MakeMyTrip

Losses continue to widen for MakeMyTrip for the quarter ended December 31, 2015 from the preceding quarter. Losses stood at $19.47 million compared to $12.22 million in the preceding quarter. The company had posted a loss of $3.66 million in the same quarter last year. This is MakeMyTrip’s thirteenth straight loss making quarter.

However, the net revenues (revenues less service costs), increased 3.5% to $36.29 million from $35.08 million from the same period last year. On a sequential basis, net revenues increased 9.3% from $33.2 million. Gross bookings in the entire company grew 15.6% y-o-y to $455.2 million.

Air Ticketing: Revenues from Air ticketing business decreased 6.3% to $16.99 million for the quarter, from $18.13 million in the same quarter last year. Transactions for air ticketing grew by 34.58% y-o-y to 1.77 million in the quarter. Gross bookings increased 3.19% y-o-y to $311.43 million. MakeMyTrip attributed the lower revenues to the lower revenue margin of 5.5% compared to 6% in the same period last year.

Air ticketing accounted for 46.81% of MakeMyTrip’s net revenues.

Hotel and Packaging: Revenues from the hotels and packages business grew by 7.30% to $17.70 million for the quarter, from $12.78 million in the same quarter last year. Number of transactions grew by 148.2% to 0.85 million for the quarter, from 0.34 million transactions in the same quarter last year.

Gross bookings increased 22.55% to $143.81 million for the quarter, from $117.35 million in the same quarter last year.

Hotels and Packaging business contributed for 48.76 % of MakeMyTrip’s net revenues for the quarter.

This is the second time that the Hotels business’ revenues exceeded the Air ticketing revenues and has been driving MakeMyTrip’s revenue growth for a few quarters now. Hotels business surpassed Air ticketing revenues for the company in Q2-FY15 for the first time.

MakeMyTrip also segmented out the the number of hotel bookings in India this quarter. India hotel bookings stood at 0.68 million growing 326.3% from 0.159 million in the same period last year.

The company also segmented the number of hotel bookings on mobile. Standalone Hotels booked on mobile stood at 0.41 million, growing from 0.0479 million in the same quarter last year.

Other Revenue: Other revenue at the company increased 36.43% to $1.60 million in the quarter ended December 31, 2015 from $1.18 million in the quarter ended December 31, 2014, primarily due to an increase in facilitation fees on travel insurance.

Other developments

– The Directorate General of Central Excise Intelligence (DGCEI) in India recently initiated an investigation against the Indian subsidiary (MMT India) regarding service tax liability on hotel bookings facilitated by MMT India. While MMT India has paid service tax on such bookings as a tour agent, the DGCEI has raised a demand of approximately $10 million from MMT India treating it as a hotel service provider for the fiscal years 2010 to 2015. MMT India has deposited approximately $4 million under protest against this demand.

– MakeMyTrip raised $180 million in convertible bonds from China’s Ctrip. Ctrip also bought MakeMyTrip’s shares from the open market. After converting the bonds to shares and purchase in the open market, Ctrip would effectively own 26.6% of MakeMyTrip’s stock.

– In November 2015, MakeMyTrip launched Value+, a brand of budget hotel rooms, on its website. Value+ will offer rooms starting at Rs 1,000 per night, and was thought out because MakeMyTrip’s customers complained about the quality of services provided by budget hotel aggregators (like Oyo Rooms and Zo Rooms).