MakeMyTrip (MMYT) Q1 Earnings call transcript Jul 23, 2025
In a recent earnings call, MakeMyTrip, a leading travel company, revealed its strong financial performance for the first quarter of fiscal 2025. The company reported the highest ever quarterly gross bookings, revenue, and adjusted operating profit, marking a significant milestone in its journey. The results reflect a robust growth across all its businesses, despite the late pickup of the season for leisure travel due to general elections in April.
Strong Growth Across All Businesses
MakeMyTrip's strategy of catering to various travel use cases and targeting different demand segments on multiple customer touch points is paying off. The company reported gross booking value for Q1 at over $2.4 billion, with a growth of 22% year-on-year in constant currency terms. The adjusted operating profit was $39.1 million, registering a growth of about 30% year-on-year.
Macroeconomic Factors
The company attributed the strong performance to the robust economic growth in India, which has boosted the disposable income of the upper and lower middle classes, leading to higher spending on discretionary services, including travel and tourism. The increasing number of households headed by the younger generation is also driving a cultural shift towards taking more breaks in a year. The rise of flexible working arrangements has influenced travel behavior, with many people combining work and leisure through extended stays in different locations.
International Outbound Travel
International outbound travel, which had fully recovered in fiscal year '24, witnessed robust growth of 25% year-on-year in the international air segments. This segment now contributes over 37% to the company's air ticketing revenue. The long-term outlook on outbound travel from India is positive, with fast-growing pools of first-time tourists in short-haul and long-haul destinations investing to increase awareness for Indian tourists.
Domestic Air Market
The domestic air market, while experiencing a slight improvement in supply, continues to grow at a muted rate. MakeMyTrip aims to improve the product experience by introducing GenAI assisted chatbot named 'Myra' on its international flight booking funnel. This feature assists users with various flight-related queries and actions, making the booking process more efficient and user-friendly.
Accommodation Business
The accommodation business, which includes hotels, homestays, and packages, recorded over 27% year-on-year growth in the adjusted margin on a constant currency basis. This segment contributed 44% to the overall revenue. MakeMyTrip continues to add more properties across the country, offering properties in over 2,100 plus cities in India.
Innovative Features and Expansion
MakeMyTrip is also investing in innovative features to enhance the user experience. It has introduced the street view feature to provide an accurate view of the external surroundings of the properties, ensuring safety and visual appeal. It is the first platform in India to introduce this capability for both domestic and international properties. Additionally, it has launched 360-degree imagery for virtual tours, initially covering 200 mid and premium properties, with plans to expand over 1,000 hotels. This feature gives users an immersive experience, visualizing hotel rooms and amenities, leading to a higher conversion rate among users who interact with it.
Looking Ahead
MakeMyTrip remains optimistic about its future prospects, with a focus on expanding its international outbound business and improving its domestic air market supply situation. It continues to invest in innovative features and services to enhance the user experience and gain a larger market share. The company's robust financial performance and strategic initiatives position it well for future growth.
In conclusion, MakeMyTrip's strong Q1 performance, coupled with its strategic initiatives and optimistic outlook, underscore its commitment to delivering value to its customers and investors. The company's ability to navigate the challenges of the travel industry and capitalize on growth opportunities is a testament to its resilience and strategic acumen. As it moves forward, MakeMyTrip is poised to continue its growth trajectory and make a significant impact on the travel industry.