MakeMyTrip's Q1 Net Profit Shrinks; Revenues Jump

MakeMyTrip Ltd's net profit has fallen 79.7 per cent on a sequential basis to $0.75 million for the quarter ended June, 2011. The net profit has also dropped 42.7 per cent, as compared to $1.31 million in the corresponding quarter last fiscal.

Adjusted net income (profit for the period excluding employee share-based compensation costs, cost related to follow-on public offering, interest expense on the liability portion of preference shares, interest accretion on financial liability related to business combination, changes in the fair market value of embedded derivatives in the preference shares and income tax benefit (expense)) also dipped to $1.5 million compared to $1.7 million in the corresponding quarter last fiscal.

The NASDAQ-listed company has reported revenues of $52.04 million for the quarter, up 65.7 per cent quarterly from $31.4 million, and 54.3 per cent on an annual basis, from $33.72 million in the June quarter of last fiscal.

"MakeMyTrip was able to maintain strong growth in the quarter despite uncertain global economic conditions. Our success and market leadership were driven by offering customers great value for innovative travel products and by continuously improving their entire experience with MakeMyTrip. Additionally, our strategic marketing investment in this quarter has resulted in very robust growth in transactions and expansion of margins in our hotels & packages business, as we worked to further differentiate ourselves from our competitors," said Deep Kalra, chairman and CEO of MakeMyTrip Ltd.

The company has shared that excluding the effects of employee share-based compensation costs, follow-on public offering costs of $0.9 million in the current quarter, interest accrued on the liability portion of preference shares, interest accretion on financial liability related to business combination and changes in fair market value of embedded derivatives in the preference shares, it would have recorded a net profit of $1.5 million in the quarter ended June 30, 2011. The operations of LTT were consolidated into the company's financials from May 9, 2011.

Revenue from its hotels & packages business, which has tied up with more than 4,700 hotels in India, increased 57.6 per cent to $36.6 million, from $23.2 million in the corresponding quarter last year, and has more than doubled from $16.9 million in the previous quarter. In comparison, revenue from the air ticketing business rose 46.9 per cent annually to $14.7 million in the quarter ended June 30, 2011, from $10 million, and 5.75 per cent sequentially from $13.9 million in the previous quarter.

Gross bookings rose 49.4 per cent, but were offset by a fall in the net revenue margin, from 6.8 per cent in the quarter ended June, 2010, to 6.6 per cent in the quarter ended June, 2011.

Personnel expenses increased to $4.3 million in the quarter ended June 30, 2011, from $3.5 million in the quarter ended June, 2010.

MMT had posted a profit of $4.82 million for the year ended March 31, 2011, while revenues rose 49.3 per cent to $124.7 million, with both airline ticketing and hotels & packages divisions registering considerable growth. For the fiscal 2011-12, MakeMyTrip will maintain its full-year guidance range for revenue-minus-service-costs at $86-$89 million, as global economic uncertainties persist.

MakeMyTrip competes with companies like Yatra.com and Cleartrip.com in India. According to a recent report, 18.5 million online users above the age of 14 did visit travel sites in April this year. Out of them, Indian Railways had the highest number of visitors at 8.4 million, followed by MakeMyTrip with 3.9 million visitors while Yatra had 3.5 million, ClearTrip.com had 2.1 million and US-based Expedia Inc. saw 1.8 million visitors.