Pilot Strikes Did Not Adversely Impact Ticketing Business: Makemytrip Reports $8b Bookings And 70% Profit Growth In Fy24

Disruption in air-ticketing business ended up benefiting bus-ticketing and other transport businesses, said MakeMyTrip officials during a shareholder’s meeting for FY24. As per the company’s financial result, it had a gross booking value of nearly $8 billion for FY24. Further, gross booking value for Q4 was more than $2 billion, growing at 23 percent year-on-year in constant currency terms, and the adjusted operating profit was $32.4 million, registering a growth of over 70 percent year-on-year, said Rajesh Magow, Co-Founder & Group Chief Executive Officer, during a shareholder’s call.

Following the financial results, MakeMyTrip talked about its future expectations for its various businesses for the next year. Officials were particularly optimistic about the transport business despite low online penetration in India. The company also talked about pursuing opportunistic sale repurchases or buybacks considering improving cash generation in the business.

“As reported in the past, we have been and will continue to leverage our employee stock option plans to be an important part of our people strategy. We could start with opportunistic buybacks to mitigate the dilution from our share-based compensation programs,” said Mohit Kabra, Group Chief Financial Officer.

Kabra also talked about two exceptional items or one-off items that impacted Q4 as well as FY24. The first is the recognition of net deferred tax assets amounting to $126.1 million based on an estimated utilization of carried forward losses and other deductible temporary differences against future taxable income. The other one-off item is the change in the carrying value of the company’s 2028 zero coupon convertible notes.

Aside from this, here’s what was discussed regarding the company’s various businesses:

Bus Ticketing Business

Headwinds for air-ticketing benefitted ground transport: Kabra said that the difficulties faced on the domestic air supply side resulted in strong growth for ground transport segments as travellers moved to other modes of transport. The Adjusted Margin for Bus Ticketing increased by 36.6 percent YoY in Q4FY24 to $26.1 million and by 36.1 percent YoY in FY24 to $102.1 million.

“The bus volumes [is growing] at about 17% on our platform, rail is growing at about 30% and intercity cab also growing at a very healthy percentage,” said Magow.

Regarding future performance, Kabra said online penetration across travel services in India is still very low but the company expects “meaningful growth opportunities” in coming years.

“We continue to remain focused on operating cost efficiencies. Our marketing and sales promotion expenses or our customer exchange costs for the year came in at about 4.7 percentage points of gross booking compared to 5.1 percentage points in the previous year,” he said.

RedBus entering international business: Magow said MakeMyTrip-owned RedBus is trying to go to various international destinations. In Q4, Make My Trip launched the service in Vietnam and Cambodia as well.

“So wherever we see there is a large bus market, we already have a playbook that has worked very well in India. We are taking it to those markets as well, which is again our mid-term to long-term play, but that is another sort of aspect of our international business growth,” he said.

International bus markets witnessed growth in Q4 as well due to Ramadan bookings in Southeast Asian markets and Good Friday Easter holiday bookings in Latin America.

Air ticketing Business

Growth percentage for international and domestic flights: While Adjusted Margin for overall Air Ticketing service increased by 13.7 percent YoY in Q4FY24 and by 16.7 percent YoY in FY24, the international air ticketing business registered a growth of 33 percent year-on-year in Q4. For domestic air business, the company maintains a market share of over 30 percent.

Previously, strikes by Vistara and Air India caused numerous flight cancellations. When asked about the impact of these strikes on MakeMyTrip, Magow said, “I’m not necessarily overly worried about mid-term to long-term outlook on domestic air supply expansion. I think that will fall in place,” adding that he was not worried about the short-term impact either.

“During Q4, the total number of departures were similar to Q3, as we mentioned last quarter. We expect the domestic supply situation to gradually start improving from the second half of the upcoming financial year,” said Magow.

Kabra said that the growth in the international air ticketing businesses posted segment growth of over 50 percent compared to the last full fiscal year.

“The mix of international air ticketing business has also grown by about 50 percent during this year to about 1/3 of the air ticketing segment. We believe that the international ticketing business will continue to lead the growth in this segment,” said Kabra.

Company focused on making bundles more accessible: In terms of customer experience, MakeMyTrip introduced an add-on called Flexifly that offers a choice of either zero cancellation or free day change option at a nominal incremental cost. Moreover, it revamped the value-added bundles to support more inclusions such as seats, meals, cabs, priority check-in, et cetera, along with our existing products like zero cancellation and free day change.

“This has helped make these bundles more accessible to our customers. visa guarantee, which ensures a full refund of the flight fare to the customer in case the visa gets rejected by the embassy by some reason,” said Magow.

Hotel and packages business

Hotel products launched on government sites: During the year, MakeMyTrip launched hotel products on the IRCTC website and reported “an encouraging initial response.”

“Through platforms such as IRCTC, Amazon Pay, HDFC Smart Buy and MyPartner platform, we continue to attract new users from smaller cities,” said Kabra.

He went on to say that the company’s directly contracted international hotel count has been increasing in line with the launch of direct flights to new international destinations.

“Apart from offering wider options across existing cities, we have also initiated direct contracting in about eight cities globally,” he said.

The Adjusted Margin for Hotels and Packages increased by 41.3 percent YoY in Q4FY24 to $88.9 million and by 38.4 percent YoY in FY24 to $348.9 million. Magow also said that the holiday packages business continues to scale due to the launch of charter services to Bhutan from Mumbai – a key source market said the Co-Founder.

Use of AI for accommodation: Magow said the company integrated AI within its accommodation business to improve customer experience. “Now we offer condensed reviews, empowering our customers with crisp summaries. This enhancement enables swift property selection and furnishes instant insights into each property’s offerings,” he said.

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