Gurugram and New York-headquartered online travel aggregator MakeMyTrip has announced its financial performance for the first quarter of fiscal year 2020. The company has reported that it continued to narrow down its losses on Y-o-Y basis but failed to improve it on Q-o-Q basis.
The company said that its loss narrowed down from $51.2 Mn in Q1 FY19 to $42.5 Mn in Q1 FY20. Interestingly, the loss in Q4 FY19 was $40.3 Mn, thus, indicating a 5.45% increase in losses.
Deep Kalra, group CEO, MakeMyTrip said, “Our continued focus on outbound travel and other high growth segments has allowed us to grow faster than the domestic market growth while we narrowed our operating losses year over year.”
At the same time, revenues continue to be steady and growing, in both Y-o-Y and Q-o-Q terms. The company reported a revenue of $141.37 Mn in Q1 FY20, a 3.14% Y-o-Y increase and a 17.9% Q-o-Q increase.
Narrowing down on the performance of key contributors to its revenue, the company’s major source of revenue continued to be hotels and packages, bringing a 48% share of revenue at $68.5 Mn. However, analysing Y-o-Y share of revenue, we noted that the percentage share of hotels, air and bus has fluctuated in FY 19.
From 29.4% contribution to revenue by air ticketing in Q1 FY19, the contribution has increased to 31.4% in Q1 FY20. Along the same lines, bus ticketing also increased revenue share from 10.9% to 12.9% between Q1 FY19 and Q1 FY20.
Founded in 2000 by Deep Kalra, MakeMyTrip functions as an online travel aggregator. Its services include air ticketing, hotel and alternative accommodation bookings, holiday planning and packaging, rail ticketing, bus ticketing, car hire and ancillary travel requirements. On August 17, 2010, MakeMyTrip Limited was listed on the NASDAQ after its initial public offering at $14 per share.
Deep Kalra, group CEO, MakeMyTrip said, “MakeMyTrip continued to drive strong business growth during this peak travel quarter, despite softer domestic travel demand that was driven by a challenging macroeconomic and supply environment.”
In terms of performance of the company’s operating metrics, it is interesting to note that air ticketing transactions improved by 15.7% reaching 10.6 Mn, hotel packages room nights improved 12% reaching 7.5% and travelled bus tickets improved 40% reaching 20.98 Mn.
In case of marketing and promotion expenses, which includes promotion expenses which is deducted to calculate adjusted performance indicators under non-IFRS measures, the company reported a 2.5% Y-o-Y improvement. The marketing and promotion expenses reached $54.4 Mn in Q1 Fy20, from $55.9 Mn in Q1 FY19.
MakeMyTrip attributed this to the favorable impact of foreign currency translation due to the depreciation of the Indian Rupee against the US dollar in the quarter ended June 30, 2019.
Also, the company increased its personnel expenses by 15.6% on Y-o-Y basis reaching $31.2 Mn from $27 Mn in Q1 FY19.
During the earnings call, Kalra highlighted MMT’s business travel strategy, sharing details of the pilot during the quarter of an “online end-to-end enterprise grade solution” for large corporates. This pilot came after MakeMyTrip acquired Quest2Travel in May, which marked its entrance into the corporate travel space. The company says it has signed up several large corporates in India to use the technology.
It also shared the launch of rPool, a car-pooling application by RedBus, to help daily commuters and ease urban congestion. Overall the company says it is confident about the “long-term growth opportunities” with India’s increasing internet penetration, developing digital and payments ecosystem and young population all helping to drive consumers to online platforms.
Despite a positive outlook, the company’s stock has been falling since it announced the results. Despite a great initial start after the results came, in last three days, the stock has fallen by 6.94% as on August 2, 4 PM US Time.