MakeMyTrip Cuts Losses In December Quarter, Stock Surges 11%

Gurugram-headquartered online travel company MakeMyTrip posted financial results for the third quarter of the FY2018-19 with a 31.4% Y-o-Y growth in adjusted revenue, reaching $179.9 Mn.

For the fiscal quarter ended December 30, 2018, the NASDAQ-listed company increased its gross bookings to $1.4 Bn, a 16.67% Q-o-Q growth against $1.2 Bn in the Q2 FY2018-19 ending September 2018.

At the same time, MakeMyTrip’s loss for Q3 FY2018-19 recorded a 34% control reaching $29 Mn against $45 Mn in Q3 FY2017-18. However, the total revenue of the company for Q3 FY 2018-19 was $124.8 Mn, a 27% Y-o-Y decline against $171.4 Mn in Q3 FY2017-18.

The recorded fall in total revenue might be due to the reduced revenue from hotels and packages for the quarter which fell 49%, reaching $58 Mn against $113.72 Mn in Q3 FY2017-18. Also, the financials revealed that in Q3 FY2018-19, the personnel expenses for the company also increased by 10.2% to $29.6 Mn in Q3 FY19.

But this did not have much impact on the company’s overall financials. Interestingly, the company’s stock also went up by 11%, post announcement of the Q3 FY2017-18 financials.

Deep Kalra, Group Chairman and Group CEO said, “Our focused execution during the quarter has allowed us to gain further market share, reaccelerate the year on year growth rate in total gross bookings, adjusted revenue, standalone hotel room nights and drive greater marketing and promotional spend efficiencies to further narrow our operating losses.”

Other Key Metrics of Q3 FY2018-19

• The standalone room nights increased to 6 Mn, a 27.1% YoY growth
• Air ticketing – flight segments increased by 19.4% YoY,  reaching 10 Mn, against 8 Mn in Q3 FY18.
• The revenue for flights segment increased to $43 Mn, against $40 Mn in the quarter last year
• The bus ticketing – travelled tickets increased by 58.3% YoY, reaching 16 Mn from 10 Mn in the same quarter of FY18.
• Marketing and sales promotion expenses decreased by 54.4% to $49.7 Mn
• The company’s results from Operating Activities was a loss of $36.57 Mn, against $48.2 Mn in the same quarter for FY18.

Dwindling State Of Online Hotel Booking Sector

A report by Praxis Global said that online travel market in India, led by flight and hotel aggregators, is expected to touch $13.6 Bn by 2021, and will account for almost 43% of the total travel category in the country.

However, with the start of the year 2019, the online hotel booking companies like OYO, MakeMyTrip, GoIbibo are facing a thrashing from the hotel associations across the country.

The Sikkim Hotels & Restaurants Association (SHRA) has recently agreed to not continue conducting business with Goibibo-MakeMyTrip (Go-MMT) until the concerns raised by the association are resolved.

Also, the Federation of Hotel and Restaurant Associations of India (FHRAI), an all India body of hotel owners and operators, has alleged that more than 200 hotels have ended agreements with hospitality chain OYO over mismanagement of contracts, arbitrary charges and other disputes.

Amid such a volatile atmosphere, it is worth asking that will MakeMyTrip be able to maintain its growth in the next quarter? Also, one company that is still aloof from all this discussion is Yatra which posted a strong control over its losses in Q2 FY2018-19. Well, this is a story for some other time!

Stay tuned!

[With inputs from Meha Agarwal and Aditya Kondalamahanty]