MakeMyTrip [MMYT] Conference call transcript for 2022 q1
2022-05-25 11:29:15
Fiscal: 2022 q4
Operator:Vipul Garg: Hello, everyone. I'm Vipul Garg, Vice President, Investor Relations at MakeMyTrip Limited. And welcome to our fiscal year '22 - and fiscal year '22 Fourth Quarter and Full Year Earnings Webinar. Today's event will be hosted by Deep Kalra, our company's Group Chairman and Chief Mentor, joining him is Rajesh Magow, our Co-Founder and Group Chief Executive Officer; and Mohit Kabra, our Group Chief Financial Officer. As a reminder, this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today's event. At the end of these prepared remarks, we will also be hosting a Q&A session. Furthermore, certain statements made during today's event may be considered forward-looking statements within the meaning of safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are subject to inherent uncertainties, and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date, and the company undertakes no obligation to update the information to reflect changed circumstances. Additional information concerning these statements are contained in the Risk Factors and Forward-Looking Statements section of the company's annual report on Form 20-F filed with the SEC on July 13, 2021. Copies of these filings are available from the SEC or from the company's Investor Relations department. I would like to now turn over the call over to Rajesh for his remarks. Over to you, Rajesh.
Rajesh Magow: Thank you, Vipul. Welcome, everyone, to our fourth quarter and full year earnings call of fiscal 2022. I hope everyone joining us today is keeping safe and healthy. India went through third COVID wave with Omicron variant that started in December 2021 and continued during January and February. While the reported cases were high, severity of infection was low as compared to the delta variant, they're possibly aided by significant vaccine coverage, which has now crossed about 1.9 billion doses. Travel slowed down with the onset of Omicron but picked up again later part of the quarter when Omicron started to recede. Demand started to come back, especially for leisure segments, albeit momentum remained under pressure due to inflationary pressure due to price increase of fuel leading to high airfares. This full fiscal year overall was the second pandemic impacted year for travel sector with the robust recovery phases in between waves. However, what is encouraging now is that pandemic-related movement restrictions have been lifted across India and pretty much in the rest of the world, except China, leading to travel coming back to near normal. Consumer sentiment for travel, especially for leisure is quite positive right now, and more and more people are looking to travel for vacations in 2022. Government of India also opened commercial international flights from 27th March, and this is helping revive the international travel demand as well. In fact, as we enter summer holiday season, we are witnessing pent-up demand for both domestic and international leisure travel. While the interest and demand momentum has been strong, we are watchful of geopolitical crisis, inflationary pressures and its ripple effects on the overall economic environment and travel demand in the future. As highlighted earlier, there has also been a significant improvement in online buying behavior during the pandemic, leading to growth in Internet users across all demographics. As a result, while other e-commerce categories have seen accelerated growth in number of transactions, we expect online travel sector to benefit from this shift in future as things normalize and more and more people start to travel. Currently, there are 622 million active mobile Internet users in India, which are expected to grow to about 900 million by 2025, driven by smartphone penetration. Similarly, online shopper base is expected to reach 220 million by 2025 from the current base of about 160 million. We are also aiming to increase our online penetration to bring new users to transact on our platform, but not only continue to focus and grow our leading travel use cases of air hotels and packages, including alternative accommodations and bus but also investing behind adding and growing other travel and adjacent use cases in line with or already called out vision to be the travel super app. We recently expanded our rail and intercity cab booking services with RedRail on RedBus platform, as well as an independent RedRail app and ride our intercity cabs to make our RedBus platform a comprehensive ground transport services platform now. This would help booking any of the services super convenient for our ground transport travellers. We also believe both rail and cabs offering will be a significant source of new customer acquisition in the coming years. With our promise to add ancillary use cases in this reported quarter, we launched Global Cash Card by TripMoney, our travel-focused fintech initiative to cater to ForEx needs of our international outbound travelers. In terms of targeting new travel growth segments, apart from going deeper in penetration to Tier 3 and Tier 4 cities on the B2C side, we are now aggressively growing B2B corporate travel segment with our SMEs and large enterprise product solutions, via myBiz and Quest2Travel brands that are becoming increasingly popular with the clients. In addition, we are also driving B2B2C demand through our myPartner and My Affiliate Solutions. Coming to the highlights of Q4 quarter now. During the reported quarter, despite the headwinds and slowdown in business compared to the previous quarter, we were able to ensure sustained profitability in operations with gross bookings touching $1 billion. In our Air business, we continue to maintain our leadership position. We continue to gain market share, and our share in Q4 '22 was 30.1% as compared to 29.7% in Q3 fiscal year '22. For domestic traffic, leisure destinations like Srinagar, Dehradun, Leh have shown more than 100% recovery, high airfares due to increase in fuel prices affected the demand momentum to some extent, but we continue to see steady recovery on the back of pent-up demand in leisure- in leisure travel during summer holidays. International flight daily departure supply has also now started to scale in April 2022. Nearly 65% of the capacity has come back overall as compared to January 2020, which is pre-pandemic. U.S., Maldives and Nepal are key destinations, wherein capacity recovery has touched 100%, while UAE is at about 85% of recovered supply levels. As things open further, demand recovery will be led by popular destinations for Indians like Thailand, Malaysia, Singapore, Indonesia, Dubai, Maldives, all of Europe, et cetera. Coming to our hotels, packages and alternative accommodations business, where demand pattern was not any different from January and February months, but where January and February months were somewhat impacted by Omicron. But steady recovery starting March on account of leisure travel, wedding, social and corporate events. Supply of rooms has now started to stabilize, and we have seen steady demand recovery across all price segments. Most of leisure destinations are already clocking volumes above pre-pandemic levels and the outlook for Q1 remains strong. We continue to improve our product offering and bring more and more hotels online. As mentioned earlier, we are going deeper into the country, and we have now hotels listed from 1,600 cities as compared to 1,300 cities in fiscal year '20. This extensive inventory is helping us bring new users from Tier 3 and Tier 4 towns on our platform. We have further improved the experience for our Luxe collection of super premium properties. We've started offering Luxe packages, which deliver more value to the customer and bring additional revenues for the hotels. These value-added services have been well received by our customers. One of the trends that will continue to remain strong is preference for alternative accommodations and short breaks. People are opting for Staycations in home space
