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Hotels now 56% of MakeMyTrips business; losses continue

makemytrip q1 fy17

This is MakeMyTrip’s 15th straight loss making quarter. The company reported a loss of $14.3 million for the quarter ended June 2016 (Q1 FY17), up from $6.9 million for the same quarter last year. “Excluding the effects of employee share-based compensation costs, amortization of acquisition related intangibles, net change in value of financial liability related to business combination, share of loss of equity-accounted investees, income tax expense for both quarters ended June 30, 2016 and 2015; net change in fair value of derivative instrument for the quarter ended June 30, 2016 and merger and acquisitions related expenses for the quarter ended June 30, 2015, we would have recorded a net loss of $30.4 million in the quarter ended June 30, 2016 and a net loss of $2.2 million in the quarter ended June 30, 2015,” it said.

Segment revenue

Revenues from the hotels and packages segment accounted for 56% of MakeMyTrip’s total revenue in the quarter, largely because of a 478% increase in hotel booking for the company. During the quarter, MakeMyTrip reported 1.42 million hotel bookings, of which as many as 73% came on mobile. Hotels and packages, as a percentage of net revenue (revenue less service costs) stood at $33.21 million, around 56% of MakeMyTrip’s total net revenue of $58.87 million. Standalone hotel bookings accounted for over 91% of hotels and packages. In November 2015,MakeMyTrip launched Value+, a brand of budget hotel rooms, offering rooms starting at Rs 1,000 per night.

As we explained in detail earlier, airline ticketing as a business has its limits, because of the nature of the market, and hotels are the primary focus area for most travel sites.


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MakeMyTrip is in the midst of a buyback process, having been authorized to buy up to $150 million at a price of up to $21.50 until November 30, 2021. As of June 30, 2016, MakeMyTrip has spent around $14 million in buying shares, buying 972,730 shares at an average price of $14.43 per share.

Notes from the results

Note that the table doesn’t represent gross bookings or revenue, which is essentially the value of tickets sold. MakeMyTrip reported gross bookings of $121.2 million in bookings in the quarter. Some notes from the results:

  • There was an increase in net revenue margin (defined as revenue less service cost as a percentage of gross bookings) from 5.5% in the quarter ended June 30, 2015 to 6.5% in the quarter ended June 30, 2016, primarily as a result of an improvement in the negotiated rates and incentive deals.
  • There was an increase in air travel during the quarter, owing to “lower airfares, new entrants in the air travel market and the expansion of the Indian economy”.
  • Hotels and packages margins increased owing to “better negotiated rates and higher performance linked and other incentives from our vendors.”
  • The $1.78 million in “Other revenue” grew “due to an increase in facilitation fees on travel insurance”.

Note that, earlier this year, MakeMyTrip raised $180 million in convertible bonds from China’s travel company Ctrip. Ctrip also bought MakeMyTrip’s shares from the open market.

Download: Balance sheet and results press release

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