MakeMyTrip Research Tear Sheet Q4 FY 2022

MakeMyTrip is an Indian online travel company. It was incorporated in 2000. The founder is Deepak kaira. It is located in Gurugram, Haryana in India. The products include
Booking flights, hotels, holidays, buses, trains and cars. The company has its operation worldwide. It has international offices in New York, Singapore, Kuala Lumpur, Phuket, Dubai and Bangkok.  In comparison to India Travel Industry, Makemytrip has travelers not only in India but across the globe.

Impact of COVID-19 on the industry

COVID has impacted the sentiments of people, which has affected the habitat of the people. The booking for airlines, hotels have decreased significantly in 2021 and 2022. Moreover, there was the emergence of omicron variant and restriction were imposed by several countries on travel. This caused the revenue to steep downward. COVID vaccination is the game changer for the Travel Industry. People are thriving more for travel.  (47%) of travelers surveyed globally are planning to travel internationally. Moreover,Government of India has opened commercial and international flights effective 27th of March, which has helped to revive the international travel demand as well.

Key Financial Highlights                                                                                                             

Revenue increased 11.8% to $88.6 million. Revenue both from the hotel and ticketing business shows an increment of 18.6% and 7% respectively. However the increase in revenue for Q4 is mainly to the increase in domestic travel and decrease in COVID. The result from Operating Activities improved to a profit of $3.4 million in 4Q22. In FY 2022 Operating Activities was a decreased loss of $30.4 million. The Q4 shows an improvement in Adjusted Operating Profit to $12.0 million. For Q4 FY 22 it increased to $23.2 million.

Segment Analysis

The revenue is generated mainly from three sources the hotel business, air ticketing, bus ticketing and others. The revenue from air ticketing business increased by 4.6% to $25.3 million. The  Adjusted Margin – Air ticketing increased by 17.1% to $44.8 million. The Revenue from hotels and packages business increased by 18.6 to $45.1 million. The Adjusted Margin  of  Hotels and packages increased by 18.8% to $42.3 million. The Revenue from  bus ticketing business increased by 7.0% to $12.6 million.  The Adjusted Margin – Bus ticketing increased by 12.4% to $12.4 million. Revenue from our others business increased by 6.9% to $5.5 million in Q4 FY 2022. The Adjusted Margin – increased by 10.4% to $5.7 million.

Business Strategies

The company is targeting on share repurchase. Board of Directors has decided share repurchase plan until November 30, 2023. However, there is no share repurchase plan during the fourth quarter of fiscal year 2022. As on 31^st March 2022 the authority can repurchase up to approximately $136.0 million of our outstanding ordinary shares. The company shares a strong liquidity position. As per Balance Sheet the cash and cash equivalents and term deposits worth $477.5 million. Other than this it has credit facilities of $132.5 million.

Operational Efficiency

The company is targeting more on the online travel sector.  As of now there are 622 million active mobile and internet users in India, however the company expects it to be 900 million by 2025. More online user as of now is only 160 million, which is expected to increase 220 million by 2025.

Business Initiatives

The company has introduced a new travel focused Fintech Platform “TripMoney”. It has established itself in the market by attracting attracting 15 leading fintech players from NBFCs and banks to offer easy travel credit to the travelers. It is also providing services like INR-denominated global card, multicurrency forex card, foreign currency delivery PAN India and instant foreign remittances.

MakeMytrip has entered in a partnership with Amazon Pay went live and PhonePe. This will help to achieve greater value of customer satisfaction. Customer can pay directly for their bookings by using Amazon Pay and PhonePe.