• Gross Booking Value Growth: 26.8% year-on-year growth in constant currency terms.
• Adjusted Operating Profit: $46 million, a year-on-year growth of 38%.
• International Air Ticketing Revenue Growth: Over 32% year-on-year.
• International Retail Revenue Growth: Over 63% year-on-year.
• Air Ticketing Revenue Growth: 20% year-on-year in constant currency terms.
• Accommodation Business Growth: 24.9% year-on-year growth in adjusted margin on a constant currency basis.
• Ticketing Gross Bookings: $1.5 billion, 23.1% year-on-year growth in constant currency.
• Hotels and Packages Gross Bookings: $681.5 million, 23.4% year-on-year growth in constant currency.
• Bus Ticketing Gross Bookings: $328.9 million, 23.6% year-on-year growth in constant currency.
• Operating Profit Margin: 1.76% of gross bookings, improved from 1.6% last year.
• Cash and Cash Equivalents: Over $700 million.

• Warning! GuruFocus has detected 2 Warning Sign with MMYT.

Release Date: January 23, 2025

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

Positive Points

• MakeMyTrip Ltd (NASDAQ:MMYT) reported a strong year-on-year growth rate of 26.8% in gross booking value in constant currency terms for the third quarter of fiscal 2025.
• The company achieved an all-time high quarterly adjusted operating profit of $46 million, marking a 38% year-on-year increase.
• International air ticketing revenue grew by over 32% year-on-year, significantly outpacing industry growth.
• The accommodation business, including hotels and homestays, recorded a 24.9% year-on-year growth in adjusted margin on a constant currency basis.
• MakeMyTrip Ltd (NASDAQ:MMYT) continues to expand its reach with new product features and services, such as part payment options for international air tickets and value bundles for flights.

Negative Points

• The domestic air market faces near-term supply challenges, impacting growth despite MakeMyTrip Ltd (NASDAQ:MMYT) maintaining its market share.
• There is a delay in resolving engine issues for airplane operators, affecting the supply side in the domestic market.
• The take rate for air ticketing has decreased from 6.8% to 6.1% due to seasonality and pricing changes.
• Finance income has decreased materially on a quarter-over-quarter basis, while finance costs have increased, influenced by forex fluctuations.
• Despite robust growth, the company acknowledges potential macroeconomic risks that could impact future growth rates.

Q & A Highlights

Q: Can you provide an update on the supply constraints in the domestic air market and the impact on growth for 2025? A: Rajesh Magow, Group CEO, explained that while improvements are happening, the resolution of supply constraints is delayed by another quarter or two. New supply is trickling in slowly, and engine issues with grounded planes remain unresolved. The growth rate of supply is lagging by about 10-15% year-to-date, but they hope the situation will improve in the next couple of quarters.

Q: What are your thoughts on achieving a steady-state adjusted EBIT margin of 2.5% to 3% in the medium term? A: Mohit Kabra, Group CFO, noted that Q3 is seasonally the best quarter, and while they have seen consistent growth in operating margin expansion, their current aim is to reach 1.8% to 2% on an adjusted margin basis. They will have a better view on margin expansion as they approach the lower range of this target.

Q: How do you foresee the sustainability of your current growth rates, particularly in international travel? A: Rajesh Magow highlighted that their growth is supported by both macro trends, such as rising disposable income and changing consumer behavior, and micro factors like strong execution. The main risk to growth would be macroeconomic changes that affect consumer spending patterns, but they are confident in outpacing industry growth regardless.

Q: How has competition from airline direct bookings and other OTAs affected your market share? A: Rajesh Magow stated that despite Indigo's increased competitiveness, MakeMyTrip has maintained or grown its market share by focusing on the larger pie available to intermediaries. They have executed strategies to capture demand from various segments and channels, which has helped them stay ahead in the market.

Q: Can you comment on the impact of currency volatility on consumer behavior and your business? A: Mohit Kabra mentioned that despite currency fluctuations, they have not seen any impact on demand in the strong seasonal quarter. Historically, currency changes lead consumers to choose alternative destinations rather than cancel travel plans, and this pattern has continued.

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