MakeMyTrip : Press Release

MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2023 THIRD QUARTER RESULTS
Financial Highlights for Fiscal 2023 Third Quarter
• Gross Bookings reached $1,738.2 million in 3Q23 versus $1,155.7 million in 3Q22.
• Revenue was $170.5 million in 3Q23 versus $115.0 million in 3Q22.
• Air Ticketing Revenue improved to $38.4 million in 3Q23 versus $27.4 million in 3Q22. Adjusted Margin(2) – Air Ticketing
improved to $70.2 million in 3Q23 versus $52.9 million in 3Q22.
• Hotels and Packages Revenue improved to $103.3 million in 3Q23 versus $67.2 million in 3Q22. Adjusted Margin(2) – Hotels and
Packages improved to $72.0 million in 3Q23 versus $54.1 million in 3Q22.
• Bus Ticketing Revenue improved to $19.5 million in 3Q23 versus $14.7 million in 3Q22. Adjusted Margin(2) – Bus Ticketing
improved to $20.3 million in 3Q23 versus $14.1 million in 3Q22.
• Other Revenue improved to $9.3 million in 3Q23 versus $5.7 million in 3Q22. Adjusted Margin(2) – Others improved to $9.6 million
in 3Q23 versus $5.9 million in 3Q22.
• Results from Operating Activities improved to a profit of $7.5 million in 3Q23 versus a loss of $6.2 million in 3Q22, reflecting an
improvement of $13.7 million YoY.
• Adjusted Operating Profit(2) improved to $19.7 million in 3Q23 versus $13.2 million in 3Q22, reflecting an improvement of $6.5
million YoY.
Gurugram, India and New York, January 31, 2023 — MakeMyTrip Limited (NASDAQ: MMYT), India’s leading travel service
provider, today announced its unaudited interim financial and operating results for its fiscal third quarter ended December 31, 2022.
“Positive consumer sentiment and peak seasonality on the back of festivals and holidays led to improved travel demand during this quarter.
As a result, we recorded our highest ever quarterly Gross Bookings and Adjusted Operating Profit. Strong growth across air, hotels and bus
bookings reaffirms our position as a trusted travel super-app in India,” said Rajesh Magow, Group Chief Executive Officer.
Other information
Impact of the COVID-19 Pandemic
The impact of the global COVID-19 pandemic has severely impacted travel demand in terms of affecting consumers’ sentiment and their
willingness to travel, which has caused airlines and hotels in India and around the world to operate at significantly reduced service levels
throughout much of fiscal years 2021 and 2022. The COVID-19 pandemic has also resulted in significant weakness in the macroeconomic
environment and heightened volatility in financial markets. In India, we witnessed a rapid resurgence of daily recorded case counts towards
the end of the fourth quarter of fiscal year 2021 which peaked in the first quarter of fiscal year 2022, resulting in a second wave of the
COVID-19 pandemic in India. The resulting economic conditions caused by the lockdowns and travel restriction orders imposed by several
state governments in India from April 2021, which continued for part of fiscal year 2022, also had a negative impact on revenue for all our
reportable segments in the quarter ended December 31, 2021, as compared to revenue for the quarter ended December 31, 2019 (prior to
the onset of the COVID-19 pandemic).
During the first nine months of fiscal year 2023, we experienced an increase in travel demand, with Gross Bookings having fully recovered
to pre-COVID-19 levels. We believe that the continued recovery in travel demand in the third quarter of fiscal year 2023 was attributable
to increased demand for travel driven by the holiday season, festivals and business travel, together with increased COVID-19 vaccination
rates and comparatively lower COVID-19 infection rates, in the quarter ended December 31, 2022. This led to improved results across our
operating segments in the third quarter of fiscal year 2023 as compared to the third quarter of fiscal year 2022. We continued to focus on
optimizing our costs by leveraging our highly variable and more efficient fixed cost structure during the quarter ended December 31, 2022.
The extent and duration of the effects of the COVID-19 pandemic over the longer term on our business, results of operations, cash flows
and growth prospects remain uncertain and would be dependent on future developments that cannot be accurately predicted at this time.
These include, but are not limited to, the severity, extent and duration of the COVID-19 pandemic, its impact on the travel industry and
consumer spending, rates of vaccination, the occurrence of new mutations or variants and the effectiveness of vaccinations against various
mutations or variants of the COVID-19 virus. In addition, increasing rates of COVID-19 infections in certain parts of the world could impact
international travel demand. While many countries including India have made significant progress in vaccinating their populations against
the COVID-19 virus, efficacy of the vaccines against new mutations or variants of the virus and other factors may contribute to delays in
complete economic recovery.
Fiscal 2023 Third Quarter Financial Results
Revenue. We generated revenue of $170.5 million in the quarter ended December 31, 2022, an increase of 48.3% (61.7% in constant
currency(1)) over revenue of $115.0 million in the quarter ended December 31, 2021, primarily as a result of an increase of 40.2% (53.4%
in constant currency) in revenue from our air ticketing business, an increase of 53.6% (67.2% in constant currency) in revenue from our
hotels and packages business, an increase of 33.2% (45.6% in constant currency) in revenue from our bus ticketing business, and an increase
of 62.8% (77.8% in constant currency) in revenue from our others business, each as further described below. The increase in revenue was
primarily due to the strong recovery in domestic travel demand as a result of the diminishing impact of the COVID-19 pandemic in India
in the quarter ended December 31, 2022 as compared to the quarter ended December 31, 2021.
The table below summarizes our segment profitability in terms of revenue and Adjusted Margin in each segment. Customer inducement
costs have been added back to revenue to calculate Adjusted Margin and are intended to reflect the way we view our ongoing business.
Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. For more information, see “Information
About Reportable Segments” in our condensed consolidated interim financial statements included elsewhere in this release. Also see “About
Key Performance Indicators and Non-IFRS Measures” elsewhere in this release.
For the three months ended December 31 Air ticketing Hotels and packages Bus ticketing Others
2021 2022 2021 2022 2021 2022 2021 2022 (Amounts in USD thousands)
Revenue as per IFRS 27,369 38,360 67,248 103,290 14,673 19,542 5,733 9,334 Add: Customer inducement costs recorded
as a reduction of revenue 25,606 32,815 15,806 25,204 734 2,206 252 508 Less: Service cost 34 996 28,990 56,505 1,301 1,407 115 216 Adjusted Margin(2) 52,941 70,179 54,064 71,989 14,106 20,341 5,870 9,626
Air Ticketing. Revenue from our air ticketing business increased by 40.2% (53.4% in constant currency) to $38.4 million in the quarter
ended December 31, 2022, from $27.4 million in the quarter ended December 31, 2021. Our Adjusted Margin – Air ticketing increased by
32.6% (45.2% in constant currency) to $70.2 million in the quarter ended December 31, 2022, from $52.9 million in the quarter ended
December 31, 2021. Adjusted Margin – Air ticketing includes customer inducement costs of $32.8 million in the quarter ended December
31, 2022 and $25.6 million in the quarter ended December 31, 2021, recorded as a reduction of revenue. The increase in revenue from our
air ticketing business and Adjusted Margin – Air ticketing was primarily due to an increase in gross bookings of 56.8% (71.6% in constant
currency) primarily driven by a 29.2% increase in the number of air ticketing flight segments year over year (excluding flight segments
booked as a component of bookings for our Hotels and Packages segment), primarily due to the strong recovery in domestic travel demand
as a result of the diminishing impact of the COVID-19 pandemic in India in the quarter ended December 31, 2022 as compared to the
quarter ended December 31, 2021. Further, our Adjusted Margin % (defined as Adjusted Margin as a percentage of gross bookings) – Air
ticketing decreased to 6.6% in the quarter ended December 31, 2022 as compared to 7.8% in the quarter ended December 31, 2021, primarily
due to increased air fares during the quarter ended December 31, 2022, without a corresponding increase in revenue earned in relation to
such bookings which is largely fixed.
Hotels and Packages. Revenue from our hotels and packages business increased by 53.6% (67.2% in constant currency) to $103.3 million
in the quarter ended December 31, 2022, from $67.2 million in the quarter ended December 31, 2021. Our Adjusted Margin – Hotels and
packages increased by 33.2% (45.3% in constant currency) to $72.0 million in the quarter ended December 31, 2022 from $54.1 million in
the quarter ended December 31, 2021. Adjusted Margin – Hotels and packages includes customer inducement costs of $25.2 million in the
quarter ended December 31, 2022 and $15.8 million in the quarter ended December 31, 2021, recorded as a reduction of revenue. The
increase in revenue from our hotels and packages business and Adjusted Margin – Hotels and packages was primarily due to an increase in
gross bookings by 42.6% (55.4% in constant currency) primarily driven by a 27.3% increase in the number of hotel-room nights year over
year, primarily due to the strong recovery in domestic travel demand as a result of the diminishing impact of the COVID-19 pandemic in
India in the quarter ended December 31, 2022 as compared to the quarter ended December 31, 2021. Our Adjusted Margin % – Hotels and
packages decreased to 16.2% in the quarter ended December 31, 2022 as compared to 17.3% in the quarter ended December 31, 2021,
primarily due to an increase in the proportion of bookings of packages during the holiday season in the quarter ended December 31, 2022,
that have relatively lower margins.
Bus Ticketing. Revenue from our bus ticketing business increased by 33.2% (45.6% in constant currency) to $19.5 million in the quarter
ended December 31, 2022, from $14.7 million in the quarter ended December 31, 2021. Our Adjusted Margin – Bus ticketing increased by
44.2% (57.6% in constant currency) to $20.3 million in the quarter ended December 31, 2022 from $14.1 million in the quarter ended
December 31, 2021. Adjusted Margin – Bus ticketing includes customer inducement costs of $2.2 million in the quarter ended December
31, 2022 and $0.7 million in the quarter ended December 31, 2021, recorded as a reduction of revenue. The increase in revenue from our
bus ticketing business and Adjusted Margin – Bus ticketing was due to an increase in gross bookings by 38.8% (51.9% in constant currency)
driven by a 33.9% increase in the number of bus tickets travelled year over year, primarily due to the strong recovery in domestic travel
demand as a result of the diminishing impact of the COVID-19 pandemic in India in the quarter ended December 31, 2022 as compared to
the quarter ended December 31, 2021. Our Adjusted Margin % – Bus ticketing increased marginally to 9.0% in the quarter ended December
31, 2022 as compared to 8.6% in the quarter ended December 31, 2021.
Others. Revenue from our others business increased by 62.8% (77.8% in constant currency) to $9.3 million in the quarter ended December
31, 2022, from $5.7 million in the quarter ended December 31, 2021. Our Adjusted Margin – Others increased by 64.0% (79.1% in constant
currency) to $9.6 million in the quarter ended December 31, 2022 from $5.9 million in the quarter ended December 31, 2021. Adjusted
Margin – Others includes customer inducement costs of $0.5 million in the quarter ended December 31, 2022 and $0.3 million in the quarter
ended December 31, 2021, recorded as a reduction of revenue. The increase in revenue from our others business and Adjusted Margin –
Others was on account of an increase in sales of other ancillary services primarily due to the strong recovery in domestic travel demand as
a result of the diminishing impact of the COVID-19 pandemic in India in the quarter ended December 31, 2022 as compared to the quarter
ended December 31, 2021.
Other Income. Other income decreased by 93.9% to $0.2 million in the quarter ended December 31, 2022 from $2.6 million in the quarter
ended December 31, 2021, primarily due to gain on discontinuation of equity-accounted investment of $2.3 million recorded in the quarter
ended December 31, 2021.
Personnel Expenses. Personnel expenses increased by 8.0% to $32.8 million in the quarter ended December 31, 2022 from $30.4 million
in the quarter ended December 31, 2021, primarily due to annual wage increases effected in the quarter ended June 30, 2022.
Marketing and Sales Promotion Expenses. Marketing and sales promotion expenses increased by 29.9% to $28.9 million in the quarter
ended December 31, 2022 from $22.2 million in the quarter ended December 31, 2021, primarily due to an increase in variable costs and
discretionary marketing and sales promotion expenditures such as expenses on events and brand building initiatives in response to the strong
recovery in domestic travel demand as a result of the diminishing impact of the COVID-19 pandemic in India in the quarter ended December
31, 2022 as compared to the quarter ended December 31, 2021. Marketing and sales promotion expenses as a percentage of revenue
decreased to 16.9% in the quarter ended December 31, 2022 from 19.3% in the quarter ended December 31, 2021, reflecting better efficiency
in our marketing and sales promotion spends.
Additionally, we incurred customer inducement costs recorded as a reduction of revenue of $60.7 million in the quarter ended December
31, 2022 and $42.4 million in the quarter ended December 31, 2021. The details are as follows:
For the three months ended December 31
2021 2022 (Amounts in USD thousands)
Marketing and sales promotion expenses 22,231 28,868 Customer inducement costs recorded as a reduction of revenue 42,398 60,733
Other Operating Expenses. Other operating expenses increased by 8.0% to $35.6 million in the quarter ended December 31, 2022 from
$33.0 million in the quarter ended December 31, 2021, primarily due to $11.0 million increase in operating expenses such as payment
gateway charges, outsourcing fees and website hosting charges linked to increase in bookings, partially offset by decrease in provision for
litigations of $8.4 million in the recorded in the quarter ended December 31, 2021 for a dispute related to a prior acquisition.
Depreciation, Amortization and Impairment. Our depreciation, amortization and impairment expenses decreased by 12.4% to $6.8 million
in the quarter ended December 31, 2022 from $7.8 million in the quarter ended December 31, 2021, primarily due to an increase in fully
depreciated and amortized assets in the quarter ended December 31, 2022.
Results from Operating Activities. As a result of the foregoing factors, our results from operating activities were a profit of $7.5 million in
the quarter ended December 31, 2022 as compared to a loss of $6.2 million in the quarter ended December 31, 2021. Our Adjusted Operating
Profit was $19.7 million in the quarter ended December 31, 2022 as compared to $13.2 million in the quarter ended December 31, 2021.
For a description of the components and calculation of “Adjusted Operating Profit (Loss)” and a reconciliation of this non-IFRS measure
to the most directly comparable IFRS measure “Results from operating activities”, see — “About Key Performance Indicators and Non- IFRS Measures” elsewhere in this release.
Net Finance Costs. Our net finance cost was $7.7 million in the quarter ended December 31, 2022 as compared to net finance cost of $3.4
million in the quarter ended December 31, 2021. The increase in our net finance cost was primarily due to an increase in net foreign exchange
loss of $5.5 million in the quarter ended December 31, 2022, primarily due to unrealized foreign exchange losses resulting from translations
of monetary assets and liabilities from Indian Rupees to U.S. dollars as at December 31, 2022 and taking into account the depreciation of
the Indian Rupee against the U.S. dollar from September 30, 2022 to December 31, 2022.
Profit (Loss) for the Period. As a result of the foregoing factors, our profit for the quarter ended December 31, 2022 was $0.2 million as
compared to a loss of $9.0 million in the quarter ended December 31, 2021. Our Adjusted Net Profit was $15.9 million in the quarter ended
December 31, 2022, as compared to Adjusted Net Profit of $13.5 million in the quarter ended December 31, 2021. For a description of the
components and calculation of “Adjusted Net Profit (Loss)” and a reconciliation of this non-IFRS measure to the most directly comparable
IFRS measure “Profit (loss) for the period”, see — “About Key Performance Indicators and Non-IFRS Measures” elsewhere in this release.
Diluted Earnings (Loss) per Share. Diluted earnings per share was $0.001 for the quarter ended December 31, 2022 as compared to diluted
loss per share of $0.08 in the quarter ended December 31, 2021. Our Adjusted Diluted Earnings per share was $0.14 in the quarter ended
December 31, 2022, as compared to $0.12 in the quarter ended December 31, 2021. For a description of the components and calculation of
“Adjusted Diluted Earnings (Loss) per Share” and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure
“Diluted earnings (loss) per share”, see — “About Key Performance Indicators and Non-IFRS Measures” elsewhere in this release.
Liquidity. As at December 31, 2022, the balance of cash and cash equivalents and term deposits on our balance sheet was $449.2 million.
In addition, we have existing credit facilities of approximately $121.3 million, which includes a $70.0 million facility from an affiliate of
our largest shareholder with the remaining amount from various commercial banks. As at December 31, 2022, $0.1 million has been drawn
against these facilities.
Notes:
(1) Constant currency refers to our financial results assuming constant foreign exchange rates for the current fiscal period based on the
rates in effect during the comparable period in the prior fiscal year.
(2) This is a non-IFRS measure. For more information, see “About Key Performance Indicators and Non-IFRS Measures” elsewhere in
this release. IFRS refers to International Financial Reporting Standards as issued by the International Accounting Standards Board
(IASB). In addition, reconciliations of IFRS measures to non-IFRS financial measures and operating results are included at the end of
this release.
Recent Developments
On November 23, 2022, our wholly-owned Indian subsidiaries, being MakeMyTrip (India) Private Limited, or MMT India, and ibibo Group
Private Limited, or Ibibo India, filed an appeal before the National Company Law Appellate Tribunal (“NCLAT”) against the order issued
by the Competition Commission of India (“CCI”) on October 19, 2022 in relation to alleged anti-competitive conduct by MMT India and
Ibibo India under the Competition Act, 2002 of India. The final hearing in respect of such appeal has been scheduled for April 11, 2023. A
deposit of Rs. 223.5 million (or $2.7 million), being 10% of the aggregate penalty imposed on MMT India and Ibibo India by the CCI has
been made with the NCLAT pursuant to orders of the NCLAT and the High Court of Delhi. As a result, enforcement of the penalty amount
has been stayed pending the outcome of the appeal.
Share Repurchase
On November 6, 2012, our Board of Directors authorized the Company to purchase outstanding ordinary shares, par value $0.0005 per
share, of the Company. On January 22, 2016, our Board of Directors authorized the Company to increase the share repurchase plan to an
amount aggregating up to $150 million at a price per ordinary share not exceeding $21.50 until November 30, 2021. On October 26, 2021,
our Board of Directors authorized the Company to further extend the term of this share repurchase plan until November 30, 2023. There
were no repurchases pursuant to the share repurchase plan during the third quarter of fiscal year 2023. As at December 31, 2022, we had
remaining authority to repurchase up to approximately $136.0 million of our outstanding ordinary shares.
Conference Call
MakeMyTrip will host a live Zoom webinar to discuss the Company’s results for the quarter ended December 31, 2022 beginning at 7:30
AM EDT or 6:00 PM IST on January 31, 2023 through the Company’s Investor Relations website at https://investors.makemytrip.com/. To
participate, please use the following the link https://makemytrip.zoom.us/webinar/register/WN_kbI4yENmRpuB3PUdApvFMA to register
for the live event. Registered participants will receive a confirmation email containing the Zoom access link and alternative phone dial-in
details. A replay of the event will be available on the “Investor Relations” section of the Company’s website at
http://investors.makemytrip.com, approximately two hours after the conclusion of the live event.
About Key Performance Indicators and Non-IFRS Measures
We refer to certain non-IFRS measures in various places within this release, including “Adjusted Operating Profit (Loss)”, “Adjusted Net
Profit (Loss)” and “Adjusted Diluted Earnings (Loss) per Share”. Our key performance indicators are “Adjusted Margin” and “Adjusted
Margin %” which are also non-IFRS measures.
We evaluate our financial performance in each of our reportable segments based on our key performance indicator, Adjusted Margin, a
segment profitability measure, which represents IFRS revenue after adding back customer inducement costs in the nature of customer
incentives, customer acquisition costs and loyalty program costs which are reported as a reduction of revenue, and deducting the cost of
acquisition of services primarily relating to sales to customers where the Company acts as the principal.
As certain parts of our revenues are recognized on a “net” basis when we are acting as an agent, and other parts of our revenue are recognized
on a “gross” basis when we are acting as the principal, we evaluate our financial performance in each of our reportable segments based on
Adjusted Margin, which is a non-IFRS measure and a segment profitability measure, as we believe that Adjusted Margin reflects the value
addition of the travel services that we provide to our customers. Income from packages, including income on airline tickets sold to customers
as a part of tours and packages is accounted for on a gross basis as the Company controls the services before such services are transferred
to travelers. Revenue from the packages business which is accounted for on a “gross” basis represents the total amount paid by customers
for these travel services and products, while our cost of procuring the relevant services and products for sale to our customers in this business
is classified as service cost.
Constant currency results are financial measures that are not prepared in accordance with IFRS, and assume constant currency exchange
rates used for translation based on the rates in effect during the comparable period in the prior fiscal year.
We also refer to Adjusted Operating Profit (Loss), Adjusted Net Profit (Loss) and Adjusted Diluted Earnings (Loss) per Share which are
non-IFRS measures and most directly comparable to results from operating activities, profit (loss) for the period and diluted earnings (loss)
per share, respectively, each of which is an IFRS measure. We use financial measures that exclude share-based compensation expense,
merger and acquisition related expenses, amortization of acquired intangibles, provision for litigations, gain on discontinuation of equity- accounted investment, net change in financial liability relating to acquisitions, share of loss (profit) of equity-accounted investees, interest
expense on financial liabilities measured at amortized cost and income tax benefit for our internal management reporting, budgeting and
decision making purposes, including comparing our operating results to that of our competitors. Because of varying available valuation
methodologies and subjective assumptions that companies can use when adopting IFRS 2 “Share based payment,” management believes
that providing non-IFRS measures that exclude share-based compensation expense allows investors to make additional comparisons
between our operating results and those of other companies. In addition, reconciliations of IFRS measures to non-IFRS financial measures
and operating results are included at the end of this release.
We believe that our current calculations of Adjusted Operating Profit (Loss), Adjusted Net Profit (Loss), Adjusted Diluted Earnings (Loss)
per Share, Adjusted Margin and Adjusted Margin % and change in constant currency represent a balanced approach to adjust for the impact
of certain discrete, unusual or non-cash items and other items such as customer inducement costs in the nature of customer incentives,
customer acquisition costs and loyalty program costs, which we believe are useful in measuring our results and provide useful information
to investors and analysts.
We believe that investors and analysts use these non-IFRS measures and key performance indicators to compare our Company and our
performance to that of our global peers.
A limitation of using Adjusted Operating Profit (Loss), Adjusted Net Profit (Loss) and Adjusted Diluted Earnings (Loss) per Share instead
of results from operating activities, profit (loss) for the period and diluted earnings (loss) per share calculated in accordance with IFRS as
issued by the IASB is that these non-GAAP financial measures exclude a recurring cost, namely share-based compensation. Management
compensates for this limitation by providing specific information on the IFRS amounts excluded from Adjusted Operating Profit (Loss),
Adjusted Net Profit (Loss) and Adjusted Diluted Earnings (Loss) per Share.
The presentation of these non-IFRS measures and key performance indicators are not meant to be considered in isolation or as a substitute
for our consolidated financial results prepared in accordance with IFRS as issued by the IASB. These non-IFRS measures and key
performance indicators may not be comparable to similarly titled measures reported by other companies due to potential differences in the
method of calculation.
Safe Harbor Statement