Sachin Salgaonkar

Sachin Shrikant Salgaonkar inquired about the hotel business's year-on-year growth, noting a slowdown from 17% last quarter to 9% this quarter, and asked for clarification on normalized growth considering GST impact and rupee depreciation. He also questioned the expected domestic air traffic growth for calendar 2026 following IndiGo's capacity cuts and sought feedback on Mira's performance and MakeMyTrip's strategy against potential competition from Google/ChatGPT in agentic AI for travel.

Answer

Mohit Kabra, Group CFO, clarified that the reported 9% hotel growth was impacted by GST rationalization (a blended 5% effect on GBV) and currency fluctuations, with constant currency GBV growth at 15.8% and volume growth over 20%. Rajesh Magow, Co-Founder and Group CEO, stated that domestic daily departures, which were -5% in December, are expected to return to flat or 1-2% positive growth in the current quarter, with clearer recovery by summer schedules. Mr. Magow provided positive Mira metrics, including 50,000 daily interactions and 20% new users from Tier 3/4 cities, and expressed confidence that MakeMyTrip's direct traffic, brand strength, and deep fulfillment capabilities would mitigate competition from generic AI tools, viewing AI as an opportunity.

Sachin Shrikant Salgaonkar inquired about the year-over-year growth in the hotel business, noting a reported 9% growth this quarter compared to 20%+ previously, and asked for clarification on the impact of GST and rupee depreciation, and expectations for normalized growth. He also asked about the impact of IndiGo's capacity cuts on domestic air traffic growth for calendar 2026 and the normalization timeline. Additionally, he sought feedback on Myra (agentic AI) and the potential competitive threat from Google and ChatGPT launching similar AI tools in India. Finally, he asked about revised timelines for a potential India IPO following the NCLT approval for the MakeMyTrip and redBus merger.

Answer

Mohit Kabra (Group CFO) clarified that the reported 9% growth was due to GST rationalization, which reduced rates by 7% on sub-INR 7,500 rooms (affecting over 70% of volumes), leading to a 5% blended impact on Gross Booking Value (GBV). He stated that constant currency GBV growth was 15.8%, aligning with volume growth when factoring in GST, and this impact is expected for four quarters. Rajesh Magow (Co-Founder and Group CEO) addressed the air traffic disruption, noting December's -5% daily departures but expecting a return to flat or 1-2% positive growth in the JFM quarter, with full clarity by the summer schedules. Mr. Magow provided positive Myra metrics, including 50,000 daily interactions, a 3.9 quality score, and 20% new users from Tier 3/4 cities, emphasizing its role in trip planning. He views GenAI as an opportunity, believing it will shift share from conventional search for trip planning, and MakeMyTrip's strategy focuses on protecting direct traffic and leveraging its brand. Regarding the IPO, Mr. Magow confirmed the merger facilitates an eventual IPO but stated no change in thought process or revised timelines.

Sachin Salgaonkar of Bank of America inquired about MakeMyTrip's full-year growth outlook given Q1's performance against the 20% target, the state of consumer sentiment following recent negative events, and the potential for an IPO in India.

Answer

Group CFO Mohit Kabra stated that with adjusted margin growth near 19% in constant currency, the company is on track for its high-teens to 20% full-year target, expecting growth to accelerate. Group CEO Rajesh Magow added that consumer sentiment and air supply are recovering from the temporary disruptions. Regarding an IPO, Mr. Kabra reiterated it remains a medium-term opportunity tied to future fundraising needs, which are not immediate given the company's strong cash position.

Sachin Salgaonkar of BofA Securities inquired about MakeMyTrip's future strategy for selling and marketing expenses, the expected growth trajectory for the company and the broader industry, and the potential competitive threats from emerging agentic AI frameworks.

Answer

Group CFO Mohit Kabra stated that marketing spend will remain around 5% of gross bookings to fuel investment in new services and geographic expansion, with a continued focus on growth in the 20% range. Co-Founder and Group CEO Rajesh Magow addressed the AI question, explaining that MakeMyTrip's competitive advantage lies in its proprietary data and speed of execution. He noted that while they watch global peers like Trip.com, no single player is significantly ahead, and the focus is on leveraging available foundational models to build a superior, integrated user experience.

Sachin Salgaonkar of BofA Securities inquired about the 2025 growth outlook for the air travel segment given ongoing aircraft engine issues, the reasons for the quarterly decline in take rates, and the potential for adjusted EBIT margin expansion. He also asked about fluctuations in finance income and costs.

Answer

Rajesh Magow, Co-Founder and Group CEO, acknowledged that the resolution of airline supply constraints is delayed by another quarter or two, though new supply is slowly being added. Mohit Kabra, Group CFO, explained that the take rate decline was 'largely optical' due to higher average selling prices in a seasonally strong quarter. Regarding margins, Kabra stated the company's aim is to reach the 1.8% to 2.0% range and will reassess further expansion potential then. He attributed the finance income and cost changes to foreign exchange fluctuations.

Sachin Salgaonkar inquired about the slowdown in hotel booking growth, the potential for a broader consumption slowdown, the financial impact of the GenAI tool Myra, and the competitive effects of IndiGo's direct booking initiatives.

Answer

Group CEO Rajesh Magow attributed the hotel slowdown to temporary heavy monsoons, noting a rebound and no signs of a broader consumption slowdown in early Q3. He stated that the full P&L impact of GenAI efficiencies and conversion improvements is still a couple of quarters away, though early results are encouraging. Regarding IndiGo, he emphasized that MakeMyTrip's focus on superior customer experience, differentiated features, and a strong value proposition has sustained its market share.

Sachin Salgaonkar of BofA Securities asked about the potential to increase e-commerce take rates, noting that the gap with competitors has narrowed. He also inquired about the company's plans for its growing cash balance, asking for directional thoughts on uses such as international expansion, dividends, buybacks, or debt repayment.

Answer

Group CFO Hou Tianyu stated that the commission take rate is reviewed regularly and there is still potential for growth over time. Chairman and Group CEO Forrest Li addressed capital allocation, confirming the company's strong cash position provides operational flexibility. He said that shareholder returns like dividends and buybacks are 'definitely on the table' and being actively reviewed. He also mentioned remaining open-minded about using cash for building new capabilities, like AI, or for potential acquisitions.

Sachin Salgaonkar asked about the margin outlook for the Brazil e-commerce business post-breakeven, the evolution of the credit business there, and where incremental investments will be focused across the company.

Answer

Forrest Li, Chairman and CEO, said the goal for Brazil is to continue growing profitably, using the breakeven as a base. He is optimistic about the credit business there due to good product uptake and a refined risk model. He explained that all investments are made prudently, with clear payback periods for logistics and positive unit economics for user acquisition in DFS and e-commerce.

Sachin Salgaonkar asked about the potential steady-state GMV growth for the deliveries business and whether it could accelerate further. He also inquired about the company's perspective on a potential consumption slowdown in the region.

Answer

Chief Financial Officer Peter Oey and Chief Executive Officer Anthony Tan expressed bullishness on Southeast Asia, citing its under-penetrated market and strong inbound tourism, stating they are not seeing a slowdown. Regarding GMV growth, Peter Oey highlighted the recent acceleration to 16% YoY but did not provide a specific long-term target, emphasizing a focus on sustainable growth through product execution. Chief Operating Officer Alex Hungate added that October and November data showed continued acceleration.