Online Travel Portal MakeMyTrip Posts Net Revenue Of $137.4 Mn For Q1 2018-19

Online travel company MakeMyTrip posted a net revenue of $137.4 Mn for the first fiscal quarter ended June 30, 2018. The online travel company had posted a net revenue of $192 Mn for the corresponding quarter in the previous financial year.

Company’s net loss stood at $51 Mn for Q1 2018-19, a reduction of almost 25 % from the $68.4 Mn for Q1 FY2017-18.

As stated by MakeMyTrip during its earnings call, effective from April 1, 2018, the company adopted new revenue recognition standard IFRS 15. This implies —

“Under IFRS 15, promotion expenses in the nature of customer inducement/acquisition costs for acquiring customers and promoting transactions across various booking platforms such as upfront cash incentives and select loyalty programs cost, which when incurred were previously recorded as marketing and sales promotion costs, are now being recorded as a reduction of revenue. We have adopted the new standard by using the cumulative effect method and accordingly the comparative information has not been restated.”

If considered the non-IFRS measures, company’s net revenue for Q1 FY19 stands at $170 Mn, against $141.2 Mn in Q1 FY18. Also, the net loss for Q1 FY 19 will be $38 Mn in comparison to $52 Mn in Q1 FY 18.

In its US Securities and Exchange Commission filings –the company while announcing the unaudited financial results for the quarter ended June 30, 2018 –MakeMyTrip stated that the financial and operating results for the fiscal 2019 first quarter include the financial and operating results of ibibo Group Holdings (Singapore) Pte. Ltd. and its subsidiaries (“ibibo Group”) which it acquired on January 31, 2017.

“The strong financial performance during the quarter reflects our success in the ongoing pursuit of high business growth with continued cost optimization,” said Deep Kalra, Group Chairman and Group CEO.

He further added, “By leveraging our multiple brands and introducing relevant product and technology innovations, we have been able to achieve greater loyalty from existing customers as well as welcome many first-time internet users onto our booking platforms across India.”

Previous Revenue Trend For MakeMyTrip [Non-IFRS Measures]

In FY17, MakeMyTrip’s total net revenue stood at $413 Mn (INR 2889.48 Cr) and in FY18, it recorded a total net revenue of $577.1 Mn, which is a 39.5% increase in comparison to FY17.

MakeMyTrip: Plans Ahead For Q2019

MakeMyTrip has been super active on the acquisition front and has been receiving regular funding from its parent company in the US.

As shared during the earnings call, the company added a shortlisting option on the Android app. Also, aiming to constantly improve content on the platform, the flight team launched flight comfort and amenities feature.

It was also highlighted that while the market for intercity bus ticketing business in India is $3.5 Bn, online penetration is only 40% of the overall market, of which 10% of the government-owned and operated inter-city bus market operated in the country is lead by MakeMyTrip’s bus ticket booking subsidiary redBus.

Other expansion measures taken by MakeMyTrip recently:

• The parent company has infused over $24.74 Mn (INR 170 Cr) in its Indian arm in the current calendar year, as revealed by the ROC filings.

• Prior to this, the company had been valued at $3.8 Bn when its parent company invested through rights issue in July.
• MakeMyTrip had recently invested in Bitla Software, adding it to its existing portfolio companies such as Fabhotels, GoFro, HolidayIQ, Inspirock, ixigo.com, Simplotel, and Mygola.com.
• Last month, MakeMyTrip partnered with Flipkart, wherein the ecommerce company will offer travel services of MakeMyTrip –along with Goibibo and redBus –on its platform.
• It has also partnered with hotel aggregator OYO to bring together OYO’s economy, mid-segment and vacation rental assets, and MakeMyTrip’s travel customer base.

MakeMyTrip group after its merger with Ibibo has been spending significantly on customer inducement and acquisition. Through acquisitions and partnerships, the company aims at becoming the unchallenged player in the lucrative online travel industry. With central government’s digital drive, there is ample opportunity in this space for the company to scale ahead.

According to a June 2017 Google India-BCG report, the country’s overall travel market is estimated to become a $48 Bn industry within the next three years.

A management consulting firm Praxis Global said in its report 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.