MakeMyTrip(MMYT) - 2026 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a strong performance in Q3, with adjusted operating profit reaching $50.7 million, marking a year-on-year growth of 20.4% in constant currency [17][20] - The adjusted net profit was approximately $51.4 million, with adjusted diluted EPS growing by about 33% year-on-year [20] - The adjusted operating margin improved from 1.76% to 1.82% of gross bookings compared to the same quarter last year [20] Business Line Data and Key Metrics Changes - The air ticketing segment saw an adjusted margin of $107.9 million, with international air ticketing now accounting for about 43% of the adjusted margin [17] - The hotels and packages segment recorded a strong volume growth of 20.3% year-on-year, driven by leisure travel demand and a reduction in GST rates for hotel rooms priced under INR 7,500 [18] - The bus ticketing business achieved an adjusted margin of $42.4 million, reflecting a year-on-year growth of over 26.1% in constant currency [19] Market Data and Key Metrics Changes - Domestic air market growth was impacted by new flight duty rules, leading to a year-on-year decline of 5% in daily departures in December [8] - Despite disruptions, the company managed to capture demand through other transport modes, indicating resilience in the overall travel market [3][8] - The company reported strong growth in international travel, which presents significant opportunities for expansion [8] 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 [4][5] - A one-stop-shop strategy is being implemented to meet all travel-related needs, including the recent launch of tours and activities, providing access to over 200,000 bookable activities [7] - The company aims to deepen penetration into tier-two cities, with over 45% of Mira users coming from these areas [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the Indian travel market, driven by economic, social, and technological factors [4] - The festive season and long weekends have fueled demand, reinforcing the trend of increased spending on travel among Indian consumers [3] - Management acknowledged the impact of regulatory changes on operations but remains optimistic about future growth opportunities [16] Other Important Information - The company has repurchased 0.55 million shares for approximately $41.5 million as part of its buyback program, which totaled about $46.1 million for the quarter [21] - Cash equivalents at the end of the quarter stood at over $800 million, allowing for continued investment in growth capabilities [21] Q&A Session Summary Question: Can you break down the growth in the standalone hotels segment by premium and budget segments? - The standalone hotel room nights grew by 20.6%, with the non-premium segment seeing stronger growth at about 23% year-on-year, while margins remained stable at around 17.7% [24][25] Question: Can you quantify the underlying margin for the growth in ancillary services? - The growth in ancillary services has been strong, with various new services being added, contributing to overall growth, but specific margins were not disclosed [30] Question: What is the outlook for hotel revenue growth given the recent slowdown? - The slowdown is attributed to GST impacts, but management expects growth to normalize over the next four quarters [39][43] Question: How will the disruption in domestic air traffic affect future growth? - Management anticipates a return to positive growth in domestic air traffic, with estimates suggesting a 1-2% year-on-year growth in the upcoming quarter [46] Question: What is the feedback on the AI tool "Mira" and its competition? - "Mira" has shown promising growth, with a significant increase in interactions and quality scores, and management views the rise of AI tools as an opportunity rather than a threat [49][53]