MakeMyTrip(MMYT) - 2026 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an adjusted operating profit of $50.7 million, marking the first time it exceeded $50 million in a quarter, with an adjusted net profit of approximately $51.4 million, reflecting a year-on-year growth of 33% in adjusted diluted EPS [18][19][20] - The adjusted operating margin improved from 1.76% to 1.82% of gross bookings year-on-year, indicating better profitability despite disruptions [18][19] - The gross booking value (GBV) growth was about 15.9%, which was impacted by a reduction in the tax component due to GST changes, rather than indicating structural weakness [9][16] Business Segment Data and Key Metrics Changes - The air ticketing segment saw an adjusted margin of $107.9 million, with a year-on-year growth of 20.4% in constant currency, driven by international air ticketing, which now accounts for 43% of the adjusted margin [15][16] - The accommodation business, including hotels and packages, recorded a strong volume growth of 20.3% year-on-year, with standalone hotels growing at 20.6% [15][16] - The bus ticketing business achieved an adjusted margin of $42.4 million, with a year-on-year growth of over 26.1% in constant currency [17] Market Data and Key Metrics Changes - Domestic air market growth was only 0.9% year-on-year, while the company managed to achieve a 2.2% growth, gaining market share to over 31% [15][16] - The company reported strong demand recovery in the Indian travel market, particularly during the festive season, despite temporary disruptions in December due to new flight duty time limitation rules [3][4] Company Strategy and Development Direction - The company is focusing on leveraging AI to enhance customer experience and streamline operations, with the AI model "Mira" now handling over 50,000 conversations daily [5][6] - The introduction of new features, such as end-to-end visa guidance for international flights, aims to improve user engagement and conversion rates [8] - The company is expanding its product offerings, including tours and activities, to provide a comprehensive travel experience for Indian travelers [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential of the Indian travel market, driven by economic, social, and technological factors [4] - The company anticipates that the disruption in flight operations will stabilize, with a return to positive growth in the domestic air market expected in the upcoming quarters [44] - Management highlighted the importance of maintaining direct traffic to the platform amidst increasing competition from AI tools in trip planning [51][55] Other Important Information - The company has repurchased approximately $46.1 million worth of shares as part of its buyback program, which is the highest in-market buyback to date [19][20] - The integration of the travel expense management platform Happay has been completed, enhancing the corporate travel offerings [13] Q&A Session Summary Question: Can you break down the growth in the standalone hotels segment by premium and budget segments? - Management noted that the non-premium segment saw stronger growth at about 23% year-on-year, while overall margins remained stable at around 17.7% [22][23] Question: What is the underlying margin for the growth in ancillary services? - Management indicated that the growth in ancillary services has been a continuing trend, with various new services being added to the platform, contributing to overall growth [25][27] Question: How should we think about the normalized growth for the hotel business? - Management explained that the GST rationalization has impacted growth, but they expect to see a return to previous growth rates over the next few quarters [36][41] Question: What is the outlook for domestic air traffic growth given the capacity cuts by IndiGo? - Management expects a return to positive growth in domestic air traffic, albeit at a modest rate, as the industry stabilizes [42][44] Question: How is the feedback on Mira, and how does the company view competition from AI tools? - Management reported encouraging metrics for Mira, with significant user engagement and a focus on trip planning, while viewing AI tools as an opportunity rather than a threat [48][51]