MakeMyTrip Limited exhibited robust operating performance in the second quarter of the fiscal year 2024, with gross bookings reaching $1.8 billion, marking a 23.8% year-on-year (YoY) growth in constant currency terms. Despite temporary setbacks due to monsoon rains, the travel services company reported an 87% YoY increase in adjusted operating profit to $28.2 million. The company also highlighted its focus on the intercity cab market, seeing potential for significant growth.
Key takeaways from the earnings call:
- MakeMyTrip's gross bookings reached $1.8 billion, a 23.8% YoY increase, while adjusted operating profit surged 87% YoY to $28.2 million.
- The company experienced recovery in its air ticketing business, surpassing pre-pandemic levels for short-haul destinations.
- The accommodation business witnessed strong growth, aided by increased supply and improved distribution channels.
- MakeMyTrip expanded its homestays business, launching holiday packages with homestays as an option.
- The corporate travel business is gradually gaining significance, with the myBiz platform ranking top in travel and expense management for APAC.
- The company has made organic investments in rail bookings and plans to strengthen its intercity cab business through an inorganic investment in Savaari.
The company's growth was reported despite a one-time provision of $10 million due to ongoing legal challenges and capacity issues in the domestic civil aviation market. MakeMyTrip remains optimistic about future growth, underpinned by its strong balance sheet with over $0.5 billion in cash and cash equivalents.
The company's CFO, Mohit Kabra, emphasized their focus on the intercity cab market, which is estimated to be around $3 billion with low online penetration. He noted the potential for growth in this sector due to government infrastructure developments. The company recently invested in Savaari, an existing supplier on their platform, to accelerate its plans in this sector.
In terms of advanced bookings for the December quarter, the company did not see anything unusual, except for certain pockets related to the Cricket World Cup event. They noted that there has been some consumer behavior change, with more awareness and planning in advance due to high prices.
MakeMyTrip CEO Rajesh Magow discussed the potential for productivity gains and enhanced customer experience through the use of AI technology in post-sales services and software development. He also mentioned the potential for expansion to smaller cities and resolving language barriers.
Overall, MakeMyTrip's strong performance in Q2 and its strategic focus on emerging markets like the intercity cab sector underline its commitment to consolidating its position as a leading travel services company in India.
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