MakeMyTrip revenue grows steadily at 24% as travel demand strengthens

Online travel agency MakeMyTrip reported revenue of $267.4 million for the quarter ended Dec. 31. The travel agency said in a filing with the U.S. Securities and Exchange Commission (SEC) that its revenue increased 24.8% from the same period last year, when it earned $214.2 million.

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Its growth was driven by increased demand for various travel services, including an 18.6% increase in air ticket revenue, while hotel and package revenue also increased by 17.2%. The bus ticketing segment grew significantly by 31.7%, and other businesses – automobile, rail, insurance, foreign exchange and all other ancillary services – grew by 110.7%. It attributed the revenue growth to strong travel demand in India during the quarter, especially domestic and international travel.

The company reported net income of $27.1 million for the quarter, up from $24.2 million in the same quarter of 2023. Its adjusted net income also increased, reaching $44.9 million, compared with $38.9 million in the same period last year.

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Group CEO Rajesh Magow said in a statement: “Indian tourism is growing strongly, reflecting the strong desire of tourists. In the first half of the year, 15 million outbound trips were made, a year-on-year increase of 14%. This number is an increase from 2019 12%. While Indian tourism destinations continue to shine, many countries have also made significant efforts to attract Indian tourists. “Our strong performance in the quarter reflects these macro trends.”

Air ticket business growth

Revenue from its air ticket vertical business was $61.3 million, an increase of 18% from $51.7 million in the same period in 2023. Interestingly, it spent almost half that amount on customer induction costs of $32.4 million. Customer induction costs are the expenses associated with discounts, promotions or incentives offered to encourage customers to purchase.

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Despite the growth in revenue and profitability, the segment’s profit as a percentage of total bookings fell slightly to 6.1%, down from 6.3% in the same period last year. Adjusted profit for the air tickets business fell slightly as the company’s costs, such as discounts or special offers, increased despite higher revenue. Adjusted margins as a percentage of gross bookings declined slightly, to 6.1% from 6.3% in the year-ago period.

Hotel packages grow, but revenue remains steady

Makemytrip’s hotel and package business revenue grew 17.2% to $147.1 million in the quarter, up from $125.5 million in the same period in 2023. The growth was driven by a 21.9% increase in gross bookings, primarily due to an increase in hotel room nights booked as more people travel within India and internationally.

The company also reported a similar 23.4% increase in profitability in the segment, with adjusted profit rising to $121.9 million from $98.8 million last year. However, just like air tickets, the discounts here reign supreme. The profit increase was partially offset by higher costs related to discounts and promotions, which increased to $44.1 million from $35.7 million in the prior year. Despite higher costs, adjusted profit as a percentage of revenue increased slightly, from 17.7% to 17.9%.

Significant growth in bus ticketing

Its bus ticketing business grew 31.7% in the quarter, with revenue reaching $31.8 million, up from $24.2 million in the same period last year. This growth was driven by increased demand for bus travel. The company also reported a 30.2% increase in profitability in its bus ticketing division, reflecting strong growth.

Service costs rise, but so do marketing costs

The company reported that service costs, or what it charges customers when they book a reservation, jumped 24.1% to $77.4 million in the quarter, up from $62.4 million in the same period last year. The company said the increase was primarily due to strong travel demand, particularly in its package business in India, and an $8.1 million increase in service costs related to its car booking business.

However, marketing and promotional expenses also climbed steadily, from US$36.1 million in the same period last year to US$47.3 million, an increase of 31.2%. This was due to increased spending on events, brand building and promotions to meet strong demand, the report said. Overall customer induction costs also increased, from $66 million in the year-earlier period to $80.5 million in the latest quarter.