MakeMyTrip Limited

We're just giving one minute for all the attendees to join in. Hello, everyone. I'm Vipul Gaik, Vice President, Investor Relations at MakeMyTrip Limited, and welcome to our Fiscal 2025 Second Quarter Earnings webinar. Today's event will be hosted by company's leadership team, comprising 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 website shortly after the conclusion of today's event. And 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 changed circumstances. Additional information concerning these statements is contained in the risk factors and forward-looking statements section of the company's annual report on form 20F filed with the SEC on July 2nd, 2024. Copies of these filings are available from the SEC or from the company's investor relations department. I would like to now turn on the call over to Rajesh. Over to you, Rajesh.

Thank you, Vipul. Welcome everyone to our second quarter call for fiscal 2025. We are pleased to report another quarter of strong business results with robust growth in the top line and bottom line. Gross booking value for the quarter stood at 2.3 billion, registering strong year-on-year growth of 24.3% in constant currency terms, adjusted operating profit at $37.5 million, registered a year-on-year growth of about 33%. We managed to deliver this strong performance across all our business segments, leveraging our brand and distribution strength. And despite the short-term headwinds due to unusual heavy rainfall that impacted demand momentum a bit in an otherwise traditionally low season quarter for leisure travel. We've been consistently outpacing the industry's growth on the back of continued supply side expansion, catering to a variety of travel needs of the Indian consumer. implementing several AI and data science driven product features, leading to personalized recommendations to improve customer experience and high proportion of repeat customers. On the macroeconomic front, India's strong growth trajectory remains a compelling narrative on the back of advancements across sectors. As per IMF estimates, India is expected to become the world's third largest economy by 2027 after the US and China. The economic rise is fueling the growing consumer class, leading to higher discretionary spending. Travel and tourism industry is one of the biggest beneficiaries of this increased discretionary spending. Furthermore, our younger generation aged between 25 and 34 are increasingly willing to travel and explore more. A fifth of the population will age into that group soon, helping the travel segment to grow further. As per Bernstein estimates, The annual spending on foreign travel by Indians will nearly triple to $89 billion in three years. The number of valid Indian passports has also nearly doubled from 52 million a decade ago to 93 million this year. On the other hand, India's digital economy has been tagged as one of the fastest growing in the world and the government's path-breaking Digital India initiatives are playing a critical role in increasing internet and e-commerce penetration. We've been capitalizing on some of these macro trends by constantly improving our product and value proposition for the international outbound travel market. We enhanced the business class funnel experience for international flights and have revamped the premium economy class booking flow as well. The new funnel features rich visuals and detailed amenities delivering a premium and seamless booking experience that aligns perfectly with the high-end services offered. Similarly, for international hotels, we are enhancing supply and offering options that are relevant to Indian consumers. On the customer journey flow side, we have been dialing our features that cater to the unique needs and preferences of Indian consumers, for example, culinary preferences, family-friendly services, etc., thus offering a more personalized experience. As a result, our international air ticketing business and international hotel business continue to witness faster growth than the industry. International air ticketing business posted year-on-year revenue growth of over 39% in constant currency terms and now accounts for 38% of the adjusted margin in the air ticketing business compared to 33% in the same quarter last year. Our international hotels outbound business revenue grew 62% year on year in constant currency terms and now accounts for about 17% of the adjusted margins from this segment compared to 12.5% in the same quarter last year. We are not only growing in our traditional markets like Thailand, Singapore, the Middle East and Malaysia, but also in newer destinations like Georgia, Vietnam, Hong Kong, Azerbaijan, Kazakhstan, etc. During the quarter, we sold 32,000 plus international hotels across 2,384 cities in 165 countries, which is the highest ever spread achieved till now. Total air ticketing business witnessed strong growth. Adjusted margin grew by 21.1% year-on-year in constant currency, despite persistent supply issues in the domestic market. Our accommodation business overall, which includes hotels, homestays and packages, continues to grow at a robust pace as well. We recorded 21.4% year-on-year growth in the adjusted margin on a constant currency basis. As mentioned earlier, the prolonged monsoon along with the significant increase in heavy rainfall had impacted demand during parts of this quarter. However, our combined strategy of supply side expansion and sharper targeting of a variety of customer segments with multiple distribution channels has helped us grow in the 20s. In our holiday packages business, growth was led by emerging destinations like Australia, Japan, and Egypt. During the quarter, we partnered with Legoland Malaysia resorts to offer holiday packages with a unique blend of Lego adventures. and rich Malaysian cultural experiences. In our bus business, we continue to see broad-based growth across all regions in the country. On the product side, our localization push continues with launch of Telugu Funnel on Android and extending the Tamil Funnel on the mobile web. Bus ticketing in some of the international markets where we are present continues to grow faster with the contribution of revenue from international markets now reaching 12% of the total bus revenue compared to 10% in the same quarter last year. Our investments in other transport services such as intercity cabs and trains helped us to deliver 17.6% quarter-on-quarter growth in constant currency in a seasonally weaker leisure travel demand quarter. Our corporate travel business via both our platforms, that is MyBiz and Quest2Travel, is witnessing strong growth. Our active corporate customer count on MyBiz is now over 59,000 plus. And for Quest2Travel, the active customer count has reached 462 large corporates. We continue to enhance our product capabilities. We completed over 60 integrations with travel and expense management solution partners like Mike Lames, Darwin Box, Zoho, and FastCollab. We also went live with complete self-serve HRMS integrations, connecting more than 200 organizations through the HRMS connector to enable better management of travel expenses. On Q2T, we introduced the official Q2T mobile application, providing greater accessibility and convenience for corporate clients. Overall, we now have a lifetime transacted user base of 77 million customers across all our three brands. We continue to deepen engagement with our existing customers and add new customers to the platform every quarter. To help consumers make all their bookings on a single platform, we have launched a considerably improved connected trips experience, completely built in-house on the strength of our data science capability enabling consumers to book other products and services needed for the trip. It is helping us drive cross-sell and upsell other services. As part of our retention and loyalty strategy, we revamped our MMT Black program on MicmaTrip and GoTribe loyalty program for our GoIbibo customers last quarter, with more relevant inclusions like meal and room upgrades, airport pickup, F&B offers, et cetera, for our customers. This quarter, we launched our new co-branded credit card in partnership with ICICI Bank, which is one of the leading private banks in the country. With its impressive value proposition, this should help us drive both new customer acquisition as well as repeat transactions on our platforms. Before handing over to Mohit, I want to provide an update on our initiatives regarding the deployment and adoption of GenAI, a core part of our innovation strategy. Last quarter, we introduced our GenAI chatbot Myra on our international flights funnel. The initial response has been encouraging, with Myra successfully handling queries on topics such as date changes, flight details, and end salaries. This quarter, we have launched Myra to enhance the hotel and homestay booking process by offering real-time assistance, leveraging generative AI, and years of proprietary data, including customer reviews, The chatbot delivers accurate and personalized responses to even the most detailed inquiries. We plan to further expand its capabilities to handle pricing and availability queries, as well as provide personalized hotel recommendations. This aligns with our strategy of using AI-driven solutions to boost customer satisfaction and drive growth. Similarly, our AI deployment initiatives have been very successful in addressing pre-journey queries on the Redbus app via the GenAI-based bot, which has not only resulted in an improvement in customer satisfaction scores, but also productivity gains with an almost 45% decrease in the involvement of customer service agents. With this, let me hand over the call to Mohit for the financial highlights of the quarter. Thank you.

Thanks, Rajesh. And hello, everyone. We have achieved another quarter of growth in the 20s, showcasing strong performance across all business segments. Gross bookings for the quarter came in at $2.3 billion, compared to $1.8 billion in the same quarter last year, reflecting a 24.3% year-on-year growth in constant currency. Revenue growth as per GAAP came in stronger at 26.5% year-on-year in constant currency. This performance is particularly noteworthy given the ongoing supply challenges in the domestic air market and the impact of unusually high rainfall during this monsoon season in India. Moving on to our segment results, our eight ticketing gross bookings for the quarter came in at $1.4 billion, witnessing an year-on-year growth of 20.4% in constant currency. Existed margin stood at $96 million, registering a growth of 21.1% in constant currency. We continue to expand both our domestic and international outbound business. While Rajesh has updated about the continued outperformance in the international ticketing side, let me share some more color on the domestic air ticketing business. In the domestic air ticketing market, while supply was broadly at similar levels in the last quarter, the market growth peaked up marginally to about 6% year on year on flown basis. We continue to grow faster. Then the market and our market share stands strong at 30% plus in the domestic flight ticketing business. Gross bookings for our quarter in the hotels and packages segment came in at about $517.2 million, registering a growth of 21.2% year on year on constant currency basis. Adjusted margin growth was 21.4% year on year in constant currency terms, resulting in adjusted margin of $90.7 million during the quarter. While the last couple of years have seen higher than inflationary increases in room rates, this year we are seeing that the room rates have started stabilizing and price increases have moderated. We continue to drive supply expansion by going deeper and wider in the Indian market and growing directly contracted hotels in key international markets which are of interest to Indian travelers traveling overseas. As a result, we now offer over 84,000 domestic accommodation in across 2100 cities through the length and breadth of the country. We are scaling our direct contracting for international hotels in line with demand trends and now have directly contracted hotel supplies in over 40 international cities up from about 21 cities last year. In our bus ticketing business, gross bookings for the quarter stood at $263 million, growing at 21.5% year-on-year in constant currency terms. Adjusted margin stood at $27.1 million, registering a year-on-year growth of over 25.6% in constant currency terms. The take rates in our business continue to remain stable and in line across all our business segments, that is air ticketing, models and packages, as well as bus ticketing. Similarly, our customer allocation costs, that is marketing and sales promotion expenses, remain efficient and in line with the same quarter last year at 4.6% of gross bookings. This is slightly lower than the 4.8% in the previous quarter linked to change in seasonality. In addition to driving strong bookings and revenue growth, we remain focused on building operating cost efficiencies and driving operating leverage in our fixed costs, including personal expenses and general or administrative selling expenses. As Rajesh has already highlighted, the significant deployment of GenIA in some of these areas Accordingly, our registered operating profit for the quarter came in at $37.5 million, registering a year-on-year growth of 32.9%. Our cash generation continues to be robust, and cash and cash equivalents at the end of the quarter have now gone beyond the $700 million mark. Besides maintaining a healthy war chest, we will continue to leverage this strong cash position to invest in potential organic and inorganic opportunities. We had called out our intent to pursue opportunistic share repurchase or buyback programs at the start of this year. While we could not manage any meaningful repurchases during the reported quarter, we remain committed to the program. With that, I would like to turn the call back to Vipul for Q&A.