MakeMyTrip Limited

I'm the head of investor relations at MakeMyTrip. We'll just wait for the attendees to join for a few seconds. Hello everyone, I'm Vipul Garg, Vice President of Investor Relations at MakeMyTrip Limited and welcome to our fiscal 2024 first quarter earnings webinar. Today's event will be hosted by a company's leadership team, comprising of 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 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 change circumstances. Additionally, Information concerning these statements are contained in the risk factors and forward-looking statements section of the company's annual report on Form 20-F filed with the SEC on 25th July, 2023. 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. Over to you, Rajesh.

Thank you, Vipul. Welcome, everyone, to our first quarter call of fiscal 2024. We've started this financial year on a strong footing as evident from our Q1 results. Travel demand was robust in the leisure-heavy seasonal quarter, despite high fares due to short-term supply-side challenges in the aviation market. We witnessed strong traction in leisure travel during the quarter, aided by seasonality coinciding with summer holidays, while business travel continued its recovery trajectory. All segments have now grown beyond pre-pandemic levels, as a result of which we have posted our strongest ever quarter, both in terms of gross bookings and profitability. Gross bookings for the quarter reached an all-time high mark of approximately $2 billion, growing at a faster pace than market growth rate. Our adjusted operating profit or adjusted EBIT of $30.1 million and gap profit after tax of $18.6 million were also record milestones for us. India is still an underpenetrated travel market and is well poised for long-term growth. Despite the challenges posed by the pandemic, the sector has demonstrated remarkable resilience and adaptability. Other macro factors in India, like strong GDP growth, growing earnings in the hands of middle-class population, increasing propensity to travel and improving transport infrastructure and last mile connectivity will help fuel travel sector growth in India. Consumer preferences are evolving and experiencing travel is now increasingly emerging as one of the preferred areas to spend from the growing disposable income in the hands of consumers. As a result, both domestic tourism and international outbound travel are expected to grow at a faster pace in the next 10 years compared to the last 10 years prior to the pandemic. Infrastructure investments are aiding domestic tourism growth, while the aspirational Indians are looking to travel to various international destinations. As per the IPK World Travel Monitor, India generated Asia's highest outbound travel volume for the first time in 2022, exceeding those of China, South Korea and Japan, partially aided by lagged recovery of outbound travel in China. All major Indian airlines have placed record number of orders for new planes to cater to this demand. Similarly, all hotel chains have announced expansion plans thus increasing the supply over time. We continue to stay excited about the future opportunity and geared up fully with focus on leveraging new technologies to provide more convenient and personalized experiences for travel planning and booking. Our depth of travel-related offerings, quality customer experience, powered by robust tech and product innovations, along with strong brand strength, are helping us cater to the evolving consumer preferences and stay ahead of the market. As for business segments now, starting with air business, we witness strong growth in air ticketing driven by leisure travel during this high season quarter and continue to record 30% plus share in the domestic flown passenger market. Domestic supply was affected during the quarter due to go first issue leading to higher airfares. The supply gap was partially offset on account of higher load factors and additional supply deployed by other airlines. With the DGC approval granted to go first for the resumption plan, and additional aircrafts expected to arrive for other airlines, we hope to see supply situation improving in the coming quarters. Seasonal demand also helped our outbound travel segment finally recover to pre-pandemic levels after almost three years. While long-haul destinations still haven't recovered fully due to supply constraints and visa-related issues, short-haul international travel has surpassed the pre-pandemic levels. We expect the overall international air ticketing segment to keep growing as the supply situation eases further. We continue to innovate our product to cater to a larger variety of use cases. During the quarter, we launched an inspirational travel discovery product called Incredible India at Incredible Prices. which offers results to leisure travelers about the most economical airfare to multiple destinations in India from their chosen origin destination. The early results are encouraging as we have observed a significant increase in searches for leisure destinations on the Incredible India funnel. During the quarter, we also launched an industry first student festival for international flights in June, offering special relevant benefits to students traveling to international destinations for their college studies. coinciding with commencement of academic session during the period. This was highly appreciated and helped us increase our student-led contribution to overall business. Our accommodation business, which includes hotels, homestays and packages, witnessed strong growth this quarter, aided by robust demand in both leisure and corporate travel. We continue to focus on supply expansion and improved discovery as a result, During this quarter, we sold 56,000 plus unique properties in more than 1,700 cities, which is the widest spread achieved in the business. This supply expansion with improved personalization in search results has helped us in improving online buying behavior in an underpenetrated category. While our gross booking value crossed pre-pandemic levels a few quarters back, during this quarter, room nights have also recovered to pre-pandemic levels. We've also seen good momentum in our international hotel business in line with the recovery in outbound travel. Many countries like UAE, Indonesia, Vietnam, Maldives have already surpassed pre-pandemic volumes. We introduced a few industry-leading features in hotels to continue our journey of ensuring delightful and high-quality experience for the end consumer. Book With Zero Payment was launched last quarter, which received a fantastic response from our users. With no upfront payments required, customers can now confidently plan their trips in advance, benefiting from exclusive deals and avoiding price fluctuations. This innovative feature has particularly helped to improve adoption rates in tier two and tier three cities. We continue to scale our homestays business with increasing coverage of leisure destinations. Learning from consumers' insights, we have enhanced our offerings for consumers to get finer details around meal options, such as availability of chef at the property, meal options, kids meals, extended cooking kitchen amenities at one place before booking. This is helping us to specifically target meat to meal premium segment of stays. Our packages business witnessed strong growth this quarter. We successfully conducted three campaigns during the quarter, thus helping us scale the business significantly. We have partnered with Europa Mundo, a leading global player in tourism and travel industry, for bringing the latest international holiday packages to India online. With this partnership, over 600 new itineraries will be added to MakeMyTrips' existing catalogue of nearly 5,000 holiday package options. The partnership further strengthens our portfolio and bolsters our capability to unlock global destinations, and new combinations to cater to every traveler's preference. Our bus ticketing business continues to deliver strong results. Q1 saw a significant addition of supply across the country. Our daily life schedules or supply for private bus operators has increased significantly. Owing to high occupancy across most regions during April and May, we expect fleet additions to be strong in the second half of the year. Our other ground transport services, such as intercity cabs, rail tickets, et cetera, continue to scale well. This segment is helping us acquire new users for the platform. We are gaining market share in the rail ticketing business. Organic downloads for standalone red rail app with an app rating at 4.5 continues to be high on both iOS and Android. Now, a quick update on my partner and corporate travel business. Our my partner, B2B2C platform, where we offer both flight and accommodation booking, is gaining positive traction from our partners. Our travel partner count is now 38,000 plus and expanding every quarter. We recently launched MyPartner in GCC, and we already have more than 1,000 partners live on the platform. Our corporate travel business is scaling up. Our active customer count on MyBiz is now 49,000 plus, and for Q2T, active customer count has reached 271 with strong addition every quarter. We continue to add more capabilities on our both MyBiz and Q2T platforms. We completed automated integration to multiple HRMS and expense management platforms, thus reducing onboarding time for corporates and simplifying overall travel and expense management for employees. Our OTA business in GCC is growing steadily. Gross booking value doubled over the same quarter last year. Strong momentum in the last quarter was driven by significant progress in building key product features, supply richness, and building new growth avenues. Along with revenue growth, we have been working on improving efficiency in acquisition and pricing management, driving significant improvement in unit economics, while overall contribution of GCC remains small, but showing good traction organically. With this, let me now hand over the call to Mohit for financial highlights of the quarter.

Thanks Rajesh and hello everyone. The strong business performance in the first quarter of the new fiscal year 2024 indicates that the pandemic is now well and truly behind us. Elbit, we continue to leverage the cost rationalization initiatives we had rolled out during the pandemic impacted period. During this period, taking a longer term view, we have also invested behind three or four key strategies or areas which are as follows. Firstly, technology upgrades on the supply side to drive synergies across brands while enhancing the stability and scalability of the underlying platforms. On the customer phasing side, made significant enhancements to deliver highly personalized customer experience driven by data science and machine learning abilities and on the tech backend, and providing online resolution for a wider variety of post sales service requirements. Secondly, increase the travel and travel related service offerings on our platforms to be the one stop shop or travel super app for Indians to explore, book and manage all their travel needs. Thirdly, Supply-side expansion, particularly in the accommodation space, which involved getting more and more hotels and alternative accommodations across price points and across the length and breadth of the country so that our customers can have more options to choose from. Lastly, a sharper targeting of various customer segments by leveraging new generative artificial intelligence tools and scaling up new demand segments by curated platforms to target corporate bookings, as well as increase our outreach, particularly beyond the tier one cities through offline agents and other online affiliates. As a result of the above, the business is well positioned to leverage demand recovery and outpace market growth while improving profitability. We are therefore pleased to report a strong quarter as we begin the new fiscal year 24, both in terms of business growth and profitability. While there were certain supply-side hiccups during the quarter, demand for travel continues to be robust, backed by seasonality and positive consumer sentiment. We have witnessed strong year-on-year growth across all segments, which has helped us achieve milestone numbers in terms of gross bookings, as well as profitability, and this has turned out to be one of our best quarters till date. During the reported first quarter, gross bookings came in at approximately $2 billion, or $1987 million to be precise, witnessing a growth of over 31.4% year-on-year in constant currency terms. We delivered gap EBITDA of $25.9 million for the quarter, witnessing a growth of around 31.7% year on year. EBITDA margin was at 13.2% for the quarter, which is an expansion of about 530 basis points as compared to the same quarter last year. Adjusted operating profit or adjusted EBIT stands at about $30.1 million as compared to $16.5 million during the same quarter last year, an improvement of almost 83% year on year. As already called out by Rajesh, these are our highest ever quarterly numbers during the business. While a sharper focus on profitable growth, we are glad to achieve our medium-term margins targets ahead of our expectations on the back of strong business growth and our continued focus on cost efficiencies. Air ticketing gross bookings for the quarter stood at $1.2 billion, witnessing a growth of 30.9% year-on-year on a constant currency basis. Adjusted margin stood at about $74.5 million, registering a strong growth of 30.4% year-on-year on constant currency basis. Take rates or margins for the quarter stood at about 6.1%. This was lower optically due to the higher ASPs on account of Q1 being a seasonally strong quarter and contraction in margins in line with the supply constraints as a result of the shutdown of operations by one of the low-cost airlines in the country. Gross bookings for the quarter in the hotels and packages segment stood at about $498 million, witnessing a strong growth of 36.5% year-on-year on constant currency basis in line with the demand trends. Adjusted margin for HNP business stood at $85.6 million during the quarter, witnessing a growth of over 36% year-on-year in constant currency terms. Margins for the quarter was 17.2%, an expansion of almost 90 bps over the previous quarter. In our bus ticketing business, gross bookings for the quarter were at $276.8 million, growing at 24.7% year on year on constant currency basis. Existed margin stood at about $27.3 million, registering a strong growth of over 39.7% in constant currency terms. Margins in our bus ticketing business stood at about 9.9% for the quarter. We continue to be prudent and efficient with our expenses, specifically our customer acquisition costs as reflected under the marketing and sales promotions. During the reported quarter, we went live with our brand campaign to drive top of mind recall and accelerate call to action in a seasonally strong quarter. Overall marketing and sales promotion costs for the quarter, including the brand campaign, came in at about 4.6% of gross bookings as compared to 5.1% in the same quarter last year and 5% during the previous quarter. Most of the other operating expenses continue to be in line with the previous quarters. As at the end of this quarter, our cash and cash equivalents stand at about $522 million. Potential deployment of the free cash in future could be in pursuit of growth opportunities or towards capital restructuring via share repurchases. During the last quarter, we had also notified that we have widened our share repurchase plan to include repurchase of convertible bonds. With that, I'd like to turn the call to Whipple for Q&A.