MakeMyTrip(MMYT) - 2023 Q4 - Annual Report

Performance Overview The company achieved robust financial growth in fiscal year 2023, driven by a strong recovery in travel demand and strategic operational improvements Management Commentary The Group CEO reported strong FY2023 financial results, driven by robust travel demand recovery and strategic cost optimization - Gross Bookings saw a year-over-year (YoY) constant currency growth of over 120% in fiscal year 2023[6] - Adjusted Operating Profit for fiscal year 2023 increased by over 200% YoY, demonstrating significant profitability expansion[6] - The company's strategy focused on targeted investments and cost optimization, which helped strengthen its market position[6] Financial Highlights FY2023 financial highlights include substantial growth in gross bookings and revenue, with Adjusted Operating Profit reaching $70.3 million Full Year Fiscal 2023 vs 2022 Financial Summary | Financial Metric | FY 2022 ($) | FY 2023 ($) | YoY Change | YoY Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Gross Bookings | $3,188.9M | $6,566.2M | +105.9% | +122.0% | | Revenue | $303.9M | $593.0M | +95.1% | +110.3% | | Results from Operating Activities | ($30.4M) | $23.6M | - | - | | Profit (Loss) for the period | ($45.6M) | ($11.2M) | - | - | | Adjusted Operating Profit | $23.2M | $70.3M | +203.3% | - | | Adjusted Net Profit | $21.7M | $52.9M | +144.0% | - | Q4 Fiscal 2023 vs 2022 Financial Summary | Financial Metric | Q4 2022 ($) | Q4 2023 ($) | YoY Change | YoY Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Gross Bookings | $1,012.3M | $1,673.9M | +65.4% | +80.7% | | Revenue | $88.6M | $148.5M | +67.7% | +82.9% | | Results from Operating Activities | $3.4M | $8.0M | +135.3% | - | | Profit (Loss) for the period | ($4.1M) | $5.4M | - | - | | Adjusted Operating Profit | $12.0M | $19.0M | +58.3% | - | Impact of the COVID-19 Pandemic Fiscal year 2023 saw significant travel demand recovery, improving results across all segments, despite lingering uncertainties - Fiscal year 2023 experienced significant growth in travel demand due to high pent-up demand and improved consumer sentiment as the impact of the pandemic diminished[9] - The recovery in FY2023, coupled with cost optimization efforts, led to improved results across all operating segments compared to FY2022[9] - The long-term effects of the pandemic on the business remain uncertain and depend on factors like the severity of new variants and their impact on travel and consumer spending[10] Financial Performance Analysis The company achieved a significant financial turnaround in FY2023, marked by substantial revenue growth, improved profitability, and robust liquidity Q4 FY2023 Performance Q4 FY2023 revenue grew to $148.5 million, turning a net loss into a $5.4 million profit, driven by strong segment recovery Revenue and Segment Performance Q4 FY2023 revenue increased by 67.7% to $148.5 million, driven by strong recovery across all segments, notably Hotels and Packages - Total revenue for Q4 FY2023 increased by 67.7% YoY (82.9% in constant currency) to $148.5 million, primarily due to strong recovery in travel demand[11] Q4 FY2023 Segment Performance (YoY Growth, Constant Currency) | Segment | Revenue Growth (%) | Adjusted Margin Growth (%) | | :--- | :--- | :--- | | Air Ticketing | +67.6% | +81.0% | | Hotels and Packages | +98.1% | +64.2% | | Bus Ticketing | +63.3% | +70.8% | | Others | +72.3% | +73.5% | - The Hotels and Packages segment's Adjusted Margin % decreased to 16.3% from 17.7% YoY, mainly due to a higher proportion of lower-margin packages and international hotel bookings[16] Operating Expenses Q4 FY2023 operating expenses increased across personnel, marketing, and other categories, reflecting higher variable costs and strategic investments - Personnel expenses rose 11.3% YoY to $33.7 million due to annual wage increases[19] - Marketing and sales promotion expenses increased by 92.4% YoY to $23.2 million, driven by higher variable costs and discretionary spending on brand initiatives in response to travel recovery[20] - Other operating expenses grew 79.1% YoY to $34.1 million, primarily due to increased booking-related costs like payment gateway charges and a one-time reversal of a provision in the prior-year quarter[21] Profitability and Earnings Q4 FY2023 profitability improved significantly, with operating profit increasing and a turnaround to net profit, alongside reduced net finance costs Q4 FY2023 Profitability Metrics | Metric | Q4 2022 ($) | Q4 2023 ($) | | :--- | :--- | :--- | | Results from Operating Activities | $3.4M | $8.0M | | Adjusted Operating Profit | $12.0M | $19.0M | | Profit (Loss) for the Period | ($4.1M) | $5.4M | | Adjusted Net Profit | $8.7M | $23.1M | | Diluted EPS | ($0.04) | $0.05 | | Adjusted Diluted EPS | $0.08 | $0.21 | - Net finance costs decreased to $2.6 million from $6.9 million YoY, mainly due to a lower net foreign exchange loss[24] Full Year FY2023 Performance FY2023 saw revenue nearly double to $593.0 million, transforming an operating loss into a $23.6 million profit, with net loss significantly narrowing Revenue and Segment Performance FY2023 total revenue increased by 95.1% to $593.0 million, driven by strong recovery across all segments, particularly Hotels and Packages - Total revenue for FY2023 increased by 95.1% YoY (110.3% in constant currency) to $593.0 million, driven by the diminishing impact of the COVID-19 pandemic[27] FY2023 Segment Performance (YoY Growth, Constant Currency) | Segment | Revenue Growth (%) | Adjusted Margin Growth (%) | | :--- | :--- | :--- | | Air Ticketing | +79.6% | +94.2% | | Hotels and Packages | +131.5% | +94.2% | | Bus Ticketing | +102.0% | +117.2% | | Others | +95.9% | +98.6% | - The Air Ticketing segment's Adjusted Margin % decreased to 6.8% from 8.0% YoY, primarily due to increased air fares without a corresponding increase in fixed revenue earned per booking[31] Operating Expenses FY2023 operating expenses increased across personnel, marketing, and other categories, reflecting higher variable costs and strategic investments - Personnel expenses increased 12.9% YoY to $132.0 million due to annual wage increases[35] - Marketing and sales promotion expenses rose 99.1% YoY to $101.6 million, reflecting increased variable costs and discretionary spending to capture the travel demand recovery[36] - Other operating expenses increased 63.9% YoY to $133.7 million, mainly due to a $46.2 million rise in booking-related costs like payment gateway and outsourcing fees[38] Profitability and Earnings FY2023 profitability significantly improved, with a turnaround to operating profit and a substantial narrowing of net loss, despite increased finance costs Full Year FY2023 Profitability Metrics | Metric | FY 2022 ($) | FY 2023 ($) | | :--- | :--- | :--- | | Results from Operating Activities | ($30.4M) | $23.6M | | Adjusted Operating Profit | $23.2M | $70.3M | | Profit (Loss) for the Period | ($45.6M) | ($11.2M) | | Adjusted Net Profit | $21.7M | $52.9M | | Diluted EPS | ($0.42) | ($0.10) | | Adjusted Diluted EPS | $0.20 | $0.48 | - Net finance costs increased to $35.8 million from $16.3 million YoY, primarily due to a $17.4 million increase in net foreign exchange loss resulting from the depreciation of the Indian Rupee against the U.S. dollar[41] Liquidity and Financial Position As of March 31, 2023, the company maintained strong liquidity with $486.7 million in cash and $119.2 million in undrawn credit facilities - The balance of cash and cash equivalents and term deposits was $486.7 million as of March 31, 2023[44] - The company has existing credit facilities of approximately $119.2 million, none of which were drawn as of March 31, 2023[44] Corporate Developments This section outlines recent corporate actions, including the impact of a key airline supplier's insolvency and strategic share and note repurchase authorizations Recent Developments (Go First Insolvency) The voluntary insolvency filing by Go First, a key airline supplier, poses a risk of reduced air ticket supply and potential impact on gross bookings - On May 2, 2023, Go Airlines (India) Limited (Go First), a top five domestic airline supplier, filed for voluntary insolvency resolution proceedings[45] - The disruption could reduce the supply of air tickets available on MakeMyTrip's platform, potentially impacting gross bookings, revenue, and operating results[46] - MakeMyTrip is extending cooperation to its customers impacted by the suspension of Go First flights[47] Share and Note Repurchases The Board extended the share repurchase plan and authorized repurchases of 2028 convertible notes, with a combined cap of $136.0 million - The Board of Directors extended the term of the share repurchase plan until March 31, 2026[48] - As of March 31, 2023, the company had remaining authority to repurchase up to $136.0 million of its outstanding ordinary shares[48] - On May 16, 2023, the Board authorized the company to also use the $136.0 million authority to repurchase its 0.00% convertible senior notes due 2028[49] Appendix: Financial Statements and Reconciliations This appendix provides detailed consolidated financial statements, non-IFRS reconciliations, and key operating metrics supporting the reported financial performance Consolidated Financial Statements The consolidated financial statements detail the company's financial health, showing increased assets, significant revenue growth, narrowed net loss, and positive cash flow Statement of Financial Position (Balance Sheet) The Statement of Financial Position shows total assets increased to $1.36 billion, with changes in cash, intangible assets, liabilities, and equity Key Balance Sheet Items (in thousands USD) | Item | As at March 31, 2022 (USD thousands) | As at March 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Total Assets | $1,322,744 | $1,359,825 | | Cash and cash equivalents | $213,283 | $284,018 | | Intangible assets and goodwill | $685,658 | $628,974 | | Total Liabilities | $426,269 | $483,769 | | Total Equity | $896,475 | $876,056 | Statement of Profit or Loss (Income Statement) The Statement of Profit or Loss highlights significant revenue growth to $593.0 million and a substantial narrowing of the net loss in FY2023 Key Income Statement Items (in thousands USD) | Item | For the year ended March 31, 2022 (USD thousands) | For the year ended March 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Total Revenue | $303,922 | $593,036 | | Result from operating activities | ($30,366) | $23,604 | | Profit (loss) for the period | ($45,567) | ($11,168) | | Diluted Earnings (loss) per share | ($0.42) | ($0.10) | Statement of Cash Flows The Statement of Cash Flows indicates positive cash generation from operating activities and a shift to positive cash flow from investing activities Net Cash Flow Summary (in thousands USD) | Activity | For the year ended March 31, 2022 (USD thousands) | For the year ended March 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Net cash from operating activities | $5,998 | $32,065 | | Net cash from investing activities | ($77,604) | $46,776 | | Net cash from financing activities | ($9,569) | ($6,207) | | Increase (decrease) in cash | ($81,175) | $72,634 | Non-IFRS Reconciliations and Key Metrics This section reconciles IFRS to non-IFRS measures like Adjusted Operating Profit and presents key operating metrics, highlighting significant increases in travel bookings Reconciliation of Operating Results to Adjusted Operating Profit (FY2023, in thousands USD) | Item | Amount (USD thousands) | | :--- | :--- | | Results from operating activities (IFRS) | $23,604 | | Add: Acquisition related intangibles amortization | $12,812 | | Add: Employee share-based compensation costs | $35,643 | | Less: Gain on discontinuation of equity accounted investment | ($2,017) | | Add: Merger and acquisitions related expenses | $270 | | Adjusted Operating Profit (Non-IFRS) | $70,312 | Selected Operating Metrics (Units in thousands) | Unit Metric | FY 2022 (thousands) | FY 2023 (thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Air Ticketing – Flight segments | 24,704 | 43,882 | +77.6% | | Hotels and Packages – Room nights | 15,595 | 26,101 | +67.4% | | Bus Ticketing – Travelled tickets | 39,491 | 73,048 | +85.0% |