MakeMyTrip(MMYT) - 2025 Q4 - Annual Report

PART I Key Information This section outlines the company's principal risks, including industry disruptions, intense competition, regulatory changes, and significant shareholder influence Risk Factors The company's business is subject to numerous risks including industry disruptions, intense competition, evolving laws, and significant shareholder influence - The business is highly sensitive to disruptions in the travel industry, such as the liquidation of Go First, which reduced ticket supply and disrupted customer travel[45] - The company faces intense competition from other online travel agencies (OTAs), traditional agencies, and direct booking channels, which may increase marketing expenses and pressure commissions[57][58] - Evolving regulations in India, particularly the Digital Personal Data Protection Act (DPDP Act), could impose significant compliance costs and affect business operations[112][113][114] - Major shareholder Trip.com holds 45.34% of total voting power, giving it significant influence over corporate matters[134] - The company is subject to ongoing tax proceedings in India with aggregate claims amounting to millions of dollars, which could adversely affect financial performance[123][695] Information on the Company This section details the company's history, business model through its primary brands, and strategy focused on high-margin segments and technology History and Development of the Company Founded in 2000, the company has grown through key acquisitions like ibibo Group, with its stated capital reaching approximately $2.04 billion by March 2025 - The company was founded in 2000, initially serving non-resident Indians in the US, and launched its Indian business in September 2005[199] Key Acquisitions | Acquisition | Year | Business Description | | :--- | :--- | :--- | | ibibo Group | 2017 | Online travel services including Goibibo and redBus brands | | Bitla | 2018 | Technology support for bus operators | | Quest 2 Travel | 2019 | Corporate travel solutions | | Book My Forex | 2022 | Currency exchange and cross-border remittances | | Simplotel | 2022 | Website and booking technology for hotels | | Savaari | 2023 | Car rental services in India | | HAPPAY | 2025 | Corporate travel and expense management business | - In February 2021, the company issued $230.0 million in 0.00% convertible senior notes due 2028[209] Business Overview The company is a leading Indian travel provider whose strategy emphasizes growing its high-margin hotels and packages segment through technology and acquisitions Key Business Metrics (Fiscal Years 2023-2025) | Metric | FY 2023 | FY 2024 | FY 2025 | | :--- | :--- | :--- | :--- | | Gross Bookings | $6.6 billion | $8.0 billion | $9.8 billion | | Flight Segments | 43.9 million | 51.1 million | 58.7 million | | Hotel & Package Room Nights | 26.1 million | 31.1 million | 37.0 million | | Bus Tickets Booked | 73.0 million | 86.8 million | 106.5 million | - The company's strategy is to expand its higher-margin Hotels and Packages business, which it aims to achieve through technology investment, automation, and strategic partnerships[241][242] - As of March 31, 2025, the platform offered approximately 87,000 properties in India and over 1.2 million properties outside India[220] - The company faces strong competition from other OTAs (Agoda, Booking.com, Expedia), traditional agencies, and direct supplier channels[356] Employee Headcount as of March 31, 2025 | Function | Number of Employees | | :--- | :--- | | Sales and marketing | 1,569 | | Technology | 1,649 | | Product development | 303 | | Operations, business dev. & supply | 991 | | Management & Others | 610 | | Total | 5,122 | Operating and Financial Review and Prospects This section analyzes the company's financial performance, highlighting 25.0% revenue growth to $978.3 million in FY2025, strong liquidity, and key accounting policies Operating Results FY2025 revenue reached $978.3 million, a 25.0% increase, with Adjusted Operating Profit growing to $167.3 million driven by strong travel demand Consolidated Statement of Profit or Loss Summary (FY2024 vs FY2025) | Metric (in millions) | FY 2024 | FY 2025 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $782.5 | $978.3 | 25.0% | | Results from operating activities | $65.2 | $119.9 | 83.9% | | Profit for the year | $216.7 | $95.3 | (56.0)% | | Adjusted Operating Profit | $124.2 | $167.3 | 34.7% | | Adjusted Net Profit | $137.2 | $178.2 | 29.9% | Adjusted Margin by Segment (FY2024 vs FY2025) | Segment (in millions) | FY 2024 | FY 2025 | Change (%) | | :--- | :--- | :--- | :--- | | Air Ticketing | $317.7 | $373.1 | 17.4% | | Hotels and Packages | $348.9 | $429.5 | 23.1% | | Bus Ticketing | $102.1 | $131.0 | 28.2% | | Others | $48.8 | $72.0 | 47.7% | - The increase in revenue and adjusted margin across all segments in FY2025 was primarily attributed to robust travel demand in India for both domestic and international outbound travel[492] - Marketing and sales promotion expenses increased by 34.1% to $165.3 million in FY2025, driven by variable costs and brand-building initiatives in response to strong travel demand[499] - FY2024 profit was significantly impacted by a one-time income tax benefit of $123.8 million from the recognition of deferred tax assets, which was not repeated in FY2025[503][518] Liquidity and Capital Resources The company maintains a strong liquidity position with $763.3 million in cash and term deposits and an active share repurchase program Cash and Liquidity Position (as of March 31, 2025) | Item (in millions) | Amount | | :--- | :--- | | Cash and cash equivalents | $508.9 | | Term deposits | $254.4 | | Total Cash & Term Deposits | $763.3 | Summary of Cash Flows (FY2025, in millions) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash from Operating Activities | $185.3 | | Net cash from Investing Activities | $26.4 | | Net cash used in Financing Activities | ($22.9) | - The company has $230.0 million in convertible notes due 2028, with the next potential repurchase date for holders on February 15, 2026[534][562] - The company has an authorized share repurchase program for up to $136.0 million, with $114.2 million remaining available for repurchasing ordinary shares and the 2028 Notes as of March 31, 2025[560][561] Directors, Senior Management, and Employees This section details the company's leadership, compensation structure, and board practices, including the influence of shareholder Trip.com - The board comprises ten directors, with key figures being Founder Deep Kalra (Group Chairman) and Rajesh Magow (Group CEO)[568][571][572] - Major shareholder Trip.com has the right to nominate five directors to the board[618] - Aggregate compensation for directors and executive officers in fiscal year 2025 was $2.0 million, consisting of $1.4 million in base salary and $0.6 million in other payments, excluding equity grants[583] - The company has a Share Incentive Plan, last amended to extend its expiration to March 31, 2032, under which it grants RSUs and ESOPs to employees, consultants, and directors[584][604] - As a foreign private issuer, the company follows certain Mauritian home country governance practices, such as not having a majority of independent directors, which differs from Nasdaq requirements[180][636] Major Shareholders and Related Party Transactions This section identifies major shareholders, led by Trip.com with 45.34% voting power, and details significant related party transactions Major Shareholders (as of March 31, 2025) | Shareholder | Ordinary Shares (%) | Class B Shares (%) | Total Voting Power (%) | | :--- | :--- | :--- | :--- | | Trip.com | 15.05% | 100.0% | 45.34% | | Schroder Investment Management | 5.75% | 0% | 3.70% | | FMR LLC | 6.43% | 0% | 4.14% | | Baillie Gifford & Co. | 7.20% | 0% | 4.63% | | Deep Kalra | 5.07% | 0% | 3.28% | - The company procured air tickets and hotel room nights valued at $109.8 million from Trip.com subsidiaries in fiscal year 2025[652] - The company sold air tickets and hotel room nights with a value of $19.7 million to Trip.com subsidiaries in fiscal year 2025[652] Financial Information This section references the consolidated financial statements and details significant legal proceedings, including numerous tax disputes in India Consolidated Statements and Other Financial Information The company is contesting multiple tax demands from Indian authorities and a significant penalty from the Competition Commission of India (CCI) - The company is contesting numerous income tax assessment orders from Indian tax authorities for assessment years 2009-10 through 2023-24, with disputes over issues like transfer pricing and depreciation[663][664][694] - Multiple service tax and GST demands are outstanding from Indian authorities for periods from 2006 to 2021, with many of these cases under appeal[695][704][733] - The Competition Commission of India (CCI) imposed a penalty of Rs. 2,234.8 million ($26.1 million) for alleged anti-competitive practices, which the company has appealed[749][750] - The company is involved in a writ petition regarding the applicability of the Motor Vehicles Act to its redBus business, with an interim order preventing adverse action[746][748] Additional Information This section details the company's dual-class share structure, which grants significant control rights to Trip.com, and discusses potential PFIC status Memorandum and Articles of Association The company's governance is defined by its Mauritian incorporation and a dual-class share structure granting Trip.com significant control rights - The company has two classes of shares: ordinary shares and Class B shares, with the latter possessing special control rights[762] - As long as Permitted Holders (currently Trip.com) own 10% or more of voting securities, they are entitled to nominate directors in proportion to their ownership[808][815] - Certain 'Reserved Matters' require approval from a majority of Class B directors, including major asset sales and changes to key executive positions[820] - Trip.com holds pre-emptive rights to purchase additional Class B Shares to maintain its voting percentage in the event of new voting security issuances[812][867] Taxation This sub-section describes the company's 15% Mauritian tax rate and the potential US tax implications for shareholders, including PFIC risk - As a Mauritius Global Business Company (GBC), the company is subject to a 15% income tax rate and may receive an 80% partial exemption on certain foreign income[172][173] - For US Holders, distributions are generally treated as dividends, with tax rates dependent on the company not being classified as a Passive Foreign Investment Company (PFIC)[896][897] - The company does not believe it will be a PFIC for the current taxable year, but this status is subject to annual testing and could have adverse tax consequences for US Holders[903] Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is foreign currency exposure, particularly between the INR and USD, while it reports no interest rate risk - The company is exposed to foreign currency risk, primarily from mismatches between the Indian Rupee (functional currency) and the US Dollar (presentation currency)[927] Foreign Currency Risk Sensitivity (FY2025) | Scenario | Impact on Profit (in millions) | | :--- | :--- | | 10% appreciation of USD vs INR | ($19.7) | | 10% depreciation of USD vs INR | $19.7 | - The company does not currently use any hedging agreements to cover its foreign exchange exposure[930] - The company reports no interest rate risk as it does not have any variable rate interest-bearing financial instruments[930] Controls and Procedures Management and the independent auditor concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[941] - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2025, based on the COSO framework (2013)[944] - The independent auditor, KPMG, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of March 31, 2025[948][949] - No material changes in internal control over financial reporting were identified during the period covered by the annual report[954] Other Information This section covers governance topics including the audit committee financial expert, accountant fees, share repurchases, and cybersecurity risk management - The board has determined that Ms. May Yihong Wu qualifies as an audit committee financial expert[955] Principal Accountant Fees (FY2025) | Fee Category | Amount | | :--- | :--- | | Audit Fees | $681,371 | | Tax Fees | $190,768 | | All Other Fees | $0 | | Total | $872,139 | - The company has a share repurchase plan with $114.2 million remaining for future purchases as of March 31, 2025[964] - The company follows home country (Mauritius) practices in lieu of certain Nasdaq rules, such as not having a majority-independent board[970] - The company has a cybersecurity risk management program overseen by the board and has not identified any cybersecurity threats that have materially affected the company[973][977][978] PART II PART III Financial Statements This section indicates that the company's audited consolidated financial statements are provided under Item 18 Financial Statements This section contains the company's audited consolidated financial statements for fiscal years 2023-2025, prepared in accordance with IFRS Consolidated Financial Position (as of March 31) | (in thousands) | 2024 | 2025 | | :--- | :--- | :--- | | Total Assets | $1,660,077 | $1,828,288 | | Total Liabilities | $543,659 | $620,311 | | Total Equity | $1,116,418 | $1,207,977 | Consolidated Profit or Loss (for the year ended March 31) | (in thousands) | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | | Total Revenue | $593,036 | $782,524 | $978,336 | | Results from operating activities | $23,604 | $65,214 | $119,889 | | Profit (loss) for the year | ($11,168) | $216,743 | $95,274 | - The independent auditor's report identified two critical audit matters: the evaluation of revenue recognition due to high transaction volume and the recoverability of deferred tax assets[1001][1002][1006] Exhibits This section lists all exhibits filed with the Form 20-F, including governing documents, material agreements, and required certifications - Key exhibits include the company's Constitution, the Amended and Restated Investor Rights Agreement with Trip.com, and the Indenture for the 2028 Convertible Notes[986]