MMYT Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Revenue Growth: The company reported a 20% constant currency revenue growth for the quarter, driven by strong demand in October and November.
Adjusted Operating Profit: Achieved $50.7 million, marking a significant milestone with an adjusted operating margin of 1.82% of gross bookings, up from 1.76% year-on-year.
Net Profit: Reported a net profit of $7.3 million, with an adjusted net profit of $51.4 million, reflecting a 33% year-on-year growth in adjusted diluted EPS.
Gross Booking Value (GBV): Grew at 15.9%, impacted by a GST reduction on hotel rooms, leading to a divergence between volume growth (20.3%) and GBV growth.
Cash Position: Ended the quarter with over $100 million in cash equivalents.

2. Strategic Updates and Business Highlights

AI Integration: The company is leveraging AI through its digital assistant, Myra, which now handles over 50,000 conversations daily and has improved customer interactions, particularly in tier two cities.
Product Expansion: Launched tours and activities, providing access to over 200,000 bookable activities in 130 countries, aiming to streamline the travel experience for Indian outbound tourists.
Market Leadership: Maintained a 31% market share in the domestic air ticketing segment, with a focus on growing international travel, which now constitutes 43% of the adjusted margin in ticketing.
Corporate Travel Growth: The corporate travel segment saw an increase in active customers, with 77,500+ on MyBiz and 539 large corporates on Quest2Travel.

3. Forward Guidance and Outlook

Market Recovery: The company anticipates a gradual recovery in domestic air travel, projecting a return to positive growth in daily departures in the upcoming quarters.
Continued Investment: Plans to maintain investments in core growth capabilities, particularly in AI and strategic opportunities, while managing a buyback program of $200 million.
Long-term Growth: The management remains optimistic about the Indian travel market's expansion driven by economic and technological factors.

4. Challenges and Points of Concern

Regulatory Disruption: New flight duty time limitation rules caused a 5% year-on-year decline in daily departures in December, impacting travel plans during peak season.
Mixed Performance in Hotel Segment: The hotel segment experienced a 9% year-on-year revenue growth, below previous quarters, attributed to the GST impact and currency fluctuations.
Competitive Landscape: While MMYT dominates the domestic hotel market, the overall online penetration remains low, indicating potential competition from global players as the market matures.

5. Notable Q&A Insights

Hotel Segment Dynamics: Management clarified that the GST reduction significantly impacted the pricing and volume dynamics in the hotel segment, with a shift towards budget accommodations.
AI and Competitive Landscape: Concerns were raised about competition from generative AI tools like Google and ChatGPT. Management believes that while these tools may attract some users for trip planning, MMYT's integrated digital assistant Myra offers a competitive edge in customization and booking.
Marketing Spend: The marketing expense increased to 5.6% of gross bookings, attributed to a shift in customer acquisition costs linked to higher-margin segments. Future marketing spend is expected to normalize as air travel recovers.

Overall, MMYT demonstrated resilience in a challenging quarter, leveraging AI and expanding its product offerings while navigating regulatory disruptions and competitive pressures. The outlook remains cautiously optimistic, with a focus on growth and market leadership.

MMYT — MakeMyTrip Limited