MakeMyTrip Q1 net revenue up 36.3%; hotels & packages now generate over half of net revenues

NASDAQ-listed online travel services firm MakeMyTrip (MMT) reported a 36.3 per cent rise in revenues less service costs or net revenues to $35.5 million for the first quarter ended June 30, 2014 over the year-ago period.

Overall revenues rose 22.9 per cent to $94.8 million in the quarter while the gross bookings, which represent the total amount paid by a customer while booking on its platform, rose 36.7 per cent to $432.2 million.

This is the fourth straight quarter that its revenues less service costs (a crucial metric for OTAs) rose. Previously this has been sliding due to lower revenues from air tickets, which is the largest business driver for the company. The air ticketing revenues started moving back up from Q2 last year.

Net revenue from air ticketing business increased 15.6 per cent to $16.5 million. The number of air ticketing transactions too increased 16.1 per cent to 1.1 million after sliding for two preceding quarters.

The firm clocked a marginal increase in net revenue margin (defined as revenue less service cost as a percentage of gross bookings) from 5.7 per cent in the quarter ended June 30, 2013 to 5.8 per cent in the quarter ended June 30, 2014.

Gross bookings of air tickets rose 12.4 per cent to $282 million and remained the biggest segment for the firm, but in terms of net revenues hotels & packages, for the first time has now overtaken air ticketing.

Net revenue from hotel & packages booking, rose 34.6 per cent to $17.8 million. The number of hotel & package booking transaction more than doubled to 376,000 last quarter while gross bookings rose 77.8 per cent to $150 million. The growth in this segment was aided by the acquisition of Easytobook Group in February 2014.

Net revenue margin in hotels & packages declined from 12.9 per cent in the quarter ended June 30, 2013 to 11.9 per cent in the quarter ended June 30, 2014.

The other revenue which include business from trains, bus and cab booking among others increased to $1.1 million in the quarter under review against $0.9 million in the quarter ended June 30, 2013, primarily due to an increase in advertisement income.

Adjusted operating profit was $0.27 million as against adjusted operating loss of $1.99 million in Q1 FY14. The company more than halved its net loss for the quarter to $3.9 million as against $9 million in the year-ago period. The adjusted net profit stood at of $0.19 million as against adjusted net loss of $5.09 million in Q1 FY14.

"The various investments made in the past fiscal year helped us to accelerate growth in the seasonally high travel quarter, particularly in the hotels & packages business. We are therefore reinforcing investments to ensure MakeMyTrip's customers continue to have the best possible experience," Deep Kalra, chairman and group CEO of MakeMyTrip said.

The firm shared during the investors call that its mobile apps have been downloaded over 3.2 million times and more than 29 per cent of monthly unique visitors and 14 per cent of all online transactions are now coming via mobile.

For domestic flights, mobile bookings accounted for roughly 13 per cent of total online transactions last quarter. This proportion moves up for hotel bookings with mobile users contributing 25 per cent of its total online domestic hotel transactions.

Citing fiscal year214-15 outlook, the company said that the financial performance achieved in the fiscal first quarter of 2015, including the growth momentum achieved within the hotels and packages business during the holiday high season quarter, increases its confidence.

"We will be able to deliver on our strategic and financial targets for fiscal 2015. We are therefore narrowing the range of our fiscal year 2015 annual revenue less service cost guidance with a growth of 25-28 per cent, which is in the range of $133 million to $136 million," the company said in a statement. Previously the firm had given net revenue guidance of $132 million to $136 million.