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MakeMyTrip Reports $1.77M Profit; Buys Singapore Travel Agent For Over $3M

MakeMyTrip has reported gross booking of $216 million for the quarter ending December 31th 2010, up 70.7% year over year. The October-December quarter is typically the best quarter of the year for ticketing sites, given the festive season: Air Ticket transactions grew 59.1% year on year, leading to a 64.5% growth in gross bookings, while Hotels & Packages transactions increased by 52.2% year on year, leading to a 27.9% growth in gross revenue from the segment. For the period, MMYT reported a profit for the period of $1.771 million, compared with profit of $0.763 million for the same period last year, on a Net Revenue (total revenue less service cost) growth of 59.2% to $17.3 million, up from $10.9 million year on year.

MMYT expects net revenue for Fiscal 2011 to up to $59 million. During the quarter, the company experienced robust demand for international travel, owing to the festive season, and transaction and booking growth remained strong. However, the current (Jan-March 2011) is a seasonal low for the travel industry: On the conference call, MMYT CEO Deep Kalra said that their business typically has one quarter as a high, the other, low.

Acquires Luxury Tours & Travels Pte For Over $3 million

MMYT has also announced the acquisition of 79% in Singapore based Luxury Tours & Travel Pte Limited (LTT) for around $3 million, as an initial cash consideration for ordinary shares, and an investment of $0.75 million until June 2012, for the subscription of new equity shares to be issued by LTT. MMYT will also acquire the remaining shares from existing shareholders over a three year earn-out period ending June 2014, based on valuations linked to the profitability of LTT. Kalra said that LTT is expected to report $3.1 million in revenue this year, and they’re looking at this acquisition from the perspective of increasing their supplier base in South East Asia. “It’s a small revenue company but with excellent relationships, with tie-ups with over 100 hotels in Singapore, and around 25 in South East Asia,” he added. MMYT is looking to strengthen its presence in markets where Indian’s tend to travel: Hong Kong, Thailand and Malaysia have seen over 25% annual growth of inbound Indian visitors during the last quarter, and Singapore and Malaysia are key markets for LTT.

Segment Details

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Air Ticketing: MMYT claims 10% of the domestic air travel market. Revenue from air ticketing increased by 60.9% to $13.5 million for the quarter, up from $8.4 million the same quarter last year. Net revenue margins declined to 7.4%, from 7.7% a year ago, even though they were stable sequentially. Gross bookings were up 71.4%.

Hotels and Packages: Revenue from hotels and packages business increased by 52.0% to $21.5 million for the quarter, up from $14.1 million a year ago. Net revenue (revenue less service cost) increased by 27.9% to $2.95 million, from $2.31 million for the quarter ending December 2009. Gross bookings were up 65.5%, net revenue margin declined to 10.8% from 14.0% a year ago. On the conference call, Kalra said that the company had been aggressive in its hotel strategy, to maintain marketshare; year-to-date margins are at 11.5%, and they expect to keep that or slightly improve by the end of the year. The company says that the favorable terms provided to OTA’s during fiscal 2010 have now normalized. Domestically holiday packages to kerala, andaman etc continued to be top sellers. International hotels and packages bookings grew by over 70% YoY.

Notes:
– Other revenue increased to $0.8 million from $0.4 million, primarily due to increase in sale of rail tickets, bus tickets and travel insurance.
– the Corporate booking business is insignificant for MMYT, and their business is mostly B2C leisure travel.
– The Blackberry application that MMYT launched last quarter saw over 20,000 downloads. The company will now look to develop android and iPhone apps for Indian users.
– Personnel Expenses increased to $3.9 million from $2.4 million year on year
– MMYT formed a strategic partnership with the Sharjan National Travel and Tourism Agency (SNTTA), targeting non resident Indians in the Middle East.

Details: Press Release | Earnings Call | Previous Quarter


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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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