MakeMyTrip(MMYT) - 2024 Q1 - Quarterly Report

Fiscal 2024 First Quarter Highlights MakeMyTrip Limited achieved its strongest ever fiscal first quarter, reporting all-time high gross bookings and profits driven by robust travel demand and significant financial growth Overall Performance Summary MakeMyTrip Limited reported its strongest ever fiscal first quarter, achieving all-time high gross bookings and profits, driven by robust travel demand across all customer segments in India - The company delivered its strongest ever quarter with all-time high gross bookings and profits[3] - Robust travel demand across customer segments in a seasonally strong quarter for leisure travel contributed to the positive results[3] Key Financial Metrics The company reported significant year-over-year growth in both IFRS and non-IFRS financial measures, with total revenue increasing by 37.8% (46.2% in constant currency) and Adjusted Net Profit surging to $33.6 million from $6.0 million in the prior year Key Financial Metrics Overview | Metric | Q1 FY23 (USD thousands) | Q1 FY24 (USD thousands) | YoY Change (%) | YoY Change (Constant Currency %) | | :-------------------------- | :---------------------- | :---------------------- | :------------- | :------------------------------- | | Revenue | 142,733 | 196,731 | 37.8 | 46.2 | | Air Ticketing Revenue | 30,941 | 45,878 | 48.3 | 57.4 | | Hotels and Packages Revenue | 84,045 | 115,215 | 37.1 | 45.2 | | Bus Ticketing Revenue | 20,307 | 24,927 | 22.8 | 30.5 | | Others Revenue | 7,440 | 10,711 | 44.0 | 53.0 | | Results from Operating Activities | 4,266 | 19,132 | - | - | | Profit (loss) for the period | (10,009) | 18,598 | - | - | | Adjusted Margin – Air Ticketing | 60,624 | 74,533 | 22.9 | 30.4 | | Adjusted Margin – Hotels and Packages | 66,925 | 85,568 | 27.9 | 36.1 | | Adjusted Margin – Bus Ticketing | 20,763 | 27,277 | 31.4 | 39.7 | | Adjusted Margin – Others | 7,899 | 10,919 | 38.2 | 46.9 | | Adjusted Operating Profit | 16,469 | 30,139 | - | - | | Adjusted Net Profit | 5,998 | 33,588 | - | - | | Gross Bookings | 1,612,475 | 1,987,489 | 23.3 | 31.4 | - Gross Bookings increased by 31.4% YoY in 1Q24 to $1,987.5 million[4] - Adjusted Net Profit increased significantly to $33.6 million in 1Q24 from $6.0 million in 1Q23, an improvement of $27.6 million YoY[4] Detailed Financial Results The company's detailed financial results show substantial revenue growth across all segments, increased operating expenses due to higher demand, and a significant turnaround in overall profitability and earnings Revenue Analysis by Segment The company experienced significant revenue growth across all segments, primarily driven by sustained elevated travel demand in India. Adjusted Margins also saw healthy increases, reflecting improved operational performance - Total revenue increased by 37.8% (46.2% in constant currency) to $196.7 million, primarily due to sustained elevated travel demand in India[5] Revenue by Segment | Segment | Revenue Q1 FY23 (USD thousands) | Revenue Q1 FY24 (USD thousands) | YoY Change (%) | YoY Change (Constant Currency %) | | :------------------ | :------------------------------ | :------------------------------ | :------------- | :------------------------------- | | Air Ticketing | 30,941 | 45,878 | 48.3 | 57.4 | | Hotels and Packages | 84,045 | 115,215 | 37.1 | 45.2 | | Bus Ticketing | 20,307 | 24,927 | 22.8 | 30.5 | | Others | 7,440 | 10,711 | 44.0 | 53.0 | Air Ticketing Air ticketing revenue and adjusted margin saw strong growth, driven by increased flight segments, while the adjusted margin percentage remained stable - Revenue from air ticketing increased by 48.3% (57.4% in constant currency) to $45.9 million[7] - Adjusted Margin – Air ticketing increased by 22.9% (30.4% in constant currency) to $74.5 million, driven by a 31.7% increase in flight segments[7] - Adjusted Margin % for Air ticketing remained stable at 6.1% in Q1 FY24[7] Hotels and Packages Hotels and packages revenue and adjusted margin experienced significant increases, primarily due to a rise in hotel-room nights, maintaining a stable adjusted margin percentage - Revenue from hotels and packages increased by 37.1% (45.2% in constant currency) to $115.2 million[8] - Adjusted Margin – Hotels and packages increased by 27.9% (36.1% in constant currency) to $85.6 million, primarily due to a 20.0% increase in hotel-room nights[8] - Adjusted Margin % for Hotels and packages remained stable at 17.2% in Q1 FY24[8] Bus Ticketing Bus ticketing revenue and adjusted margin grew substantially, fueled by an increase in travelled tickets, with an improved adjusted margin percentage - Revenue from bus ticketing increased by 22.8% (30.5% in constant currency) to $24.9 million[9] - Adjusted Margin – Bus ticketing increased by 31.4% (39.7% in constant currency) to $27.3 million, driven by an 18.7% increase in bus tickets travelled[9] - Adjusted Margin % for Bus ticketing increased to 9.9% in Q1 FY24 from 8.8% in Q1 FY23, partly due to reclassification of distribution costs[9] Others Revenue and adjusted margin from other services increased significantly, reflecting higher demand from marketing alliances and ancillary travel services - Revenue from the 'Others' business increased by 44.0% (53.0% in constant currency) to $10.7 million[10] - Adjusted Margin – Others increased by 38.2% (46.9% in constant currency) to $10.9 million[10] - The increase was due to higher revenue from marketing alliances and other travel and ancillary services, reflecting sustained elevated travel demand[11] Operating Expenses Operating expenses increased across most categories, primarily due to higher variable costs and strategic investments in marketing and operations to capitalize on increased travel demand. Personnel expenses saw a modest rise, while depreciation remained stable - Other income increased significantly to $0.3 million in Q1 FY24 from $0.05 million in Q1 FY23[12] Personnel Expenses Personnel expenses increased modestly due to annual wage adjustments, partially offset by a reduction in share-based compensation costs - Personnel expenses increased by 5.8% to $33.8 million, mainly due to annual wage increases, partially offset by reduced share-based compensation costs[13] Marketing and Sales Promotion Expenses Marketing and sales promotion expenses rose due to higher variable costs and strategic discretionary spending to capitalize on elevated travel demand - Marketing and sales promotion expenses increased by 23.5% to $30.6 million, driven by higher variable costs and discretionary spending on events and brand building due to elevated travel demand[14] - Customer inducement costs recorded as a reduction of revenue increased to $61.2 million in Q1 FY24 from $56.8 million in Q1 FY23[15] Other Operating Expenses Other operating expenses increased significantly, primarily driven by higher booking-linked costs, including distribution and payment gateway charges - Other operating expenses increased by 49.6% to $47.1 million, primarily due to a $15.2 million increase in operating expenses linked to higher bookings, including distribution costs, payment gateway charges, and outsourcing fees[15] - Distribution costs were reclassified as a component of 'other operating expenses' from 'service cost' in the current quarter[15] Depreciation, Amortization and Impairment Depreciation, amortization, and impairment expenses saw a marginal decrease during the quarter - Depreciation, amortization and impairment expenses marginally decreased by 1.8% to $6.8 million[16] Profitability and Earnings The company achieved a significant turnaround in profitability, moving from an operating profit of $4.3 million to $19.1 million, and from a net loss to a net profit, largely due to increased revenue and reduced net finance costs Results from Operating Activities Operating activities shifted from a modest profit to a significantly higher profit, reflecting improved operational efficiency and increased revenue - Results from operating activities improved to a profit of $19.1 million in Q1 FY24, compared to a profit of $4.3 million in Q1 FY23[17] - Adjusted Operating Profit increased to $30.1 million in Q1 FY24 from $16.5 million in Q1 FY23[17] Net Finance Costs Net finance costs decreased substantially, primarily due to a significant reduction in net foreign exchange loss - Net finance cost significantly decreased to $0.6 million in Q1 FY24 from $14.4 million in Q1 FY23[18] - The decrease was primarily due to an $11.2 million reduction in net foreign exchange loss, driven by the appreciation of the Indian Rupee against the U.S. dollar[18] Profit (Loss) for the Period The company achieved a significant turnaround, reporting a net profit for the period compared to a loss in the prior year - The company reported a profit of $18.6 million in Q1 FY24, a significant turnaround from a loss of $10.0 million in Q1 FY23[19] - Adjusted Net Profit increased to $33.6 million in Q1 FY24 from $6.0 million in Q1 FY23[19] Diluted Earnings (Loss) per Share Diluted earnings per share turned positive, reflecting the company's improved profitability compared to a loss per share in the previous year - Diluted earnings per share was $0.17 for Q1 FY24, compared to a diluted loss per share of $0.09 in Q1 FY23[20] - Adjusted Diluted Earnings per share was $0.30 in Q1 FY24, up from $0.05 in Q1 FY23[20] Financial Position and Capital Management The company maintains a robust financial position with strong liquidity and an active capital management strategy, including share and convertible note repurchase authorizations Liquidity As of June 30, 2023, the company maintained a strong liquidity position with substantial cash and cash equivalents, supplemented by available credit facilities - Cash and cash equivalents and term deposits totaled $521.8 million as of June 30, 2023[21] - The company has existing credit facilities of approximately $119.4 million, with only $0.05 million drawn as of June 30, 2023[21] Repurchases of Shares and Convertible Notes The company has an active share repurchase plan, recently amended to extend its term and remove price limits, and has also authorized the repurchase of its 2028 convertible senior notes, with a combined remaining authority of $136.0 million - The share repurchase plan was extended until March 31, 2026, and the limit on the repurchase price per ordinary share was removed[22] - No repurchases were made under the share repurchase plan during Q1 FY24, with $136.0 million remaining authority[22] - The Board authorized the repurchase of 0.00% convertible senior notes due 2028, with the aggregate repurchase amount for shares and notes not to exceed $136.0 million[23] Company Information and Disclosures This section provides details on investor communications, explanations of non-IFRS financial measures, a safe harbor statement, and an overview of MakeMyTrip Limited's business operations Conference Call MakeMyTrip hosted a live Zoom webinar on August 1, 2023, to discuss its fiscal first quarter results, with a replay available on its investor relations website - A live Zoom webinar was held on August 1, 2023, at 7:30 AM EDT / 5:00 PM IST to discuss the Q1 FY24 results[24] - A replay of the event is available on the company's Investor Relations website[24] About Key Performance Indicators and Non-IFRS Measures The company utilizes several non-IFRS measures, including Adjusted Operating Profit, Adjusted Net Profit, Adjusted Diluted Earnings per Share, Adjusted Margin, and constant currency results, to evaluate financial performance and provide investors with a clearer view of its core operations, despite the exclusion of certain recurring costs like share-based compensation - Key non-IFRS measures include Adjusted Operating Profit (Loss), Adjusted Net Profit (Loss), Adjusted Diluted Earnings (Loss) per Share, Adjusted Margin, Adjusted Margin %, and constant currency results[25][26][31] - Adjusted Margin is calculated by adding back customer inducement costs to IFRS revenue and deducting service acquisition costs, reflecting the value addition of travel services[26][27] - These non-IFRS measures exclude items like share-based compensation, amortization of acquired intangibles, and net change in financial liability relating to acquisitions, to facilitate comparisons with competitors[28][29] Safe Harbor Statement This release contains forward-looking statements subject to various risks and uncertainties, including economic slowdowns, industry disruptions, and competition, and the company does not undertake to update these statements except as required by law - The release contains forward-looking statements regarding future growth prospects, identifiable by terms like 'may', 'will', 'expect', 'anticipate', 'aim', 'estimate', 'intend', 'plan', 'believe', 'potential', 'continue', 'is/are likely to', 'project', 'seek', 'should'[33] - These statements are subject to risks and uncertainties, including economic slowdowns in India and globally, travel industry disruptions, volatility in share price, reliance on travel suppliers, competition, and the impact of COVID-19[33] - The company does not undertake any obligation to update forward-looking statements, except as required under applicable law[33] About MakeMyTrip Limited MakeMyTrip Limited is India's leading travel group, operating prominent brands like MakeMyTrip, Goibibo, and redBus, offering a comprehensive range of online travel services and products for both domestic and international travel - MakeMyTrip Limited is India's leading travel group, operating brands including MakeMyTrip, Goibibo, and redBus[34] - The company provides a wide range of travel services and products, including air ticketing, hotel and alternative accommodations, holiday planning, rail and bus ticketing, car hire, and ancillary services like travel insurance and visa processing[34][35] Condensed Consolidated Interim Financial Statements The condensed consolidated interim financial statements provide a comprehensive overview of the company's financial position, profit or loss, changes in equity, and cash flows for the period Condensed Consolidated Interim Statement of Financial Position The unaudited interim condensed consolidated statement of financial position provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2023, compared to March 31, 2023 Condensed Consolidated Interim Statement of Financial Position (USD thousands) | | As at March 31, 2023 (USD thousands) | As at June 30, 2023 (USD thousands) | | :-------------------------------- | :----------------------------------- | :---------------------------------- | | Assets | | | | Property, plant and equipment | 25,380 | 24,801 | | Intangible assets and goodwill | 628,974 | 627,219 | | Total non-current assets | 687,915 | 687,710 | | Cash and cash equivalents | 284,018 | 333,601 | | Total current assets | 671,910 | 728,175 | | Total assets | 1,359,825 | 1,415,885 | | Equity | | | | Total equity attributable to owners of the Company | 869,566 | 897,364 | | Total equity | 876,056 | 904,016 | | Liabilities | | | | Total non-current liabilities | 30,111 | 29,619 | | Total current liabilities | 453,658 | 482,250 | | Total liabilities | 483,769 | 511,869 | | Total equity and liabilities | 1,359,825 | 1,415,885 | Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income This statement details the company's revenues, expenses, and net profit or loss for the three months ended June 30, 2023, highlighting a significant shift from a loss to a profit year-over-year Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income (USD thousands) | Metric | Q1 FY23 (USD thousands) | Q1 FY24 (USD thousands) | | :------------------------------------------ | :---------------------- | :---------------------- | | Total revenue | 142,733 | 196,731 | | Other income | 48 | 322 | | Service cost | 43,346 | 59,598 | | Personnel expenses | 31,988 | 33,831 | | Marketing and sales promotion expenses | 24,771 | 30,587 | | Other operating expenses | 31,484 | 47,101 | | Depreciation, amortization and impairment | 6,926 | 6,804 | | Results from operating activities | 4,266 | 19,132 | | Net finance costs | (14,414) | (593) | | Profit (loss) before tax | (10,123) | 18,587 | | Income tax benefit | 114 | 11 | | Profit (loss) for the period | (10,009) | 18,598 | | Total comprehensive income (loss) for the period | (35,208) | 19,154 | | Earnings (loss) per share (Diluted) | (0.09) | 0.17 | Condensed Consolidated Interim Statement of Changes in Equity This statement outlines the changes in the company's equity components for the three months ended June 30, 2023, including profit for the period, other comprehensive income, and transactions with owners Condensed Consolidated Interim Statement of Changes in Equity (USD thousands) | Equity Component | Balance as at April 1, 2023 (USD thousands) | Total comprehensive income (loss) for the period (USD thousands) | Transactions with owners (USD thousands) | Balance as at June 30, 2023 (USD thousands) | | :-------------------------------- | :------------------------------------------ | :----------------------------------------------- | :--------------------------------------- | :------------------------------------------ | | Share Capital | 53 | — | * | 53 | | Share Premium | 2,057,362 | — | 2,788 | 2,060,150 | | Other components of equity | 40,137 | 546 | 6,081 | 46,764 | | Accumulated Deficit | (1,227,986) | 18,458 | (75) | (1,209,603) | | Total equity attributable to owners of the Company | 869,566 | 19,004 | 8,794 | 897,364 | | Non-controlling interests | 6,490 | 150 | 12 | 6,652 | | Total Equity | 876,056 | 19,154 | 8,806 | 904,016 | Condensed Consolidated Interim Statement of Cash Flows This statement presents the cash flows from operating, investing, and financing activities for the three months ended June 30, 2023, showing a significant increase in cash generated from operating activities Condensed Consolidated Interim Statement of Cash Flows (USD thousands) | Cash Flow Activity | Q1 FY23 (USD thousands) | Q1 FY24 (USD thousands) | | :------------------------------------------ | :---------------------- | :---------------------- | | Profit (loss) for the period | (10,009) | 18,598 | | Adjustments for non-cash items | 30,055 | 15,175 | | Changes in working capital | (28,367) | 2,765 | | Net cash generated from (used in) operating activities | (8,321) | 36,538 | | Net cash generated from investing activities | 49,653 | 13,861 | | Net cash used in financing activities | (797) | (1,256) | | Increase in cash and cash equivalents | 40,535 | 49,143 | | Cash and cash equivalents at beginning of the period | 213,283 | 284,018 | | Effect of exchange rate fluctuations on cash held | (33) | 395 | | Cash and cash equivalents (net of bank overdraft) at end of the period | 253,785 | 333,556 | Segment Information and Non-IFRS Reconciliations This section details the company's performance by reportable segment and provides reconciliations of IFRS to non-IFRS financial measures for enhanced transparency Information About Reportable Segments This section provides a breakdown of the company's consolidated revenue and Adjusted Margin by reportable segment, illustrating the contribution of Air Ticketing, Hotels and Packages, Bus Ticketing, and Other segments to overall performance Reportable Segments Performance (USD thousands) | Particulars | Air Ticketing 2022 (USD thousands) | Air Ticketing 2023 (USD thousands) | Hotels and Packages 2022 (USD thousands) | Hotels and Packages 2023 (USD thousands) | Bus Ticketing 2022 (USD thousands) | Bus Ticketing 2023 (USD thousands) | All other segments 2022 (USD thousands) | All other segments 2023 (USD thousands) | Total 2022 (USD thousands) | Total 2023 (USD thousands) | | :------------------------------------------ | :--------------------------------- | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------- | :--------------------------------- | :-------------------------------------- | :-------------------------------------- | :------------------------- | :------------------------- | | Consolidated Revenue | 30,941 | 45,878 | 84,045 | 115,215 | 20,307 | 24,927 | 7,440 | 10,711 | 142,733 | 196,731 | | Add: Customer inducement costs | 30,191 | 28,655 | 23,966 | 29,951 | 2,200 | 2,350 | 467 | 208 | 56,824 | 61,164 | | Less: Service cost | 508 | — | 41,086 | 59,598 | 1,744 | — | 8 | — | 43,346 | 59,598 | | Adjusted Margin | 60,624 | 74,533 | 66,925 | 85,568 | 20,763 | 27,277 | 7,899 | 10,919 | 156,211 | 198,297 | - Adjusted Margin is calculated by adding back customer inducement costs (customer incentives, acquisition costs, loyalty program costs) to revenue and reducing service cost, as reported to the Chief Operating Decision Maker[47] Reconciliation of IFRS to Non-IFRS Financial Measures and Key Performance Indicators This section provides detailed reconciliations between IFRS measures and the company's non-IFRS financial measures and key performance indicators, including Adjusted Margin, Adjusted Operating Profit, Adjusted Net Profit, and Adjusted Diluted Earnings per Share, along with constant currency adjustments Reconciliation of Adjusted Operating Profit (Loss) and Adjusted Net Profit (Loss) (USD thousands) | Metric | Q1 FY23 (USD thousands) | Q1 FY24 (USD thousands) | | :------------------------------------------ | :---------------------- | :---------------------- | | Reconciliation of Adjusted Operating Profit (Loss) | | | | Results from operating activities as per IFRS | 4,266 | 19,132 | | Add: Acquisition related intangibles amortization | 3,334 | 3,135 | | Add: Employee share-based compensation costs | 8,869 | 7,872 | | Adjusted Operating Profit (Loss) | 16,469 | 30,139 | | Reconciliation of Adjusted Net Profit (Loss) | | | | Profit (Loss) for the period as per IFRS | (10,009) | 18,598 | | Add: Acquisition related intangibles amortization | 3,334 | 3,135 | | Add: Employee share-based compensation costs | 8,869 | 7,872 | | Add: Interest expense on financial liabilities measured at amortized cost | 3,709 | 3,935 | | Less: Income tax benefit | (114) | (11) | | Add: Net change in value of financial liability in business combination | 234 | 107 | | Less: Share of profit of equity-accounted investees | (25) | (48) | | Adjusted Net Profit (Loss) | 5,998 | 33,588 | Reconciliation of Adjusted Diluted Earnings (Loss) per Share (USD) | Metric | Q1 FY23 (USD) | Q1 FY24 (USD) | | :------------------------------------------ | :------------ | :------------ | | Reconciliation of Adjusted Diluted Earnings (Loss) per Share | | | | Diluted Earnings (Loss) per Share as per IFRS | (0.09) | 0.17 | | Add: Acquisition related intangibles amortization | 0.03 | 0.03 | | Add: Employee share-based compensation costs | 0.08 | 0.07 | | Add: Interest expense on financial liabilities measured at amortized cost | 0.03 | 0.03 | | Less: Income tax benefit | * | * | | Add: Net change in value of financial liability in business combination | * | * | | Less: Share of profit of equity-accounted investees | * | * | | Adjusted Diluted Earnings (Loss) per Share | 0.05 | 0.30 | Revenue and Adjusted Margin Growth (YoY %) | Segment | Revenue Reported Growth (YoY %) | Revenue Constant Currency Growth (YoY %) | Adjusted Margin Reported Growth (YoY %) | Adjusted Margin Constant Currency Growth (YoY %) | | :------------------ | :------------------------------ | :--------------------------------------- | :-------------------------------------- | :----------------------------------------------- | | Air Ticketing | 48.3 | 57.4 | 22.9 | 30.4 | | Hotels and Packages | 37.1 | 45.2 | 27.9 | 36.1 | | Bus Ticketing | 22.8 | 30.5 | 31.4 | 39.7 | | Others | 44.0 | 53.0 | 38.2 | 46.9 | | Total | 37.8 | 46.2 | - | - | Selected Operating and Financial Data This section presents key operating metrics and gross bookings data, highlighting performance across various segments and overall business growth Unit Metrics and Gross Bookings The selected operating data highlights strong growth in key unit metrics across all segments, including flight segments, hotel room nights, and bus tickets, contributing to a substantial increase in gross bookings Unit Metrics (thousands) | Unit Metric | Q1 FY23 (thousands) | Q1 FY24 (thousands) | | :-------------------------------- | :------------------ | :------------------ | | Air Ticketing – Flight segments | 9,592 | 12,793 | | Hotels and Packages – Room nights | 6,566 | 7,876 | | Standalone Hotels – Online – Room nights | 6,357 | 7,610 | | Bus Ticketing – Travelled tickets | 18,719 | 22,223 | Gross Bookings by Segment (USD thousands) | Gross Bookings Segment | Q1 FY23 (USD thousands) | Q1 FY24 (USD thousands) | | :--------------------- | :---------------------- | :---------------------- | | Air Ticketing | 987,323 | 1,212,718 | | Hotels and Packages | 388,550 | 497,987 | | Bus Ticketing | 236,602 | 276,784 | | Total Gross Bookings | 1,612,475 | 1,987,489 | Adjusted Margin % by Segment (%) | Adjusted Margin % Segment | Q1 FY23 (%) | Q1 FY24 (%) | | :------------------------ | :---------- | :---------- | | Air Ticketing | 6.1 | 6.1 | | Hotels and Packages | 17.2 | 17.2 | | Bus Ticketing | 8.8 | 9.9 |