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MakeMyTrip Q3-FY15 loss at $3.66M; Air Ticketing revenues up 10.1%

makemytrip

Online travel agent MakeMyTrip continues to post losses: It has reported net losses of $3.66 million for the quarter ended December 30, 2014, as compared to $1.6 million loss in the same quarter last year. This is MakeMyTrip’s 9 straight loss making quarter.

The net revenues (revenues less service costs) however witnessed a significant 22.9% growth to $35.1 million for the quarter, from $28.6 million in the same quarter last year. The gross bookings also grew by 34.6% to $419.2 million from $311.3 million in the same quarter last year.

Air Ticketing up 10.1%: Revenues from Air ticketing business grew by 10.1% to $18.1 million for the quarter, from $16.5 million in the same quarter last year. This was driven by a 47.3% increase in transactions to 1.32 million for the quarter, from 0.89 million transactions in the same quarter last year. MakeMyTrip attributed this transaction growth to the special air fares offered by Indian domestic carriers.

Gross bookings also grew by 34.6% to $301.8 million for the quarter, from $224.2 million in the same quarter last year. Net revenue margins however dipped to 6% from 7.3% last year.

Air Ticketing accounted for 51.6% of MakeMyTrip’s net revenues for the quarter, down from 57.6% in the same quarter last year.

Hotel and Packaging: Revenues from the hotels and packages business grew by 43.5% to $15.8 million for the quarter, from $10.99 million in the same quarter last year. Number of transactions also grew by 46.5% to 0.34 million for the quarter, from 0.23 million transactions in the same quarter last year. MakeMyTrip attributed this transaction growth to growth in their standalone hotel booking business, and partially because of their acquisition of EasyToBook in February last year.

Gross bookings grew by 34.7% to $117.3 million for the quarter, from $87.1 million in the same quarter last year.

Hotels and Packaging business contributed for 44.2% of MakeMyTrip’s net revenues for the quarter, up from 38.4% in the same quarter last year. That being said, its worth noting that the segment has been driving MakeMyTrip revenue growth for a few quarters now and had even surpassed Air ticketing revenues for the company in Q1-FY15.

Other Revenue: Other revenues grew by 7.8% year-on-year (YoY) to $1.17 million for the quarter, from $1.09 million in the same quarter last year. This was primarily due to an increase in facilitation fees on travel insurance.

Ad expenses up: The company notes that its advertising expenses increased during the quarter to grow its hotel & packages business. The ad expenses along with increased payment gateway charges and consolidation of the EasyToBook acquisition resulted in a 23.3% increase in MakeMyTrip’s “other” operating expenses to $24.6 million for the quarter, from $20 million in the same quarter last year.

Investment in Simplotel: During the quarter, MakeMyTrip acquired a minority stake in Bangalore-based digital hotel marketing solutions company Simplotel for an undisclosed amount, as a part of its Innovation Fund investments. The company also informed that they have committed to make a further investment in Simplotel by June 2015, which would increase its stake to 25%.

MakeMyTrip had set up a $15 million Innovation Fund for investing in early-stage companies in the travel technology space, with a special focus on mobile and IP-based companies, and to explore M&A opportunities, in the previous quarter.

The company had previously acquired EasyToBook Group to strengthen its travel technology stack and improve its hotel offerings in Europe. MakeMyTrip along with SAIF Partners had also acquired 76.6% stake in online travel meta search engine iXiGo for $18.5 million.

Appointments: Earlier this month, MakeMyTrip had appointed Saujanya Shrivastava as its new chief marketing officer. Shrivastava will be responsible for leading marketing initiatives across the company’s business lines and group entities and his key areas of focus will involve strengthening brand association with leisure travel, driving customer engagement & loyalty, and the mobile platform.

MakeMyTrip co-founder, director & group chief commercial officer Keyur Joshi will be transitioning into a strategic advisory role with the company, which will come into effect from May 2015. Current group chief financial office Mohit Kabra has been inducted into the Board of Directors in place of Joshi, with immediate effect.

Hindi app: During the quarter, MakeMyTrip also launched its Hindi app, and plans to add support for 4 more Indian languages including Gujarati, Tamil, Telugu, and Malayalam in the first half of this year. MakeMyTrip said it has been witnessing an increasing amount of traffic coming from tier II and tier III cities on mobile, which prompted it to launch a Hindi app.

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