MMYT — MakeMyTrip Limited

MakeMyTrip (MMYT) Q1 FY 2027 Earnings Call Summary

1. Key Financial Results and Metrics

• Gross Booking Value: Grew 19.9% year-over-year (YoY) in constant currency.
• Revenue: IFRS revenue increased 16.1% YoY to $285.6 million in constant currency.
• Adjusted Operating Profit: $51.4 million, maintaining profitability margins at 1.8% of gross bookings.
• Net Profit: Reported PAT of $9.1 million; adjusted net profit before tax at $52.2 million.
• Cash Position: Ended the quarter with $794 million in cash and cash equivalents.
• Marketing Expenses: 5.4% of gross bookings, slightly up from 5.2% in the previous quarter.

2. Strategic Updates and Business Highlights

• AI Transformation: Launched Myra 2.0, an AI-powered travel assistant that enhances customer engagement and booking processes. It handled over 8 million conversations in the quarter.
• Growth in Non-Air Segments: Strong performance in hotels and packages (+21.3% adjusted margin growth) and ground transport (bus ticketing +32.4% adjusted margin growth).
• New Initiatives: Introduced OneCircle, a cross-network hotel rewards program, and expanded domestic experiences, enhancing customer offerings.
• Corporate Travel Growth: Active corporate customer count on myBiz increased by 19% YoY, indicating strong demand in the B2B segment.

3. Forward Guidance and Outlook

• Cautious Optimism: Despite macroeconomic challenges, the company remains positive about long-term growth drivers such as the expanding middle class and increased travel frequency.
• Focus on Non-Air Ticketing: Plans to continue tapping into growth opportunities in non-air segments while managing marketing investments according to market conditions.
• IPO Plans: Confidentially filed for an IPO for MakeMyTrip India Limited, expected to enhance cash position and brand visibility.

4. Bad News, Challenges, or Points of Concern

• Geopolitical Impact: The ongoing West Asia conflict has affected international travel demand, particularly westbound routes, leading to cautious consumer sentiment.
• Higher Costs: Increased fuel prices and ATF costs have pressured profitability and led to capacity cuts by airlines, impacting air ticketing performance.
• Currency Fluctuations: Significant currency depreciation affected reported growth figures, with a 10% impact noted due to translation effects.
• Market Share Pressures: The company faces challenges in maintaining air ticketing market share amidst declining international flight departures (-13% YoY).

5. Notable Q&A Insights

• Booking Trends: Management noted a shift towards domestic travel and short-term getaways, with customers opting for alternative transport due to high airfares.
• Marketing Spend: No significant changes expected in marketing spend as a percentage of GMV, with AI-led efficiencies helping to control costs.
• Fungibility of Shares: Discussions around enabling fungibility between the U.S. and Indian listings post-IPO, with potential regulatory changes being monitored.
• Operating Leverage: Despite strong growth in constant currency, operating profit growth was in the single digits, attributed to strategic investments in technology and market share expansion rather than immediate profitability focus.

Overall, MakeMyTrip demonstrated resilience amidst challenging external conditions, leveraging its diversified offerings and strategic initiatives to drive growth while navigating geopolitical and economic headwinds.