• Gross Booking Value: $2.3 billion, 24.3% year-on-year growth in constant currency.
• Adjusted Operating Profit: $37.5 million, 32.9% year-on-year growth.
• Revenue Growth: 26.5% year-on-year in constant currency.
• International Air Ticketing Revenue Growth: Over 39% year-on-year in constant currency.
• International Hotels Outbound Revenue Growth: 62% year-on-year in constant currency.
• Total Air Ticketing Adjusted Margin: 21.1% year-on-year growth in constant currency.
• Hotels and Packages Gross Bookings: $517.2 million, 21.2% year-on-year growth in constant currency.
• Hotels and Packages Adjusted Margin: 21.4% year-on-year growth in constant currency, $90.7 million.
• Bus Ticketing Gross Bookings: $263 million, 21.5% year-on-year growth in constant currency.
• Bus Ticketing Adjusted Margin: 25.6% year-on-year growth in constant currency, $27.1 million.
• Cash and Cash Equivalents: Over $700 million.
• Customer Acquisition Costs: 4.6% of gross bookings, slightly lower than 4.8% in the previous quarter.

• Warning! GuruFocus has detected 4 Warning Sign with TNL.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MakeMyTrip Ltd (NASDAQ:MMYT) reported strong year-on-year growth with gross booking value reaching $2.3 billion, a 24.3% increase in constant currency terms.
• The company achieved a 33% year-on-year growth in adjusted operating profit, amounting to $37.5 million.
• International air ticketing and hotel businesses showed significant growth, with international air ticketing revenue increasing by over 39% and international hotel business revenue growing by 62% year-on-year in constant currency terms.
• MakeMyTrip Ltd (NASDAQ:MMYT) has successfully integrated AI-driven solutions, such as the GenAI chatbot Myra, to enhance customer service and operational efficiency, resulting in a 45% decrease in customer service agent involvement.
• The company maintains a strong cash position, with cash and cash equivalents exceeding $700 million, allowing for potential organic and inorganic growth opportunities.

Negative Points

• The company faced short-term headwinds due to unusual heavy rainfall, impacting demand momentum in the leisure travel segment.
• Despite strong growth, the domestic air ticketing market only saw a marginal growth of about 6% year-on-year, indicating potential challenges in this segment.
• There is a noted consumption slowdown in certain areas, which could impact future growth, although early signs in the current quarter do not indicate a significant slowdown.
• The impact of geopolitical tensions and macroeconomic factors, such as potential war situations, could affect travel demand to specific regions.
• Pricing normalization in the hotel segment, particularly for international hotels, could pose a challenge to maintaining high growth rates in the near term.

Q & A Highlights

Q: Can you explain the slower hotel booking growth this quarter? Is it due to the unexpected monsoon, and should we expect growth to normalize? A: Rajesh Magow, Group CEO, Co-Founder, & Director: The slower growth was primarily due to excessive monsoon in certain areas, which temporarily disrupted demand. However, this appears to be a temporary issue, as we've seen demand bounce back. Specific destinations like Himachal Pradesh showed robust recovery compared to last year.

Q: Are you seeing any signs of consumption slowdown, especially as we enter the holiday season? A: Rajesh Magow, Group CEO, Co-Founder, & Director: So far, we haven't observed a slowdown in our category. October has started strong, and while it's early in the quarter, the initial signs are positive. We will need to monitor the situation as the quarter progresses.

Q: What are the expected revenue benefits and cost savings from scaling your GenAI, Myra? A: Rajesh Magow, Group CEO, Co-Founder, & Director: It's early days, but we are seeing productivity gains and efficiency improvements, particularly in after-sales service. While the full impact on P&L will take a couple of quarters, we are encouraged by the initial results, including a 45% decrease in customer service agent involvement.

Q: How does the airline direct push impact MakeMyTrip, and how do you view the economics of this trend? A: Rajesh Magow, Group CEO, Co-Founder, & Director: The direct push by airlines is not necessarily cheaper due to high customer acquisition costs. Our focus remains on improving customer experience and offering differentiated features, which helps retain loyal customers. We believe there's room for all channels to grow in the expanding market.

Q: Can you provide insights into your cash utilization strategy, including buybacks and potential inorganic opportunities? A: Mohit Kabra, Group CFO: We have a $150 million repurchase program, with $135 million still available. We are open to increasing this as needed. Inorganic opportunities will focus on both domestic and international markets, targeting new customer segments and expanding operations in regions like Southeast Asia and the UAE.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.