MakeMyTrip Q2 Results: Loss Narrows 15% YoY To $6.8 Mn On Travel Demand Recovery

Nasdaq-listed Indian traveltech company MakeMyTrip on Tuesday reported a 15% decline in its net loss to $6.8 Mn in the quarter ending September 30 of the financial year 2022-23 (FY23) as against a loss of $8 Mn in the corresponding quarter last year as the global travel industry continues to recover from the impact of the Covid-19 pandemic.

Sequentially, MakeMyTrip’s loss narrowed 32% from $10 Mn reported in the April-June quarter of FY23.

Total revenue jumped over 94% to $131.2 Mn in Q2 FY23 from $67.5 Mn in the same quarter of previous fiscal year. However, the revenue declined 8% sequentially from $142.7 Mn in the preceding quarter. 

Adjusted EBIT improved to $15.1 Mn as against $6.6 Mn reported in the same quarter of FY22.

The company’s air ticketing revenue grew to $39.6 Mn in Q2 FY23 from $21.3 Mn in Q2 FY22. On the other hand, revenue from hotels and packages more than doubled to $68.2 Mn in the reported quarter from $33.5 Mn in the same period last year.

Improving domestic travel demand helped MakeMyTrip achieve strong growth even in a seasonally weak quarter, the company said as it witnessed a 126.3% year-on-year (YoY) surge in gross bookings to about $1.5 Bn in Q2. 

“Travel continues to rebound on the back of waning COVID-19 infections and positive consumer segment,” MakeMyTrip Group CEO Rajesh Magow said, adding that the company continues to garner a major share of travel demand on the back of its robust multi-product platform and customer-first approach.

However, MakeMyTrip said that business travel continues to see a muted recovery compared to leisure travel.

The company reported operating profit of $3.9 Mn during the quarter under review as against a loss of $8 Mn in Q2 FY22.

MakeMyTrip saw its highest expenditure in the form of personnel expenses, which increased 12.3% YoY to $33.5 Mn in Q2, primarily due to annual wage increases.

The company’s marketing and sales promotion expenses also rose 113.5% to $24.8 Mn during the quarter from $11.6 Mn Q2 FY22. 

The increase in marketing expenses was primarily driven by the rise in variable costs and expenses on events and brand-building initiatives in response to the strong recovery in domestic travel demand, MakeMyTrip said.

The traveltech startup witnessed a 77.7% jump in its other operating expenses to $32.5 Mn In Q2 FY23, driven by a $7.2 Mn increase in payment gateway charges, $2.8 Mn of outsourcing fees, and $1.7 Mn of website hosting charges due to increased booking.

At a time when MakeMyTrip’s business seems to be recovering from the impact of the Covid-19 pandemic, Indian competition watchdog Competition Commission of India (CCI) has slapped a fine of INR 223.48 Cr on MakeMyTrip-Goibibo for alleged unfair business practices.

MakeMyTrip and Goibibo completed their merger in 2017, but operate individually.

On the CCI penalty, MakeMyTrip said, “The CCI order is appealable before the National Company Law Appellate Tribunal of India within 60 days from receipt of the certified copy of the order. We are assessing the findings set forth in the CCI order and plan to obtain advice from external legal counsel in determining our future course of action.” 

Besides, the company stated that the extent and duration of the effects of the pandemic continue to remain uncertain pertaining to the business’s long-term journey, its results of operations, cash flows and growth prospects.

MakeMyTrip’s balance of cash and cash equivalents and term deposits on its balance sheet stood at $466.3 Mn at September end.