Days program, which offers top-rated affordable properties to customers. It comes with a money-back guarantee across over 2,000-plus properties pan-India, which covers our main promise of hassle-free check-in with clean rooms, TV, AC, and free Wi-Fi. We continue to add more properties as we build on customer experience in the budget segment. We also launched our new use case of hourly stays with about 3,000 properties in 109 cities to cater to the short stay use case. Customer will now have flexibility to choose stay options as per their needs for three, six, or nine hours with a price advantage. As mentioned earlier, homestays have been gaining popularity among consumers in India, and we are investing behind creating more awareness of this category. We recently hosted India's Favorite Homestay Awards, a first of its kind annual celebration to recognize and reward the growing community of homestay hosts in the Indian market. We received about 2,400 plus nominations. and 15 properties were selected as winners by a neutral jury across various categories. Our domestic packages product has done phenomenally well with 166% growth in domestic volumes compared to pre-pandemic. Encouraged by the growth rate, we have ramped up our holiday experts team from 700 at the start of the year to about 1,000 women holiday experts now. This team operates on a variable cost structure, We also grew our franchise channel from 110 partners to about 140 active partners now. Coming to our bus ticketing business, we maintained our recovery momentum in the seasonally week quarter. Our overall bus business gross bookings in quarter two recovered 211% of quarter two fiscal 20 levels in constant currency terms. Product related, initiatives continue to focus on driving new customer acquisition and better user experience. We launched a Hindi booking funnel in Redbus as the first step towards full localization. Also, more than 80% of Primo bus operators were onboarded for the instant refund program, which resulted in issue closure turnaround time improvement from over three days earlier to less than six hours now. Our other ground transport services, such as intercity cabs, rail tickets, et cetera, continues to scale well and have already surpassed pre-pandemic volumes. This business contributes significant new users each quarter to both MMT and GI platform. Major part of this new traffic comes from the non-English speaking tier 2, tier 3 cities, thereby expanding the reach of our offering to newer geographies and user segments. In March 2022, we launched the standalone lightweight Red Rail Android app for rail ticketing and info services. As of September, the app crossed 1.7 million installs and 300,000 monthly active users with an app rating of 4.25. For airport transfer use case, we had entered into an exclusive partnership with BlueSmart offering customers 100% electric, hassle-free, guaranteed an on-time pickup and drop experience at Delhi airport. Post the launch, we are witnessing a pickup in transactions. Our attach rate has increased by over 20% with an NPS of 62%. My partner, our other B2B2C demand channel, added 3,940 travel agents during the quarter, thereby increasing the penetration into underpenetrated areas of the country and taking the total count to about 32,000 by the end of the quarter. Domestic corporate travel is now coming back to near normal and both our MyBiz and Q2T platforms catering to this demand segment continue to grow very well. Our corporate business is now more than two times of the pre-pandemic levels in terms of gross booking and continues to scale. We have been adding new customers on both MyBiz and Q2T platform, and the active corporate count has now reached over 39,000 small and medium corporates on MyBiz and 209 large corporates on Q2T, which is almost double as compared to pre-pandemic customer base. On product side, we have recently added capability to enable easy integration with the expense management and client's ERP platform. We have also further strengthened supply of both flights and hotels to bring more value to our corporate customers. Our GCC business continues to scale organically. Gross booking value this quarter has grown over nine times, albeit at a lower base, as compared to same quarter last year. During the quarter, we launched our first digital-only brand campaign with the Unmatched Delights theme This campaign resulted in a sharper uplift for both flights and hotels. Before I wind up, I would like to reiterate that travel continues to rebound on the back of waning COVID infections and positive consumer sentiment. We have inflation-led macro pressure right now, but medium to long-term outlook of the industry look very robust. At Micmartrip, we are pleased to deliver consistent, strong performance both in terms of revenue and profitability. And we continue to believe that as a leading travel company, we continue to garner a major share of future growth in demand on the back of our robust multi-product platform and customer-first approach. With this, let me now hand over the call to Mohit for financial highlights of the quarter.