MakeMyTrip Limited (MMYT) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance with record high adjusted operating profit and significant revenue growth. The Q&A section reveals confidence in achieving growth targets and improving consumer sentiment. Management's optimistic outlook on international growth and ancillary services, along with a focus on AI initiatives, suggests positive future prospects. While there are minor concerns, such as unclear buyback policy and temporary air supply issues, the overall sentiment remains positive, likely leading to a stock price increase in the short term.
Key Financial Performance
Adjusted Operating Profit $47.3 million, witnessing a growth of 21% year-on-year. The growth was attributed to leveraging diversified business mix, pushing international offerings, and driving operating leverage.
International Air Ticketing Revenue Grew by over 27% year-on-year, far outpacing industry growth. This was driven by increasing market share and growing online booking behavior.
International Hotels Revenue Grew by over 45% year-on-year. The growth was supported by expanding international hotel supply and direct contracting strategy.
Revenue (as per IFRS) $268.8 million, grew by 7.8% year-on-year in constant currency. Growth was impacted by external events such as macro challenges.
Profit for the Quarter $25.8 million, registering 22.6% year-on-year growth. This was due to disciplined financial management and operational agility.
Air Ticketing Adjusted Margin $97 million, registering a growth of 11.5% year-on-year in constant currency. Take rates were in line at 6.8%.
Hotels and Packages Adjusted Margin $121.9 million, registering a growth of 16.3% year-on-year in constant currency. Growth was lower than expected due to flat holiday packages business.
Bus Ticketing Adjusted Margin $42.6 million, registering a strong year-on-year growth of over 34.1% in constant currency. Take rates were in line at 10.3%.
Ground Transport Gross Bookings $71.8 million, witnessing a growth of 31.6% year-on-year in constant currency. Growth was driven by rail intercity cabs and other ground transport services.
Ancillary Services Adjusted Margin $21.5 million, witnessing a strong growth of 47.4% year-on-year in constant currency. Growth was driven by travel insurance, forex, and other ancillary services.
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Operating Highlights
Zero cancellation product for domestic flights: A new version was launched to boost user confidence and repeat usage for frequent domestic flyers.
Airport transfer booking process: Streamlined for domestic flights, allowing travelers to reserve a cab of their choice while booking flights.
International lounge offerings: Expanded to include departures from 131 international airports, enhancing preflight experience.
Dining-related content: Scaled food-related data coverage to over 21,000 properties across India, showcasing dining options and preferences.
Wildlife tourism content: Enriched content for over 2,000 properties near wildlife hotspots, driving higher engagement and conversion.
International holiday packages: Launched new packages for destinations like Jordan and Tashkent.
Homestay supply: Expanded in pilgrimage cities and business cities, with notable growth in new rooms.
Flight track cabs: Launched to ensure seamless airport-to-city rides using real-time flight data.
International air ticketing revenue: Grew by over 27% year-on-year, outpacing industry growth.
International hotels revenue: Grew by over 45% year-on-year, with international business now contributing 27% to overall revenue.
International hotel supply: Added over 2,000 directly contracted hotels across 50 cities in 20 countries.
Bus business in Malaysia: Continued growth with adjacent products like ferries and activities being added.
Adjusted operating profit: Reached $47.3 million, a 21% year-on-year growth.
Corporate travel platforms: Active corporate customer count grew significantly on both myBiz and Quest2Travel platforms.
Ground transport business: Gross bookings grew by 31.6% year-on-year, driven by rail and intercity cabs.
Customer acquisition cost: Maintained efficiency at 5.1% of gross booking value.
Repurchase of Class B shares: Completed repurchase and cancellation of 34.3 million Class B shares, reducing total shares outstanding.
Trip.com stake: Trip.com became the largest minority shareholder with 16.9% voting shares.
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Risk or Challenges
Domestic demand impact: Domestic demand for leisure travel was weak due to the incident in Pahalgam and a passenger airplane crash, leading to reduced bookings for domestic air travel and holiday packages.
Macroeconomic disruptions: The quarter faced macroeconomic headwinds, including geographical escalations and tragic events, which impacted overall demand.
Domestic leisure travel challenges: Domestic leisure travel faced headwinds, particularly in key destinations like Jammu & Kashmir, which saw a dip in tourist inflow due to the Pahalgam incident.
Seasonality and demand fluctuations: Demand tapered in May and June after a strong start in April, affecting overall growth.
Operational disruptions: Operational disruptions in the domestic market impacted air ticketing and holiday package demand.
Dependence on external factors: The business is vulnerable to uncontrollable external events such as geopolitical issues, natural disasters, and accidents.
Marketing and sales efficiency: Marketing and sales promotion expenses were adjusted due to tepid demand in May and June, indicating sensitivity to demand fluctuations.
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Guidance & Outlook
Long-term growth prospects of the Indian travel sector: The company remains optimistic about the long-term growth prospects of the Indian travel sector, driven by rising disposable income, infrastructure upgrades, and a shift in consumer behavior towards increased spending on travel.
International outbound travel: International outbound travel from India is expected to grow significantly, with short-haul markets gaining traction due to better air connectivity, simplified visa processes, and rising preferences for quick getaways.
International air ticketing revenue: International air ticketing revenue grew by over 27% year-on-year in Q1 fiscal year '26, outpacing industry growth. The company expects continued growth in this segment.
International hotels revenue: International hotels revenue grew by over 45% year-on-year in Q1 fiscal year '26. The company anticipates further growth in this area.
Expansion of international hotel supply: The company is expanding its international hotel supply through direct contracting in high-demand outbound destinations, adding over 2,000 directly contracted hotels across 50 cities in 20 countries.
Emerging trends in travel: Indian consumers are increasingly prioritizing experiential travel activities, taking multiple holidays and short breaks throughout the year. Wildlife tourism and nature-based experiences are also gaining popularity.
Bus business growth: The bus business is expected to continue its growth trend, with private inventory additions and investments in new buses likely to persist in the coming quarters.
Corporate travel business: The corporate travel business is witnessing strong growth, with an increase in active corporate customer counts on both myBiz and Quest2Travel platforms.
Inorganic investment opportunities: The company plans to explore inorganic investment opportunities during the year, supported by its strong cash position of $804 million.
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Shareholder Return Plan
Share Repurchase: During the quarter, MakeMyTrip raised additional capital of approximately $3.1 billion through a primary offering of ordinary shares and 0 coupon convertible serial notes. The entire net proceeds from the offerings were used for repurchase of Class B shares. After the completion of the reported quarter on 2nd July 2025, the company completed the repurchase and cancellation of 34.3 million Class B shares. As a result of the repurchase, the total shares outstanding reduced to 95.4 million compared to 111.3 million shares outstanding as of 31st March 2025. Trip.com is now the largest minority shareholder, with approximately 16.9% voting shares in the company.
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Key Q&A
Q:Given the fact that 1Q is at a 16% growth on revenue, how should we think about the upcoming quarters in the sense that for the full year, are we still aiming at a 20% growth?
A:Management stated that the adjusted margin growth overall stands at close to about 18.8%, which is close to the 20% target. Despite macro events, they are confident of achieving high teens to 20% growth for the year.
Q:Are you seeing an improvement in consumer sentiment as we head out of 1Q?
A:Management noted that consumer sentiment is improving, with daily flown numbers recovering in June. Booking trends for leisure destinations are gradually coming back, and consumer sentiment surveys show a recovery trend week on week.
Q:What are your thoughts on the air supply issue?
A:Management explained that the air supply issue was temporary, caused by safety checks on planes. They have started seeing planes and daily departures coming back to track, and they do not foresee further deterioration.
Q:Is there any update on a potential IPO in India?
A:Management reiterated that listing in India remains a midterm opportunity linked to fundraise plans. Currently, they have $800 million in cash and do not see an immediate need for a large fund deployment.
Q:Do you think the runway of 30%+ growth on a blended basis for the international segment is sustainable?
A:Management believes the growth is sustainable due to underpenetrated online markets, efforts in adding supply, and macro factors like rising disposable income and improved air connectivity. International travel growth is expected to continue.
Q:Was the trend in international bookings similar to the overall segments where April was strong and May and June worsened?
A:Management stated that international bookings were less impacted in May and June compared to domestic, allowing for better growth in the international segment.
Q:Can you highlight the general competition landscape, particularly from airline direct?
A:Management noted no significant changes in competition dynamics. They focus on maintaining a meaningful share of suppliers and providing efficient distribution.
Q:Is there a formal buyback policy, and how are you thinking about buybacks?
A:Management stated that they currently follow an opportunistic buyback program and are open to deploying further buybacks during the year. They may consider a steady program in the future.
Q:Was there any kind of down trading in room rates for hotels during the quarter?
A:Management observed no significant drop in average room rates, with only a small 1-2% decline in certain segments.
Q:What proportion of hotel activity is MICE related, and was it a growth tailwind this quarter?
A:Management noted that corporate travel, including MICE, grew well and contributed to growth during the quarter.
Q:What is the growth potential for ancillary services, and can the 30% growth pace sustain?
A:Management is confident that ancillary services can sustain a 30% growth pace due to new initiatives and increased supply on the platform.
Q:Were there any changes in Board composition following Trip.com's shareholding reduction?
A:Management stated that Trip.com's nominees on the Board reduced by three, and two independents were added. They also constituted a Nomination Committee and increased the size of the Audit Committee.
Q:How should one look at your margin guidance given the growth headwinds?
A:Management aims to maintain a 1.8% to 2% range of adjusted operating margin as a percentage of gross bookings on a full-year basis, with tactical adjustments based on market conditions.
Q:Why did air ticketing customer inducements increase during the quarter?
A:Management explained that the increase was linked to distribution costs and improved blended adjusted margins, making it a good expense to incur.
Q:Why did gross bookings for hotels not align with the growth in room nights booked?
A:Management attributed this to a decline in holiday package bookings, which have higher average selling prices, impacting gross bookings.
Q:How do you see AI-led search and bookings for travel as an opportunity or threat?
A:Management views AI as an opportunity to enhance consumer experience and productivity. They are investing in Gen AI to leverage their data and innovate for better consumer insights and operational efficiency.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the question about a formal buyback policy, stating that they follow an opportunistic approach without specifying clear criteria or thresholds for buybacks.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aditya
Director
Garg Senior
Inc Research
India travel
Mumbai
President Investor
RTC
Rajesh
Research Division
Senior Vice
Vice President
Vipul Garg
addition
availability
cab
country market
demand momentum
dining
factor
family group
graph
increase inventory
insight
inventory schedule
lounge
preference
property
prospect travel
reliability
sector term
shift
term prospect
traction
travel sector
wildlife
MMYT Transcript
MakeMyTrip Limited (MMYT) Q4 2026 Earnings Call Transcript
Positive5-19
The earnings call highlights strong financial performance with a 20% revenue increase, 50% net profit growth, and improved operating margins. These positive financial metrics, combined with robust travel demand and efficient cost management, suggest a favorable market reaction. The absence of strategic, risk, and return updates in the call does not detract from the strong financial results, leading to a positive sentiment prediction for the stock price.
MakeMyTrip Limited (MMYT) Q3 2026 Earnings Call Transcript
Positive1-21
The earnings call highlights strong growth in international and domestic travel, boosted by macroeconomic measures and strategic product developments like Myra. Despite some challenges like GST impacts, the overall sentiment is positive with growth in key segments such as air ticketing and hotels. The Q&A session provided clarity on risks, with stable margins and no significant financial downturns. Overall, the strategic initiatives and market opportunities suggest a positive outlook for stock movement.
MakeMyTrip Limited (MMYT) Q2 2026 Earnings Call Transcript
Positive10-28
The earnings call highlights strong growth in international air ticketing and hotel revenue, positive cash flow, and a robust cash position. Despite increased marketing expenses, margins are stable, and the company is optimistic about GST benefits boosting demand. Although no stock repurchase occurred, the extended buyback program is positive. Guidance for 20% growth in adjusted margins and expansion in ancillary services are promising. While there are concerns about negative net income due to finance costs and vague management responses, the overall sentiment is positive, supported by optimistic market growth prospects and strategic initiatives.
MakeMyTrip Limited (MMYT) Q1 2026 Earnings Call Transcript
Positive7-22
The earnings call summary indicates strong financial performance with record high adjusted operating profit and significant revenue growth. The Q&A section reveals confidence in achieving growth targets and improving consumer sentiment. Management's optimistic outlook on international growth and ancillary services, along with a focus on AI initiatives, suggests positive future prospects. While there are minor concerns, such as unclear buyback policy and temporary air supply issues, the overall sentiment remains positive, likely leading to a stock price increase in the short term.
MMYT Report
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