MakeMyTrip Q2 net revenue surges on ibibo buy, losses expand
Photo Credit: Shah Junaid/VCCircle

Nasdaq-listed MakeMyTrip Ltd, India’s largest online travel services provider, said on Wednesday net revenue for the quarter through September more than doubled but higher expenses widened its losses.

Net revenue, or revenue excluding service costs, surged 156.5% in constant currency terms to $139.2 million in the July-September period from $53.2 million a year earlier. Gross revenue rose 79.4% to $152.9 million.

However, net revenue fell sequentially from $141.2 million in the first quarter.

The company said the rise in revenue can be attributed to the acquisition of ibibo Group.

“The strong results… reflect the successful execution of our strategy to deliver high growth with increased operational efficiency leveraging increasing scale,” said Deep Kalra, group chairman and CEO at MakeMyTrip. “We also embarked on a comprehensive multi-brand strategy to leverage the strengths of our various brands in differentiated customer segments and travel services.”

The hotels and packages business continued to be the main revenue spinner and reported a 180% rise at $79.1 million. Revenue from the air ticketing business rose 95% to $47 million.

The company’s adjusted net loss expanded to $45.2 million from $25.3 million on the back of a steep rise in expenses related to marketing and promotions, personnel expenses and other costs.

Marketing and sales promotion expenses continued to be the single-biggest cost head and surged 140% to $115.9 million. Similar to the first quarter, the primary drivers of expenditure were customer inducement and acquisition programmes to ramp up the hotel booking business, advertisement expenses and the consolidation of marketing and sales promotion expenses of ibibo Group.

The ibibo consolidation also doubled employee expenses to $29 million from $14.2 million. Other operating expenses jumped 62% to $28.3 million due to an increase in payment gateway charges and outsourcing expenses related to the ibibo consolidation.

MakeMyTrip had agreed to acquire ibibo Group in October last year, in the biggest-ever consolidation move in India’s online travel services sector. The all-stock deal involved South African technology group Naspers and China’s Tencent—which owned 91% and 9%, respectively, in ibibo Group—selling the firm to MakeMyTrip in exchange for a 40% stake in the combined entity.

In September, Ashish Kashyap , co-founder of Ibibo Group and president of MakeMyTrip, announced his resignation, almost seven months after the merger.

In May, MakeMyTrip also raised $330 million (Rs 2,116 crore) from Naspers, Chinese travel firm and other investors.

The company competes with the likes of Yatra Online Inc, which operates travel portal

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