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Online travel agency MakeMyTrip has reported a revenue of $267.4 million for the quarter ended 31 December. In its filings with the US Securities and Exchange Commission (SEC), the travel agency said it saw a 24.8% increase over the same period last year when revenue stood at $214.2 million.
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Its growth was fuelled by increased demand across various travel services including air ticketing where revenue rose by 18.6%, while revenue from hotels and packages grew at a similar 17.2%. The bus ticketing segment saw a notable rise of 31.7%, and the other businesses—car, rail, insurance, forex and all other ancillary services—saw a surge of 110.7%. It attributed the revenue growth to strong travel demand in India, particularly for both domestic and international travel, during the quarter.
The company reported a net profit of $27.1 million for the quarter, up from $24.2 million in the same quarter of 2023. Its adjusted net profit also rose, reaching $44.9 million, compared to $38.9 million a year earlier.
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Rajesh Magow, group chief executive officer, said in a statement, “The Indian travel and tourism sector is witnessing robust growth, reflecting a strong desire among travellers. In the first half of the year, 15 million travellers went abroad, growing 14% year-on-year. This number grew 12% over the 2019 figures. While Indian destinations continue to shine, many countries have made significant efforts to attract Indian travellers. Our strong performance this quarter reflects these macro trends.”
Air ticketing grew
Its air ticketing vertical had a revenue of $61.3 million, up 18% from $51.7 million during the same period in 2023. Interestingly, it gave almost half the amount in customer inducement costs $32.4 million. Customer inducement costs are expenses related to discounts, promotions, or incentives offered to encourage customers to make the purchase.
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Despite the increase in revenue and profitability, the profit as a percentage of gross bookings in this segment slightly decreased to 6.1%, down from 6.3% in the same quarter the previous year. Adjusted margins for the air ticket business decreased slightly because, even though its revenue went up, the company’s costs (like discounts or special offers) increased. The adjusted margin as a percentage of total bookings went down a bit, from 6.3% to 6.1% over the corresponding quarter a year before.
Hotel packages grew but revenue remained stable
Makemytrip’s hotels and packages business saw a 17.2% increase in revenue, reaching $147.1 million for the quarter, up from $125.5 million in the same period in 2023. This growth was driven by a 21.9% rise in gross bookings, largely due to an increase in the number of hotel room nights booked, as more people travelled both within India and internationally.
The company also reported a similar, 23.4% increase in profitability in this segment, with adjusted profits rising to $121.9 million from $98.8 million last year. However, just like air tickets, discounts reigned supreme here as well. The increase in profits was partly offset by higher costs associated with discounts and promotion, which rose to $44.1 million, up from $35.7 million in the previous year. Despite these higher costs, the adjusted margin as a percentage of revenue increased slightly, growing from 17.7% to 17.9%.
Bus ticketing sees significant growth
Its bus ticketing business grew by 31.7% in the quarter, with revenue reaching $31.8 million, up from $24.2 million over the corresponding quarter last year. This boost was driven by increased demand for bus travel. The company also reported a 30.2% increase in profitability for the bus ticketing segment, reflecting strong growth.
Service costs rose but so did marketing costs
The company reported a strong service cost rise—or the money it charges customers when they book—by 24.1% to $77.4 million for the quarter, up from $62.4 million a year earlier. This increase was mainly driven by strong travel demand, particularly in the company’s packages business in India, as well as an $8.1 million rise in service costs related to the car booking business, it said.
But marketing and sales promotion expenses climbed steadily too at 31.2% to reach $47.3 million, from $36.1 million in the same quarter last year. This was due to higher expenditure on events, brand-building, and promotions to meet strong demand, it said. Overall customer inducement costs also increased, reaching $80.5 million in the latest quarter, up from $66.0 million a year ago.
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