MakeMyTrip Limited (NASDAQ:MMYT) Q3 2025 Earnings Call Transcript

MakeMyTrip Limited (NASDAQ:MMYT) Q3 2025 Earnings Call Transcript January 23, 2025

MakeMyTrip Limited misses on earnings expectations. Reported EPS is $0.35 EPS, expectations were $0.43.

Vipul Garg: Good evening everyone. We will just wait for one more minute for everyone to join in and then we start. Hello everyone. I am Vipul Garg, Vice President, Investor Relations at MakeMyTrip Limited and welcome to our Fiscal 2025 Third Quarter Earnings webinar. Today’s event will be hosted by company’s leadership team comprising Rajesh Magow, our Co-Founder and Group Chief Executive Officer; and Mohit Kabra, our Group Chief Financial Officer. As a reminder, this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today’s event. At the end of these prepared remarks, we will also be hosting a Q&A session. Furthermore, certain statements made during today’s event may be considered forward-looking statements within the meaning of Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These statements are not guarantees of future performance, are subject to inherent uncertainties, and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances. Additional information concerning these statements is contained in the Risk Factors and forward-looking statements section of the company’s annual report on Form 20-F filed with the SEC on July 2, 2024. Copies of these filings are available from the SEC or from the company’s Investor Relations Department. I would like to now turn the call over to Rajesh. Over to you, Rajesh.

Rajesh Magow: Thank you, Vipul. Welcome everyone to our third quarter call for fiscal 2025. Happy to start the call by sharing that Indian travelers continue to demonstrate their eagerness to travel and experience new horizons in this seasonally strong quarter for leisure travel. Confluence of rising income levels and changing consumer behavior to spend a bigger portion of available discretionary surplus is driving the growth for both domestic and international tourism in India. A recent survey by Visa indicates that 62% of Indian consumers plan to increase their spending on discretionary goods and services. These favorable macro trends combined with our focused executions have enabled us to outpace industry growth consistently.

We are pleased to deliver strong performance across all our business segments with an accelerated year-on-year growth rate of 26.8% in gross booking value in constant currency terms during the reported quarter compared to a growth rate of 22.9% during the first half of this fiscal year. Alongside accelerated booking growth, we have also been able to drive operating leverage and the adjusted operating profit which is at an all-time quarterly high of $46 million has registered a year-on-year growth of about 38%. On the macroeconomic front, India’s GDP growth forecast reflect a positive economic outlook driven by strong domestic demand and strategic public investments. The World Bank recently said that India’s growth is projected to remain steady at 6.7% a year for the next two fiscal years, beginning April 2025, making it the fastest growing larger economy in the world.

India is undertaking significant investments in infrastructure to bolster economic growth and achieve its development objectives. Travel infrastructure, comprising roads, railways, and airport infrastructure is a pivotal part of these investments, making point to point travel seamless, convenient, and reliable. The seamless connectivity has been one of the major reasons for the growth of travel and tourism in India and will continue to drive growth in the future, as more and more domestic and international destinations get connected. Along with domestic Indian travelers are increasingly exploring international destinations now. In the first half of 2024, 15 million Indian travelers abroad — Indians traveled abroad, marking a 14% year-on-year increase and a 12% rise compared to 2019.

Q&A Session

Swift [ph] projections suggest that by 2027, India will become the world’s fifth largest outbound travel market, thus presenting a huge opportunity for us. Our international outbound business continues to grow at a faster pace. For Q3 fiscal year 2025, our international air ticketing revenue grew by over 32% year-on-year, far outpacing industry growth. Similarly, our international hotels revenue grew by over 63% year-on-year, making this one of our fastest growing business segments. Let me now turn to the business segments, starting with our air ticketing business, where near-term supply challenges particularly in the domestic air market remain. Despite the slow growth in domestic air supply, we have been able to maintain our leading market share position while outpacing the industry growth rate overall on the back of the under-penetrated international air segment.

Our air ticketing revenue grew by 20% year-on-year in constant currency terms. In our endeavor to keep improving consumer experience, we have recently launched a very customer-friendly product feature of part payment on international air tickets, which enables our customers to get a confirmed booking by paying only a certain percentage of total fare upfront. The remaining balance must be paid either before the travel date or within 45 days of booking, whichever comes first. This will help increase affordability and address cash flow issues. We also launched value bundles for international flights including relevant fintech products such as VISA, rejection full refund, cancel for any reason, and free date change. This has provided more flexibility add-ons for the customers and lead to more adoption.

Our accommodation business, which includes hotels, home stays and packages, continues to witness strong growth. We recorded 24.9% year-on-year growth in the adjusted margin on a constant currency basis. While October was a little slow due to the festivals, the season picked up significantly in November and December on the back of holiday season and mice [ph] and wedding-related demand. We also witnessed broad-based growth this quarter. There was an uptick in demand across all price points and consumer segments and use cases. As a result, we witnessed record check-ins in the last 10 days of December during the peak holiday season. Spiritual tourism is emerging as one of the other key growth drivers of tourism in India, with new destinations getting added to the existing popular destinations like Varanasi, Katra, Tirupati Shirdi, etc.

besides specific events like Mahakumbh related demand for this segment. To cater to this demand, we have enhanced supply depth in these emerging new cities on our platform and help such travelers easily find suitable properties by highlighting key aspects such as distance from pilgrimage sites, wheelchair accessibility, availability of lifts, and vegetarian food options. These features are now integrated into our product to provide smarter, more personalized property recommendations. As a result, this segment is growing faster for us, reflecting strong customer demand and satisfaction. We are also seeing concerts driven demand across the Tier 1 and metros, which is a relatively new phenomenon in India. As per estimates for the recent Cold Play concert in Mumbai, around 25% of the ticket buyers were local Mumbaikers while 75% traveled from other Indian states, thus presenting a new demand use case for travel.

We are also seeing good demand not only for domestic but also for international destinations, for example, Cold Play concert in Abu Dhabi and Taylor Swift in Singapore. Another consumer segment that is showing growth promise for us is inbound, especially from Indian diaspora. You might recall that last year we made our platform GDPR compliant, making it accessible in 150 countries. Recently, we have also enabled multi-currency feature allowing payments in 22 major global currencies, solving an important need of these customers. I am happy to report that we have started to witness growth in inbound bookings, albeit on a small base. As part of our overall genie-eye strategy, this quarter we expanded Myra our genie-eye powered ChatBot for our accommodation product.

Myra enhances the booking experience by handling real-time pricing, availability, and specific hotel related queries. It complements our other generative AI capabilities, including image ordering, filters, and user view analysis helping customers find the best places to stay with ease. Our homestay business continues to scale during the quarter — continues to scale — during the quarter we sold over 21,500 plus unique properties across 920 plus unique destinations, with strong growth across business and leisure destinations. The demand from pilgrimage cities grew the highest on the back of increased supply in destinations like Varanasi, Ayodhya, Prayagraj, Amritsar, etc. While property ratings and reviews have always been a cornerstone of our platform, we have taken a step further by introducing subcategory ratings and summarizes across key elements like amenities, food and location.

This enhancement aims to build a deeper trust and transparency, especially in the non-standardized category of alternative accommodation, empowering customers to make more confident and informed choices. Our holiday packages business delivered robust performance as well, achieving highest ever-gross booking number driven by strong growth in international outbound packages, with Malaysia and CIS countries witnessing 2x-order growth year-on-year and Vietnam witnessing over 70% year-on-year growth in orders. In our bus business, growth has further improved in Q3 on the back of about 15% year-on-year growth in private bus supply. Demand has — was buoyant in the quarter due to the festive period in October, travel for weddings, and auspicious occasions in November and the holiday period in December.

As a result, market growth has been robust with occupancy rates going up by nearly 5% points year-on-year. As market leader, our growth was ahead of the market resulting in share gain for us. During the quarter, we expanded our language offering in Red Bus and now offer a full-fledged booking and post-sales experience in Hindi, Tamil, Telugu, and Kannada as well. Our international business continues to grow well in all countries as well with a growing contribution to the overall pie. For our rail business, we continue to bring in new users to the platform besides growth in ancillary revenues primarily from seat guarantee product. For our cabs business we continue to scale both airport transfers and intercity cabs. During the peak season, we were able to scale our fulfillment to over 97%, thus catering to the peak demand.

On the product front, we scale the multi-city booking option for outstation cabs, enabling seamless itineraries with multiple stops during this quarter. Our corporate travel business via both platforms, MyBase and Quest to Travel is witnessing strong growth. Our active corporate customer count on MyBase is now over 64,000 plus compared to 56,000 customers during the same quarter last year. And for Q2T, the active customer count has reached 493 large corporates compared to 334 customers in the same quarter last year. Our ancillaries business is scaling up well. We are witnessing healthy attach rates for products like travel insurance, FOREX, etc. We have launched various bite-sized insurance to address specific customer needs, lending to an uptick in adoption.

Growth in the FOREX business was driven by cross-sell campaigns, including reaching out to international flights, hotels and holiday customers, with multiple customer impacting funnel persuasions. And lastly, our strong performance this quarter was also ably supported by our marketing and customer reach strategy, with well thought through brand campaigns, featuring three films based on deep consumer insights for hotels and alternative echo users, combined with wider customer reach via effective and efficient media mix. This campaign reached 200 million plus consumer across categories, leading to new user acquisition and helping us achieve our highest top of the mind recall in the travel category. With this, let me now hand over the call to Mohit for the financial highlights of the quarter.

Mohit Kabra: Thanks Rajesh and hello everyone. We are pleased to report all-time new highs in quarterly gross bookings, revenue, and registered operating profit during the quarter, which was a seasonally better quarter for leisure travel. We saw strong performance across all business segments and more importantly from emerging pockets of demand that we have been focusing upon as well as for new services that we have been adding to our platforms in the last few years. As shared by Rajesh, the highlight of the quarter has been acceleration in bookings growth, along with improvement in operating margins in comparison with the previous quarters for the year. Registered operating profit for the quarter came in at $46 million and adjusted operating profit margin as a percentage of gross bookings came in at 1.76%, which is significantly better than 1.6% during the same quarter last year and 1.65% in the first half of this year.

Moving on to our segment results, our A ticketing gross bookings for the quarter came in at $1.5 billion, witnessing a year-on-year growth of 23.1% in constant currency. Adjusted margin stood at $93.8 million, registering its year-on-year growth of 20% in constant currency. While Rajesh has updated about the continued hot performance in international ticketing, let me share some more color on domestic air ticketing. In the domestic air market, while daily departures were broadly at similar levels as last quarter, the market growth picked up to almost 9% year-on-year on a flown basis in the seasonally strong quarter. We continue to grow slightly ahead of the market with a continued 30% plus share of the domestic flight ticketing market. Gross bookings for the quarter in hotels and packages segment came in at $681.5 million, registering a growth of 23.4% year-on-year in constant currency.

Adjusted margin growth was 24.9% year-on-year in constant currency terms resulting in adjusted margin of $121.9 million during the quarter. Our continued efforts around adding more properties across the country have resulted in us being able to sell room nights across more than 1850 cities through the country and compared to about 1750 cities during the same quarter last year. This spread has more than doubled from pre-pandemic levels. This argues well for us as new supply expansion has been faster in Tier 2 and Tier 3 cities, almost 120 new hotels have opened in the first 10 months, adding about 8,000 rooms in the branded segment in these tier cities. We have spoken about scaling up direct contracting for international hotels in the recent years and this strategy has helped us get accommodation bookings in over 160 countries during this quarter.

Earlier during the fiscal year we had called out efforts put in to become compliant with GDPR and similar requirements in certain international geographies which now allows our platforms including our mobile applications to be accessed in over 150 countries. As a result our inbound gross bookings cross the initial thousand room per day milestone during this quarter. We believe that the combination of inbound and outbound bookings growth will lead to an increase in the portion of international hotels business in the coming years which currently stands at around 19% compared to 14.8% during the same quarter last year as part of the segment. In our bus ticketing business gross bookings for the quarter stood at to $328.9 million growing at 23.6% year-on-year in constant currency.

Adjusted margin stood at $35 million registering a strong year-on-year growth of over 31.3% in constant currency with demand driven by festivals and holiday seasonality. Take rates continue to remain stable and in line across all our business segments. Similarly, our customer acquisition cost that is marketing and sales promotion expenses remain efficient and in line with the same quarter last year at 4.9% of gross bookings. This is slightly higher than the 4.6% reported in the previous quarter linked to change in seasonality. In addition to driving strong bookings and margin growth we remain focused on building operating cost efficiencies and driving operating leverage in our fixed cost including personal selling or general restorative expenses.

Our disciplined approach to cost management combined with targeted investments in technology and customer experience has enabled us to capitalize on this growing travel demand and drive profitable growth. For instance, back bar investments in automation and artificial, our post sales cost for the quarter increased by just about 7% year-on-year compared to almost 26% year-on-year increase in bookings and revenue thus driving cost efficiencies. Technically [ph] this was a seasonally high travel quarter coupled with the fact that the pickup in demand improved during the latter half of the quarter. There has been higher than expected deployment in working capital which is likely to reverse in the coming quarter. Our cash and cash equivalents stand at over $700 million.

Besides maintaining a healthy watch list we will continue to leverage this strong cash position to invest in potential organic and niche and organic growth opportunities as well as opportunistic stock buyback programs. In line with this strategy we signed a business transfer agreement to acquire the Happay Expense Management platform from Ingrid. Happay is a leader in expense management with over 900 corporate customers and robust capabilities in product development data driven insights and scalable solutions that consistently drive value and efficiency for corporate clients. Under the agreement the Happay brand and its expense management business as well as the dedicated team for this particular business will transition to MakeMyTrip. This acquisition reinforces our commitment to becoming the go-to platform for comprehensive corporate travel and expense management solutions.

We expect the transaction to close in the coming quarter. With that I’d like to turn the call back to Vipul for Q&A.

A – Vipul Garg: Thanks Mohit. [Operator Instructions]. I already have a few participants. First question is from the line of Sachin Salgaonkar for Bank of America. Sachin, you may please ask your question now.

Sachin Salgaonkar: Thanks Vipul. Congrats management for another set of fantastic and strong numbers. I have three questions. First question is on air. I remember in the past you guys have said that engine issues in air for the airplane operators might get resolved, but by the looks of it this gets delayed. So I wanted to get some color on that in terms of how should we look at the growth at air for calendar year 2025? And a related question, of course, is on the take rate, we do see take rate going down in the quarter, presume it’s largely seasonality, but also wanted to understand if there’s any pressure from Indigo’s direct booking out here?

Rajesh Magow: Alright, Sachin, thank you. Thank you firstly, and yes, you’re right. We had spoken about the supply constraints or the short-term headwinds on the supply side, specifically for domestic market, probably getting — and we had called that out and we were hoping that it’ll get solved in the coming one or two quarters when we had spoken about it last time. And, our understanding is that this improvement is happening right now. Improvement is definitely happening in the overall supply because supply — new supply is definitely trickling in, but it is at a slow pace. And therefore I guess, for it to get completely resolved it’s getting pushed for another quarter or two, for it to get completely resolved. And the engine issues, the planes that have been grounded are again — and they have continued to sort of remain grounded because that problem is also not necessarily fully addressed.

But I think where there is a better progress between the two, the new supply versus existing supply which is grounded thanks to the engine issues. I think there is positive progress happening on the new supply and not necessarily as the expected progress on the existing supply with the engines down and that is sort of making it up. So overall, I think we have to see this in perspective, in the beginning of the year the overall projection on the growth rate of supply on a net basis was X, let’s say. And it is about — there is a lag of about 10%, 15% on that year-to-date right now. So, and outlook for 2025 is — and we are hoping sort of that this — the pace picks up for the new supply and hopefully this situation gets resolved in the next couple of quarters, but certainly there is some delay there.

As far as take rate is concerned maybe Mohit you can take that.

Mohit Kabra: Yeah Sachin, I can take that one and this is largely optical. In line with change in seasonality as you know the average selling price during Q3 tends to be much higher than Q2. Therefore, if you look at it from a comparative purposes with Q2, the take rates have come down from about 6.8% to 6.1%, but this is largely close to about 13% overall, 12%, 13% kind of increase in ASPs on a blended basis. And in fact, if you look at it across domestic air industry, then the ESP increase was even higher. So this is largely optical coming in from change in pricing regime based on seasonality.

Sachin Salgaonkar: Got it. Thank you. Very clear. Second question wanted to understand how should we think about your steady state adjusted EBIT margin, you guys are already at the 1.7%, 1.8% right now. Question out here is what stops you from going to, let’s say 2.5% to 3% in medium term, you guys are pretty disciplined in cost control, competition is low, good operational leverage is playing out, and of course there’s an added layer of an efficiency what an AI brings in, any thoughts out here?

Mohit Kabra: Yeah, so this quarter generally as you know, is seasonally the best quarter of any year Q3 and therefore probably Q3 by itself is not necessarily indicating of how much the margins would kind of play out. But yes, we have seen good consistent growth in kind of operating margin expansion on the bottom line side. And like I said we currently, our aim is to kind of reach the 1.8% to 2%, or close to about 18% to 20% on an adjusted margin basis. So I’m sure as we kind of get closer to that or the lower range of that range, we’ll have a better view on how margin expansion can kind of play out in the next few years.

Sachin Salgaonkar: Got it. And last question, again wanted to understand if there’s anything specific going at both interest income and interest expense. Your finance income is down materially from a QOQ basis, much lower than the historical trend and so is the finance cost, which have been much higher than the historical trend?

Mohit Kabra: So this would largely also be factoring in some amount of FOREX fluctuations. So could be coming from that. Maybe Vipul can share a slightly more detailed kind of note on this with you offline.

Sachin Salgaonkar: Okay, thanks.

Mohit Kabra: Perfect.

Vipul Garg: Thank you, Sachin. The next question is from the line of Manish Adukia of Goldman Sachs. Manish, you may please ask your question.

Manish Adukia: Thank you Vipul. Hi, good evening team. Thank you so much for taking my questions and again, echoing what Sachin said, congratulations on all round performance in the quarter. Really nice to see that. My first question is actually related to that aspect of the business, I mean, growth has been really strong, mid 20s, YoY growth with Rajesh you have been calling out international remains very strong, north of 13 in air, and closer to 60% in hotels. My question here is like, what can cause this number to let’s say meaningfully come down in the foreseeable future, I mean, in the international travel in particular, which is now sizable for your business, is there like any kind of one off that is really driving this consistently stronger growth over the last two or three quarters and it could start tapering off and so your overall growth may come down, or do you foresee your overall, let’s say gross booking or revenue growth sustain at these levels, just wanted to get your thoughts on the pushes and pulls here and how we should think about that?

That’s my first question, please.

Rajesh Magow: Yes, sure. Thanks, Manish. I think it’s a great question. So if you really see what we are sort of calling out our consistent growth or robust growth rate performance is coming out of sort of two things combined, one macro and the other one micro. On the execution front, I think we’ve been able to put our best foot forward across the board, including sort of mopping up demand from various segments, various channels, thanks to our omnichannel strategy and so on. But it is also sort of supported by the overall macro trend where fundamentally the consumer behavior and habits are changing in terms of — on the back of rising income, rising disposable income in favor of spending more — like or rather a larger portion of disposable income in favor of travel and experiences.

And it’s not only travel, as I was trying to highlight, even on the call early on. It’s also about experiences like concerts and stuff. And we are also getting the sort of side benefit of the travel that is happening because of some of those events as well. So to answer your question of what could possibly go wrong, which could slow down this growth a bit. I would say it’s largely macro. So if, let’s say, for some reasons, if the sort of spending goes down or the consumption pattern changes, with respect to spending more on travel and experience, while we do believe because we’ve been now seeing consistently like a more sort of fundamental change in the spending pattern for travel. But let’s say, for some reason, that changes because just the overall economy is not growing as robust or there is some other macro event that happens because of which the overall sort of demand gets impacted, maybe that could be one of the reasons why it would relatively slow down.

But the way we see it is that, of course, any macro event we can’t really control. But what we are confident about is that whatever rate of growth that the industry will be growing at, we are confident of growing at a higher rate of growth than that for sure, sort of regardless of the situation. But if there is one aspect that could potentially change the — change the rate of growth would be just this overall macro event and just general slowdown in economy if that happens.

Manish Adukia: Thank you Rajesh. Extremely helpful. And my second question is regarding competition, and it has two subparts. One from the airline direct side and second on the OTA side. Now on the airline direct, we’ve all seen in the last few months, just Indigo being slightly more competitive than what they used to be historically. But despite that, it seems to have had no impact on your numbers, your market share is up, your growth looks phenomenal, right. So one would love to get your thoughts as to why Indigo, which is the largest airline in the country, despite them being relatively more competitive has had no impact on your business, if you can just help us understand the nuances to why you’re still being able to maintain or grow your market share?

And second, on the OTA side, we’ve now been in the phase for maybe almost two years or more than that where we’ve not seen any meaningful competition, definitely not in hotels and maybe even reducing competition on the airline side. And again, your thoughts as to why that’s the case, I mean travel seems to be doing really well, I mean international trial, domestic travel all around growth is very, very strong but despite that from the OTA side, it looks like a very stable competitive intensity environment, maybe even declining, so again, your thoughts as to why that’s the case and if you foresee that changing in the foreseeable future? Thank you.

Rajesh Magow: Yes, Manish. So on the first one, and I think I was sharing my thoughts even on the last quarter call. From our point of view, Manish, the way we see it is our focus is, and it goes hand in hand, right. So it’s not necessarily we have to take supply directors at direct competition. If we start to sort of focus more on the larger pie of the market that is sort of available for the intermediaries as well, right. So — and if we — let’s say, whatever might be the supplier direct share today and even if that is growing, incrementally, the rest of the sort of portion of the pie is very, very large. And if we are able to stay focused on that and able to sort of get the lion’s share of that pie, I think that has been our strategy, that has been our focus, and we’ve been able to execute our strategy as well to ensure that that continues to happen.

And that is sort of consistently reflecting on our overall market share, let’s say, on the domestic market holding on or incrementally improving and on the underpenetrated market on the International side, where there’s relatively more competition on the supplier ecosystem. And from an internet penetration standpoint, it is underpenetrated. We’ve just doubled down on improving the customer experience, or sort of attacking that particular segment 360 degree and sort of tapping on to the potential. So that has been our strategy and that we’ll continue to keep doing that. And it might happen with more players going online is that overall online penetration overall continues to sort of grow and because there is still sort of a lot of headroom that is left for a lot of the business that could potentially move online.

So I think that’s the way we’ve seen it, and we’ll continue to keep seeing it that way and its sort of working out well for us. Now as far as the second part is concerned, again, I think I was I would link it back to the answer that I was giving to your first question. I think one of the factors that has also worked in our favor is to just besides our B2C very strong retail segment that we’ve been sort of consistent at from a growth perspective, from retention perspective on the back of the experience and the innovation that we keep doing on our product side. We’ve also been able to very successfully execute our reach to the other customer segments. Corporate business, for example, which is relatively a very young business for us four to five years old, but we’ve significantly sort of scaled that business already in the short span of time.

Similarly, our travel agents, MyPartner channel, similarly are sort of other affiliate strategy with the other affiliate partners from where we’ve been able to sort of get the long tail demand as well and penetrate deep into the market to get the new users on a consistent basis every quarter. So every quarter, if you really see the customers transacted on us, a combination of the very high repeat rate and a very healthy new user acquisition every single quarter, because of sort of this multiple channel strategy and reaching over to the new consumer segments is sort of helping us sort of grow our pie and get better sort of share from the market. I think that is perhaps the single largest reason for it and besides, obviously, relentless execution across the board, is sort of helping us stay ahead in the curve and stay ahead in the market.

Manish Adukia: Fantastic to see. Thank you so much Rajesh and all the best.

Rajesh Magow: Thank you Manish.

Vipul Garg: Thanks, Manish. The next question is from the line of Vijit Jain of Citi. Vijit, you may please ask your question.

Vijit Jain: Thanks Vipul and congratulations team. Hi, to everyone else. Great set of results. My first question is, typically, this current quarter is somewhat seasonally weaker, right, are coming off after 3Q. But as you called out earlier, both these events, Coldplay and Macumba, multiple day events in January. And I think Indian hotels called out spillover of some New Year end demand into the first week of Jan as well. So do you think generally speaking, 4Q at least from your vantage point right now in January seems like it’s going to be less seasonal versus previous years?

Rajesh Magow: Well, Vijit I don’t think it’s going to be any different from the previous years. We don’t really anticipate that, just from a seasonality standpoint. And that is specifically, and we should keep that sort of Novan’s point in mind that when we call that April, May, June and October, November, December, a seasonal quarter for us, favorable seasonal quarter for us, that’s mostly for the leisure use case. Now in our business, we’ve got pretty much sort of addressing and reaching out to the consumers for all kinds of use cases, including a lot of the non-leisure use cases as well. Like, for example, pilgrimage tourism which is sort of emerging as a new growth segment in India, particularly. Now that has no season. That is across the year, the pilgrimage travel that happens.

Similarly, business use case, business travel use case, and so on, right. So — and some of the new use cases that off late that sort of have been emerging as well like celebration of occasions linked to, let’s say, staying in alternative accommodation kind of a use case. And so now our business is a combination of all these use cases from a consumer demand standpoint. And therefore, when we look at the seasonality aspect of it, we should just — with respect to our numbers, we should keep that thing in mind and sort of look at the pattern for the last historical few years and quarters for us to be able to sort of draw some pattern out of it. But specifically, this quarter, will it be significantly different on seasonality as we see coming out of October and November, December because this is a relatively low season quarter from a leisure use case standpoint, we don’t see any different sort of pattern at least as of now.

Vijit Jain: Got it, thanks Rajesh. Rajesh my second question is, so while your customer inducement spends the way you split your A&P spending rate, that has been fairly stable in that low 3% of GBV number. The brand marketing expenses or the other had marketing and sales promotion expenses are now in the upper $40 million a quarter range, right. So I guess my question, I think, is how much of those expenses are directly attributable to bookings and if you can give a broad sense of how much are you spending on top of the funnel type of things, what would be called pure brand marketing, so to say? Just trying to get a sense of that — what is the percent of marketing spend, which is not directly attributable to any bookings as such?

Mohit Kabra: So Vijit, maybe I can take that. I would say, another way to look at the overall customer action costs or marketing and sales promotion, but we kind of look at the trends by seasonality. So over this year, largely, these spends have kind of trended at around 4.6% to 4.7% in the seasonally kind of lower leisure travel kind of seasonality quarters and have trended at closer to about 4.9% to 5%, in the seasonally better off quarters from a leisure travel demand point of view. And as you can imagine, we tend to kind of tweak these in line with seasonality because it makes so much more sense to kind of respond slightly more in a better seasonality. And the other — the reason I’m kind of saying is if you look at it even from an absolute dollar spend on direct brand marketing, the size and scale of these kind of campaigns would keep evolving in line with the changing kind of size of the business and the emergence of kind of brands.

So — and that has a kind of a slightly longer life cycle. So I think just looking at the trends over respective seasonalities by quarter would give you a good indication.

Vijit Jain: Okay. Great. Sure. My next question is just the last bit of question, you did mention on the GenAI side, you talked about Myra. A lot of discussions that I see on GenAI seems to also suggests that one of the first things that it will be able to do end-to-end is travel bookings. So your thoughts on that, I guess, they call it Agentic AI first use case will be in holiday bookings and travel bookings and stuff. Your thoughts on that and is that something that you guys are experimenting with?

Rajesh Magow: Very much, Vijit. And as part of our GenAI strategy for the last several quarters now, our focus has been just picking up any potential application of this in the context of our business, we’ve been just sort of deploying our engineering bandwidth on that and implementing that and going live with. And that includes what you just mentioned, using the Agentic AI. If you look at some of our chat boards that are already live and I mentioned recently, we’ve gone live with our on our hotel and ACO funnel as well. That is actually — it is completely a new user interface, interactive user interface for hotel booking and addressing all kinds of queries, related to the hotel booking and then eventually sort of helping doing the booking as well.

So my take on this is that this is a journey. While on the face of it, everyone is sort of so excited and passionate about GenAI, in particular, but it’s going to be a journey on two counts. One, of course, and from our point of view, we are — this is one of the key strategic items for us as far as overall business strategy is concerned for the last several quarters, and we continue to keep sort of marching ahead and try and ensure that we sort of lead this at least from a travel use case standpoint or whatever promise this technology has to offer. But the other aspect which is equally important is also going to be adoption because some of these sort of new, let’s say, GenAI-based interactive front ends that you would end up sort of developing and that has to be also adopted by the consumers, and that will — that is always a journey.

And our endeavor is to make it more and more intuitive, more and more accurate, more and more relevant, personalized super convenient, etcetera, so that the adoption is faster, but it is also a question of, I’m very used to the existing interface and then — the other one has to be a really compelling sort of alternative for me for me to be able to make the shift. So it’s always a journey because you have all kinds of consumer cohorts in our country. And — but from our point of view, we are — like I said, that it is a core part of our strategy. We will definitely — and we’re looking at and working very closely in terms of sort of partnering with the right sort of partners, both from a content standpoint and technology standpoint and making sure that we — not only we develop and go live, but also learn from it and keep making the improvements because there are still a lot of open ended things that still need to be solved, whether it is vacancy or accuracy, etcetera, which is — and it’s also the cost, which is getting solved every alternative sort of new model that comes into the picture.

And we are adopting all of that. So we are absolutely sort of deep into it already. And pretty much every quarter, you will see something or the other on GenAI coming from MakeMyTrip.

Vijit Jain: Thanks Rajesh, those are my questions. Thank you so much.

Vipul Garg: Thanks Vijit. The next question is from the line of Gaurav Rateria of Morgan Stanley. Gaurav, you may please ask your question now. Gaurav, we are not able to hear you.

Rajesh Magow: Gaurav is not on mute, but something wrong with his — now he’s on mute I think. Maybe we give the opportunity to the next caller.

Vipul Garg: In the meantime, we’ll take the next question. Next question is from the line of Ankur Rudra of J.P. Morgan. Ankur, you may please ask your question now.

Ankur Rudra: Thank you and very strong quarter indeed. Just first question is on the demand side. Clearly, the demand from your side looks extremely solid and extremely strong, but several sections of the consumption basket continue to point out signs of some sort of weakness, including parts of your platform peers. You don’t seem to be seeing this in the last quarter. A, can you confirm that is something being hidden by the strong headline numbers because of pricing? And B, in the current quarter have you seen any signs of that in any of your customer cohorts, which are seeing any impact of consumption slowdown?

Rajesh Magow: No, Ankur, it’s a good question. I think it’s a good observation with respect to some of the other categories as well, and there have been murmurs around, some slowdown in some of the discretionary categories specifically. But as far as travel and tourism sort of spend from a consumption pattern is concerned, we’ve been lucky. October, as I was trying to highlight, even as part of the script and that October was muted for us, but November and December, it picked up really well. So the overall seasonality for the quarter actually played out quite nicely. And there’s nothing hidden to your point on pricing. There’s absolutely nothing hidden because if you see the volumes growth, that is actually quite robust as well.

So part of that, as I was just responding to the earlier question as well, part of that is also from our side, obviously, it’s just expanding our reach to different, different consumer segments as well. But we haven’t really seen, at least in the October, November, December quarter, which we are reporting out, any sort of material signs of slowdown, if you will. Now we will have to obviously watch this situation, how it develops, let’s say, for the other categories as well because if you look at the overall economy projections, even for the next couple of years, they continue to be robust. So I’m hoping whatever is happening to the other category is also an aberration. But having said that, we’ll keep watching this space very carefully.

Ankur Rudra: Thank you. And Rajesh, is there any difference in the nature of the strength of demand you see between the budget traveler category and the more premium traveler category, perhaps by the app, Goibibo users versus MakeMyTrip users in any sense?

Rajesh Magow: You know what, and we looked at that because this is quite natural for us to sort of look at different cohorts as well. And the good news is, at least for this quarter, we saw all segments growing. And I was alluding to that again in the script as well. We saw pretty much budget with segment, premium, etcetera, all of them growing. And premium segment growth has been, as we’ve been sort of calling out for the last few quarters as well, it’s been very robust. And clearly, it’s a function of pricing income, more disposable income, and sort of habit changing to spend more on travel and experience more so for premium category and higher upper middle-class category. But even for budget, the budget segment, specifically for hotels, for example, between MakeMyTrip and Goibibo, we saw that growth sort of coming back as well.

So at least for us on our platform, both brands put together, in the last quarter, we didn’t really see any sort of particular specific cohort slowdown in any of those cohorts, actually.

Ankur Rudra: Thank you Rajesh. Rajesh, we’ve seen a significant amount of currency volatility in the last few months of the quarter. I don’t know whether it’s happened anything this quarter, but looking at past cycles, have you seen any kind of impact of this either directly or with a lag in consumer behavior when they see headline prices change for certain destinations?

Mohit Kabra: Ankur, at least, in this seasonally strong quarter, we haven’t seen any impact, like Rajesh called out. When it comes to international flights as well as international hotels, we’ve continued to see strong demand, particularly from those regions where Visa has been made more easier or kind of Visa realizations have been offered. The demand continues to remain pretty strong.

Rajesh Magow: If I may just add one just additional point to what Mohit just said, I mean just the historical perspective, what we’ve seen in the past, whenever there is this fluctuation, I mean, it’s natural if rupee becomes weaker and a particular destination becomes more expensive. What we’ve seen is that we don’t see a change of people dropping the plans for travel. They just look for an alternative destination, which is relatively sort of cheaper where let’s say, less impact on the currency fluctuation, whether it is overseas or domestic. But we haven’t really seen people particularly changing the plans for travel at least historically.

Ankur Rudra: Thank you. You’ve called out this repeatedly that there’s been a huge amount of support and growth on B2B and the B2B2C segment and also your international business. Could you remind us how much of this — of your business is from there? Also, if you can estimate what sort of share MakeMyTrip has here, perhaps it’s a bit lower than your traditional consumer segments?

Mohit Kabra: On the International side, our mix of business coming in from old bond or in bond or international transactions per se, overall, all put together, that mix has now moved to over 25%. And on coming to B2B, particularly on the corporate side, we had shared some numbers — if I regret in the first quarter of this year, we had called out that our corporate bookings have kind of scaled up to close to about $200 million run rate on a quarterly basis. So those are the two kind of things that I could call out as indicative.

Ankur Rudra: Any estimate for how your share over here will be versus the rest of the business?

Mohit Kabra: So corporate, like Rajesh has said, is in an early stage for us. We have been on the B2B side of things only for the last four to five years. And therefore, we’re kind of pretty much under pitched to the market. Our estimate is at least a fourth of the market should be business-driven or corporate driven, if not higher. So there’s a long way to go in terms of trying to catch up on that ratio.

Ankur Rudra: Understood, just last question. You again spoke about events and pilgrimage, is it possible to quantify what size of the travel market or I mean, if you can estimate also for your own bookings is coming from there?

Mohit Kabra: Actually, pilgrimage as such or some of the other kind of new emerging demand segments like say, for instance, all these concert-related kind of demand that has now started coming off. Our share of volume coming from these kind of travel requirements historically has been pretty low. And therefore, these are now new opportunities that are kind of dialing up. And therefore, doing a full holistic kind of improvement in these areas. So we’re kind of shoring up supply very significantly in these cities and also kind of trying to build the right kind of platforms or channels to be able to cater to the demand that emerges for these kind of specific travel requirements, both B2B and B2C. So I think this is more slightly longer term, to end cash, just like on the corporate side. Right now, pretty nascent.

Ankur Rudra: Okay, appreciate the color. Thank you so much and best of luck.

Mohit Kabra: Thanks Ankur.

Vipul Garg: Thanks, Ankur. We’ll take the last question now from Gaurav of Morgan Stanley. Gaurav, please go ahead.

Gaurav Rateria: Hi, hope I’m audible now?

Rajesh Magow: Yes.

Gaurav Rateria: Happy New Year and congratulations on great set of numbers. I have a few questions. I want to understand what’s the pace of new customer addition per quarter that we are seeing now, let’s say versus what you were seeing last year?

Rajesh Magow: Actually, pretty robust Gaurav there as well and Happy New Year to you, too. And just to give you maybe one data point and you can calculate that, so our repeat rate has been, on a quarterly basis, have been pretty robust. It used to be about 70%, 71%. Last quarter it was about 73%. And this is life-to-date, this is like 73% of the transactions coming from the life-to-date customers. And our overall customer base is now life-to-date all three brands put together has touched about $80 million, up from $77 million and typical contribution from new users has been in the range of between 25% to 30%. And so effectively, it just continues at the same — at the scale. Every quarter, we are obviously adding more and the scale is only going up in one direction. But with the ratio of new users and repeat hasn’t really changed a lot. So the 70:30 going to, let’s say, 73:27, 72:28 kind of so broadly remains the same range.

Mohit Kabra: Also in absolute terms, Gaurav, the net new addition to the platforms generally ranges anywhere between 1.5 million to say, 2.5 million customers during any quarter. There is a typical kind of a new addition that we see.

Gaurav Rateria: Got it. So keeping this into mind and the comment that you explained about your focus on how you look at the market and beyond near-term competition issues, etcetera, why the ad spend as a percentage of gross booking in this nine months of fiscal year appears higher than the last year, what explains this increase, is it more investment led, is it more defending any new competition, just trying to understand that.

Mohit Kabra: You are talking about the marketing spends only versus, say, for instance, marketing and sales proportions put together?

Gaurav Rateria: Yes, like put together. I’m looking at the number combined.

Mohit Kabra: The combined number largely has kind of trended in line with, I would say, last year. And like we had said, we would want to kind of keep this at below 5% levels. And like I was just mentioning on another question earlier, this number has trended at about 4.6% of gross bookings during say seasonally weaker quarters, say, for instance, Q2, Q4 and generally trended at around 4.9% to 5% in seasonally stronger quarters like Q1 and Q3. So there hasn’t really been any kind of substantial change or increase per se.

Gaurav Rateria: Okay. Got it. Lastly, it will be great to get some color on competition in the Hotel segment, if you could layer it for different subsegments, whether it’s for premium, whether it’s for budget, and what would be your rough market share within the overall online market in these segments? Thank you.

Mohit Kabra: Gaurav, a little difficult to kind of call out kind of market shares in the Hotel segment, as you know, because there’s no kind of industry report unlike we kind of get it from DCCI in case of domestic flight ticket thing. Our high-level estimate would be that ballpark about 18% to 20% of the market would have moved online and would possibly be about closer to about half of that. That is our very high level broad estimate in terms of the size of the market. Again, if you look at it in terms of competitive dynamics comparatively kind of better in the hotels or in the accommodation space, say, vis-a-vis compared to the ticketing space because pretty much all the OTAs have a much larger kind of skew towards ticketing compared to accommodation.

And therefore, to some extent, competition on the Hotel side is also with the global OTAs because they tend to kind of be more focused on the accommodation space and particularly in the — I would say, mid to premium segment. But again, they’re a larger share of their kind of volumes will be more inbound, whereas we focus a lot more on domestic and outbound.

Gaurav Rateria: Mohit, thank you and all the very best.

Mohit Kabra: Thank you Gaurav.

Vipul Garg: Thank you Gaurav. This was our last question. Over to you, Rajesh, for your closing comments.

Rajesh Magow: Thank you, Vipul and thank you, everyone. A great set of questions from everyone and thank you for appreciating. And thank you for your patience, and we’ll see you again next quarter.

Mohit Kabra: Thanks, bye.

Vipul Garg: Thank you, everyone. You may now disconnect the call.

Rajesh Magow: Thank you.