Q1 2023 MakeMyTrip Ltd Earnings Call
<unk> been helped grow domestic tourism, many fall in coming years.
Almost all the airlines are placed orders for new planes over the years.
On the other hand fuel hospitality chains have also announced net expansion plans matured active capacity and fuel domestic travel growth.
As a comprehensive travel service provider, we hope to leverage these macro growth growth trends.
Let me now talk about the performance and the key travel segments and I would mention the prospects on some of the future growth areas, both on the supply side and demand side.
Coming to business segments in our air business, we continued to maintain our leadership position in market share we are recovering faster than the market during the quarter, we witnessed over 90% recovery as compared to pre pandemic levels. This is immediately on account of travel demand opening and more people traveling during the summer holiday season.
I talked about earlier this is affected recovery momentum to some extent leisure destinations like Srinagar data dune Lee have shown more than 100% recovery, while witness in metro destinations like Delhi, Mumbai, Bangalore et cetera.
<unk>.
A bit due to high fares and corporate demand still charter full recovery on international travel short haul destinations like Southeast Asia, Maldives, UAE and Nepal witnessed strong recovery in the next few months.
Lisa backlog gets cleared and new lease our issuances for European and American destination. This timeline, we expect to see stronger demand recovery in these long haul destination resort.
Coming to our hotels packages and alternative accommodation business.
The strong recovery driven by leisure travel supply side services have now stabilized in the top selling hotels, 90% of the rooms are open and almost all chain hotels are now fully functioning in many of the leisure destinations. We are now seeing growth OSB pandemic levels, which has helped taking the overall volumes recover.
In this segment to around 87% of the pre pandemic volumes.
The accommodations I'll focus on building homestay supply has helped us improve supplier leisure cities such as the <unk> integration nominally masuda.
Art gun's annually, which has helped us get past the pandemic volumes in this category.
Also launched Homestay awards, which had one of its kind in the country and will help popular popularized this category further.
The awards attracted nominations from June 2500, plus home space.
Ross the country consumer voting is going on and more than four four lakh 60000 votes have already been caused by the users. We continue to add more properties on our platform and increase our supply mode.
It is encouraging to see that more and more properties in smaller towns are keen to come on our platform and sell online in Q1, we sold rooms and over 43000 properties spread over 90% of both cities, which reflects the extensive support being provided to small accommodation service providers, particularly in the more towns and building deeper engagement with supply.
When customers and larger pilot.
Coming to our bus ticketing business, we maintained our recovery momentum in the seasonally strong quarter.
The demand and supply and the company has been lagging in southern states of seminar, who cannot gorilla in the coming quarters reopening of offices and gradually move away from remote working in the corporate sector, especially in the it sector should help drive full restoration of demand on the product side, we launched a project aimed at increasing the last minute bookings.
That offer adverse tool targeted interventions on select routes by ensuring price competitive competitiveness and and pricing advantage with offline channels. Additionally, intervention such as keeping the booking window Oakland at avoiding point index of dye multiple projects based on their time by delays as well as showing the earliest.
Available bus had been nearest boarding points have helped improve conversion rates with us we launched new initiatives to differentiate our brand might experience seven robust lounges across top loading point span, India, including for Kathy coffee lounges in Bangalore.
Now functioning.
Let me now share more details on the current areas of investment which would be growth drivers in the next few years as the scale up. These include both supply side initiatives in the months ahead initiatives apart from small inroads in adjacent markets like DCC on the supply side, our investments are prime it are primarily towards bringing.
More and more small service provided in accommodations onto our platform and ground transport services like Vaillant and Pacific apps. We now have a commendation service provided in about 19 ended cities up from 600 cities earlier.
Aimed to have accommodation supply and overdue thousands of these before the end of this fiscal year.
On input transfer use case, we recently piloted to promote carbon efficient services, particularly in the metro cities, starting with our partnership with Blue Smart a ride sharing company with electrical vehicles offering our customers hassle free guaranteed and on time pickup and drop experienced steadily airport.
We are looking to expand the supplier at other locations through similar partnerships.
One of the key objectives around our ground transport services to acquire customers, particularly in the in the line and eventually get them to buying other travel services on our platforms are.
Our key initiatives under demand segments had shared earlier.
I focused on getting to the corporate travel demand via my vision Quest for travel Q2 deep platforms as well as improved outreach to customers in the hinterland by tapping into the small travel agents across the country for last leg booking facilitation via our my partner our platform.
And to our franchise stores are down.
That is to double the booking contribution coming from these demand segments from about 7% last year to about 15% over the next few quarters.
According to our estimates we are now the largest OTT bothering the travel demand from Indian cartridge <unk> platform targeting with the Smes and <unk> platform for large culprits, maybe I did notable clients like cin protect guncotton, Betty logistics et cetera during the reported quarter.
Coming to our foray into the GCC market.
First focus has been the UAE market and it continues to scale Q1 has been a good quarter for us with market showing strong recovery post omicron wave and seasonal customer demand around E holidays. During Q1, our gross bookings grew two three X quarter on quarter organically Alberto.
On a low base.
We have made significant progress in building supply centre in automation.
First target is to be the leading OTA in UAE by the end of this fiscal year.
Before I wind up I would like to reiterate that the outlook for travel industry has improved considerably.
And we started the fiscal on a strong note with robust top line recovery and growth in profits.
Let me now hand over the call to Mohit for financial highlights of the quarter.
Over to you Mark.
Thanks.
Hello, everyone I hope, you're all staying safe and keeping healthy.
During the last two years under the pandemic.
Been focused on tight cost control.
Personal profitability, while being in the recovery phase.
Here, the objective will be to improve profitability, along with strong bookings growth over the previous year.
Before getting into the financial highlight I'd like to call out two specific things.
While our operating business is largely in currency of five.
Mentioned reporting is in U S dollars.
Significant weakening of the INR USD during the quarter have a cancellation or restatement impact and that focus on growth in constant currency to reflect the stronger and then it grows in the operating currency.
The year on year growth metrics during the reported quarter.
Look really high because Q1 last year was significantly impacted by the second wave of the COVID-19 pandemic.
Therefore focus on quarter on quarter growth to reflect the continued strong momentum in travel demand recovery.
I am glad to report that during the reported quarter.
We posted very strong growth and profit numbers, we've achieved 63, 3% quarter on quarter growth in bookings on a constant currency basis about Trump posting our highest quarterly adjusted operating profit.
There's still a bit of 16 and a half million dollars.
I think the noncash expenses.
Cash operating profit are interested EBITDA stood at about $21 million.
During the quarter.
Hey, ticketing I think margin stood at $66 million registering a 38, 7% growth over the previous quarter on constant currency basis.
We are glad to share that our domestic flight segments have nearly recovered to pre pandemic levels.
Same quarter in fiscal year 2019 'twenty.
Good recovery on international flights is it still around the halfway mark.
But mostly the reason that I have already been called out biologics.
The EBITDA margin for the quarter were unexpected length at about six 1% in <unk>.
The high Air fares.
And therefore, you can see the average selling price in domestic flight.
18, 6% versus last quarter.
And just in margin in our hotel and packages business stood at $66 9 million.
Witnessing a growth of 62, 3% quarter on quarter in constant currency terms, we witnessed a surge in bookings this quarter aided by the holidays or vacations and seasonality.
The segment came in line with our expectations at about 72%.
Selling price of our domestic hotels was up.
11, 5% over the previous quarter.
And our bus ticketing business.
The quarterly a district wide and it stood at about $28 million registering very strong quarter on quarter growth.
<unk> 72, 3% in constant currency.
Good in line without expectations, there at about eight 8%.
The average selling price increased in Boston bus ticket was a bulk of 10, 6% over the previous quarter.
Margin in our <unk>.
Other businesses was $7 $90 million, which is a 42% quarter on quarter growth in constant currency terms.
Turning to our operating costs, we continue to be prudent with our video will expand especially the customer acquisition cost marketing and sales promotion expenses stood at about five 1% of gross bookings in line with the five 1% reported during the last fiscal year.
While it has been reported earlier during the quarter, we took a majority stake in India's leading online products, Colorado look my products to help build ancillary products and services.
Part of our trip Fintech platform to meet the growing need to up our traveling customers.
As international travel picks up.
Will allow us the opportunity to service the products requirements of our customers.
We'll continue to leverage our strong brands and cash position to drive and expand in the areas of future growth already outlined by dish.
With that I'd like to turn the call back to reboot for Q&A.
And Kim Mohit.
Any of the 10 days of want to ask the questions. Ken. Please click on the <unk> button on their screen and we will take the questions one by one.
Well just to give a minute part question keep it simple.
First question is from the line of <unk> Chen of Citi.
You May please ask your question now.
Thank you can you hear me, yes. It can handle is great. Thanks.
Congratulations on a great set of numbers Oh. My first question is just the <unk>.
Andy Sps the average ticket size of DAA transactions, how much of it is being driven by the price increases in domestic aviation and how much of an impact from our international improvement.
And if we can get it and you know if you can talk about the overall how much has internationally improved on a Q O Q basis.
Travel budget that could take that Oh about multiple enbrel.
Yes.
Like I called out on the.
Domestic demand.
And on an average AUM increased by about 18, 6% over the previous quarter.
Is it kind of an all in Brazil.
On the domestic side.
Clearly the recovery has been kind of an animal data.
Called out international recovery is kind of in the more in the field right now.
And therefore kind of lagging a couple of reasons over the mine, they're kind of doing well.
Right well under short haul destinations.
Southeast Asia et cetera.
Doing well, although the recovery in the long haul destinations, particularly in Europe , you have a plethora is.
If you took it up.
And you know the multiple moves over there including.
Including high Airfares and all over the phone without.
Assurances of new reserves.
Thank you.
It really impacted because of the large backlog again these ambitions.
So I believe.
B B.
The improvement of all three.
Recovery in the long run will actually be a little bit.
Would it be something that we look forward to in the coming quarters.
Got it thanks for my second question is.
Within the domestic hotel business also is it is budget kirkman she'll lagging relative to the premium segment, because there's a fairly decent jump in the average ticket size, there as well and just a clarification question to what Rajiv said earlier.
You mentioned new channels.
Do you aim to have their contribution doubled from 7% to 15% I just wanted to understand what that what are you, including in that 7% number.
Sure I could take book.
And when it comes to the domestic hotel goes through.
It's been a bit of a kind of.
Please read back like Ricardo Dsp's have increased by about 11%.
As far as recovery is concerned.
Again, why the budget segment was lagging very significantly over the last fiscal year.
Over the last two years, it's actually kind of you know not only improving so while pre pandemic it used to be more than me.
The high power. These two kind of in a close to the depots and mob in Tel Aviv in garden and do it so I would say.
It's more the inflationary impact rather than the kind of mix impact.
This is afflicting DSP, so that's more on the hotel side.
The second question, if you can just repeat that.
Kevin.
Okay.
But I'm going to keep being too late.
What is it called out the kind of tapping into a lot of the on demand segment.
Carloading anybody David.
Okay.
<unk> channels.
Neil.
Demand segments to tap into one is the corporate segment, which is being catered to body <unk> platform called a small cap rates in <unk> by large corporate.
Second one is being bad.
The Queen chasing that clog that they signed up and are looking at that kind of an expanding and the code is being.
Small travel agent kind of internet voting tapping too along with kind of poverty a lot of the affiliate candidates. So looking at all of these channels together.
Recently, there have been multiple cost on the on the on the on the retail customer or it's kind of like an abundant already in books on the on the Apple platforms. These new demand segments that tap into.
The non retail kind of.
Platform. These big leaves you kind of you know keep increasing in the mix and these were accounting close to about 7% last year. We believe we can kind of you know, possibly look at doubling the entire mix.
Mix coming in from these new demand signals.
Got it.
Thanks, Mike I'll, just jump back into queue.
Perfect.
Thank you Richard the next question is from the line of I'm. All the sites are more you can NEMA. Please ask your question now.
Yes.
Ammonia lateral on mute yourself and ask questions.
While our mall comes back we will take the next question, which is from but of Morgan Stanley . Please ask your question now.
Am I audible, yes, yes. Please go ahead, yes, hi, congratulations on great performance in this quarter. So a couple of questions. Firstly on AD advertising and sales promotion Mohit you have always intended to go back to 6% to 7% while <unk> has.
I know for remain much lower than that despite cross booking improving quite a bit so how should one think about this number.
Number going forward has there been any material change in the competitive intensity, which kind of changes your view.
Second related question is you had made remarks on investment. So how do you think about balancing those investments and operating leverage benefit you earlier had.
Given an outlook of our EBIT margins closer to 5% of gross bookings does that change after what you have done one cool.
No.
I can take both of these.
On the on the first one which is on customer acquisition costs.
I called out during the quarter or did it largely trended at similar levels to the previous fiscal year right about five 1%.
We've been calling out that we do expect the musical kind have been only slightly go up in this.
Will be linked to a couple of things one it will be linked to the.
Overall business mix getting restored to pre pandemic levels.
<unk> used to contribute almost like 50% plus of the mix right now what else is it still in the body.
Generally the recovery pattern, we have seen.
Air lease is there kind of a recovery.
And the other segments kind of tend to lag a little bit.
Mixing into the stores over the next few quarters I think we could possibly here just kind of.
Speaking because the the amount of kind of.
Cause somebody who didn't cause that we incurred on the hotel side.
Slightly ahead.
In line with the larger margins that we've been making those businesses. The second point is you know.
They are also kind of not getting into any significant.
Brian kind of expenditures.
Which are more longer term in nature, keeping in mind that we're still not kind of.
Crosby, a pre pandemic and all kind of volumes and once you kind of you know.
Getting beyond our pre pandemic volumes I think the MBA.
There will be a requirement to kind of you know.
If we start on the on the brand expenses and therefore these two factors keeping in mind as they will get called out we could see a little bit of increase coming and indeed.
And the and the marketing turned up and of course, but the good part is we should also see would be improvement in the mix towards hotels. We should also see the blended margins going up marginally as Ben So some part of the increase in the promotional expenses will be offset from the improvement in margins as well.
Moving on to the second question on the investment let's say.
I think that the business now.
Formally kind of having.
Having established a kind of a property.
Profitability.
It'll be the costly what's kind of an old well in control.
Also the fact that the larger investment in terms of opening up.
The largest segment slightly eager to bring all the say for instance hotels.
That investment is already behind us now.
Don't see anything in a variety of demand signals, we can kind of be radios will probably longer term growth point of view and secondly that you can do a lot of interest income.
Travelling travel related services.
Again, Dan.
Both of these kind of.
Demand and supply side kind of you know.
In Kansas, we don't really need to and you're kind of investing in a big way. So the size and scale of investment is going to be much lower compared to the kind of investment that we have been doing she brings into over the last four five years in the hotel business. So I think a large part of these investments practical will keep going.
There'll be no operating cash corporate division that needs to be on our.
Quarter to quarter basis.
Keeping that in mind is the envy of kind of 18 months given all the.
Broader guidance that we do believe we should be able to see overall EBITDA getting to kind of close to about.
The 1% levels of those bookings.
And again, we kind of.
This is a good if we can establish that kind of profitability and then we'll aggressively look at scalable appointed.
And maybe maybe I can just add just one more point on the marketing spend.
I think that's an important one entity.
Interesting to sort of call out that is.
Well see we have also seen the organic traffic growth in the last quarter. It has been.
Very robust these marketing spend levels.
And that's how we're sort of evaluating it.
And then on the marketing spend on on just Keith just looking at what their traffic trends so quarter on quarter.
Traffic growth on these things.
And in large part of our traffic is organically as we had mentioned it earlier as well.
It was about 40%, so which was very very robust quarter on quarter.
And just keeping that in mind.
And also the fact that I'm just the overall like I called out earlier as well.
Our CRO headwind on high fares.
Sort of look at that and look into organic traffic growth that is already happening.
We ended up sort of balancing out overall marketing spend which is which is what we ended up doing and the support the quarter.
Great. Thanks for the detailed responses just a follow up Mohit, you said, 1% offer.
Gross booking is it for EBITDA or is it for just any big number just wanted to clarify that.
Yeah, I mean directionally.
EBITDA I mean, although the.
Victor EBITDA, and GAAP and arguably large going forward.
Usually around $3 billion per quarter.
So that's been arguably material going forward, but more in terms of EBITDA. Okay. Secondly.
Sure Secondly, just wanted to get sense on that cash balance came down quarter on quarter, So what's kind of a.
Going on there at least you would have gone up with the strong positive or just had a big number.
Thirdly, a question for Rajiv on the market share. If you had shared I kind of missed stacked on the airline domestic air segment, what is the market share.
This quarter compare to what you shared last quarter.
And lastly, a data point just a bookkeeping question how should one look at the UAE bookings right is this a part of the overall booking number on the respective segment for us.
And how big is that.
E quantification there if possible. Thank you.
Sure.
In terms of cash balance.
Actually a large part of the increase that could have otherwise come true.
It's kind of you know getting impacted because of the translation kind of dilemma.
The deal with the with the rupee weakening so the balances that we have in India.
Andy kind of into the payables intercompany payable.
So some of it.
To kind of get them overseas.
Companies in the group that is what is kind of creating a translation issue and a drop in the cash balance and this is more than I was thinking about that one because that's what the royalty payments are due anytime soon so therefore this is more temporary.
All of our drop coming in because of the change in exchange rate the dollar exchange rate.
Significantly during the quarter.
So I'm, hoping to kind of integrate course corrected over the next few quarters.
Moving onto the market share game right.
You may remember around the 30% Mark.
We had called out.
We kind of automotive in terms of making sure that we are able to retain a strong market share in the in the in the air segment.
Not necessarily looking at body.
Significant gains in the markets on a year on year.
Yes.
The AWP side, it could be a very different approach than some.
The underpenetrated segments like alternative accommodation.
But is there anything that fits all.
Looking at significant market share gains and the and the growth is kind of far outpacing the growth not just in the market, but also in the online market.
Lastly on your question on <unk> again.
Like I said this is bill again Mora and according to the and I just didn't market, where we believe we have a reasonable kind of a brand.
And therefore, the approaches to kind of you can do.
You know what kind of.
Gradual slow investment kind of build up rather than a big Bang.
In our market entry and therefore, they're kind of looking at this being a part of our respective segment reporting.
So you'll see those numbers kind of coming in as part of their respective segments.
And therefore, the decline ticketing segments also kind of you know.
I kind of combined the overall.
All right.
Operating metrics being shared.
Excuse me.
Thank you I'll get back in the queue for further questions. Thank you for listening.
And kick off the next question is from the line of Gucci seats.
Please ask your question now.
Hi, My question was on the hotel segment and just wanted to understand as part of the overall.
Market what is the current market share.
And then we have enough with every segment and specifically easy and if I know that segment didn't do magic. It well what is the market share data and how are we looking to gain a shadow over there, especially given.
So most of them material competitors in the budget segment.
Oh, maybe scaling back their marketing efforts.
And maybe I can take that Ritchie.
I think it'll be suffice to say.
I guess in line with previous.
Previous quarters' comments as well that we do have a leading market share in the online market the cros.
Our hotel segment.
Quantifying that is very very hard given the fragmented nature of the market, especially now.
As we called out to be our focus also increasingly.
To build the supply on the alternative accommodation side as well as longer than it is home stays on the apartments or the.
The lines on the hospitals now if you start looking at all this is even more fragmented.
Nature of the supply it becomes very hard to be able to sort of overall quantify it but we do know.
It's sort of.
The data that we sort of estimate and collect from the supply side with our partner donuts versus various discussions and conversations et cetera that our wallet share across our segments has only been improving.
Okay.
Okay. Thank you.
And <unk>. The next question is from the line of Midlands, Tony of DC ventures mezzanine, a ddos professional.
Hello.
Yes, Anthony Please go ahead.
Congratulations on the good numbers.
So couple of questions.
Dale.
Okay.
So wanted to understand.
I forgot.
Okay.
Okay.
Okay.
What we have today.
Our nation.
Sure.
Totally.
Okay.
Next slide.
Oh absolutely.
Okay.
Okay.
They are also pushing.
Okay.
How do you see.
Our.
Ooh.
Ooh.
Cool.
Right.
By comparison on the backlog.
How does it change.
Yeah.
Now with <unk>. Your line was really the LIBOR, but I think I botched. Your question. So let me just make an attempt to respond to that.
The various segments to how has that mix changed in this quarter between the premium segments in the mid segment of the budget segment as they were just sort of mentioning in response to the earlier question.
What we have witnessed.
During the Covid as the recovery was happening in between offer we won and we have two and after that for the last couple of quarters now.
The COVID-19 restrictions are lifted and business is coming back to normal, but we have seen is that oh.
I'd actually call it share in which is sort of a defined more as what percentage of bookings that we end up doing is part of the different sort of segment of hotels.
At our defined occupancy level.
Has only improved across the segments now it is not necessarily only in the premium segment and not necessarily on a mid segment, our independent hotels as well as the budget segment as <unk> mentioned earlier, and we've reported that out earlier as well the budget segment growth was or the recovery it otherwise.
Again behind that also is as we have seen in April May June quarter. That's also come back nicely in <unk> and <unk> and hopefully the momentum will continue going forward as well.
So I guess net net I would say.
Mix hasn't really changed significantly.
Now coming to the direct to Codell supplier bookings on the merits and the others will try.
To push the attic bookings on their platform.
This has been the phenomenon of our.
<unk>.
Global phenomena into some to some extent even in India.
But.
From the way, we have seen our numbers sort of growing as an intermediary.
Like literally quarter on quarter over the years.
I think both the platforms have their own sort of independent role to play there.
There is a set of value that we bring in for their customers.
Early in the formal selection choice and convenience.
And hopefully the best pricing.
And.
Just from a <unk>.
<unk> loyalty standpoint.
Every hotel chain global chain will have their own loyalty program as well to attract the customer to customers directly on their platform.
Haven't really over the years seen.
The SKU moving towards a given the fact that the customers in the sort of doing selection, where they want to see especially in a market like India compared with many other hotels before the sort of made their decision to book.
We have seen our platform growing.
Much much faster than what our understanding is on.
The supplier direct growth.
<unk>.
During the difficult times, we have seen.
The Chino hotels in fact.
Across the board working lot more closely lot more deeply.
With us in terms of just.
Sort of leveraging the traffic that we get on our platform, which is which is huge.
And to get the benefit of them and doing all those promotions et cetera on our platform rather than.
Sort of doing their own on their own platform, so and from a priority standpoint, we end up getting.
Hum.
Parity to their platform as well so.
I am not necessarily concerned about.
That's a given and largely on the back of the value proposition that we bring it to the to our partners.
I guess these were your two questions right with them.
Onto this in all of the same point.
Yes.
<unk>.
In my recent experiences.
Doing the research on <unk>.
<unk> product what I've observed is that during this period when there was a lot of demand a lot of these hotels.
Single or the good properties in each of the locations they were not.
Giving enough room, just what I understood.
They were almost they will say, okay not enough rooms on our platform maybe they were directly selling is that something like a <unk>.
They were all they were selling through the.
Channels is this something more worrisome in the medium to long term success.
Yeah, no and it could be a fair observation and I don't really remember.
No more details maybe we can take it offline to just more understanding of what period did you actually observe that.
But because our model is is the allocation model and we get inventory allocation, we havent really seen any such examples where we were short of supply on on them from any particular retail order on the partners would have come back and said that we don't want to give you in fact the way. It works is that as we sell we keep getting there in the room.
<unk> sort of replenish to automatically we don't really need to Oh, there is no manual process and Maurizio and we didn't see we didn't see any sold out you know what.
What might have happened, having said all of this and so as a trend we don't see any any of that but what might have happened sometimes what happens is when a peak.
Destination during diligence.
Heavy holiday season.
Period, and very short period.
Don't have in our country to many.
Sort of long periods like that they're in a particular hyper location.
The market would be genuinely sorted out.
The market will be generally its rollout across sandwich.
And if I may just add one more point, we'd now not only have we all see on platforms online platforms. We also have our <unk> pumps platform.
Called my partner.
And so and we've got the corporate platform. So from a partner standpoint that there are more than one platform that they can actually offload their inventory and get different different demand segments. So.
I don't think.
And there may be some anecdote that you might have observed but as a trend I don't see any of that.
So just coming in we just finished this point, where EPA style. We keep doing is internally compared with <unk> <unk> been booking dot com as a competitor to see how our teams how pricing how does it compare to Google.
No one.
Yes.
No I understand that I mean, we do that as well.
My second question is you know.
As in Europe .
Initial accommodation on booking platform is quite a bit.
Business for them.
How do we feedback for us over the next three to five years, you have already said, but if you can give some more color as to what could be the proposed what can be the proportion of that for us.
Jonathan.
Absolutely.
Right and that is the reason why we started focusing on this segment now for the last several quarters and we've been and that's like 360 degree sort of focus we've been building supply have you been getting all the kind of alternative accommodations.
From Pan India.
And premium Super premium mid segment budget segment, and all of them whether it is to the classical home stays the cartridges are the apartments or the or the hospital or not.
And I would I could just tell you directionally from an opportunity standpoint, I think it's a big opportunity.
And it just.
Early days of evolution in India, but catching up really fast in terms of just the emerging trends in consumers mind.
And part of that was also in fact, ironically tanks to pandemic as well.
People, who are looking for say a secluded sort of.
<unk> stated that they wanted to get in.
But I can tell you on our platform.
We've been adding sort of accommodations.
Like hundreds every quarter on the truly and also on the on.
And in terms of bookings.
From our pre pandemic last year level.
We have already in this segment, we've done sort of 125% growth.
On that of course, it's a smaller base, it's not comparable to difficult base that we have but directionally. It is very very encouraging and last but not the least I will make the point that even on our platform given that you are quite familiar with our product.
You will notice that we actually have.
Dedicated funnel for this called home space, which is a switch and it will.
Give the customer experience spin.
Specific to two.
Does this sort of property types.
With the differentiated experience, it's a journey.
A few things that we've already done two features that we've already included and there are many many more that are waiting to come on that front.
Yeah.
And one last question if I can.
Now good discounts.
And.
He has come back a little bit.
Both in the hotel segment.
Primarily the aggressiveness. So should we say that this is now the new base because now we are almost dead in the market.
This legit or that is still the scope for the discounts as a promotion expenses to go up in the hotel segment.
Nathan I think I'd, just kind of answered that in one of the biggest questions.
Possibly from Vijay that which you indicated.
I think the answer remains the same on that.
Okay perfect. Thank you very much thank you.
Thanks, and kill metal. The next question is from the line of agitation the shakeout of UBS Securities.
Ask your question now.
Yeah, Hi, just a very quick question from my side. So when you look at adjusted margin percentage rate. So.
Ford added downtime around trying to find one last quarter to $6 nine hotels, it's down from $17 seven to 17.2 I understand this is because obviously the transaction sizes have increased a bit this quarter. How do we look at this number going ahead, because as long haul international kind of grows etc transaction basis, probably.
Are you going to increase further.
Is there some.
And of late.
Sorry, I didn't hear you kind of broke out.
But I think I got the okay.
No question you broke up in the last.
A few seconds, but I think if it's about delivering these tend to be on the existing margins.
Yeah, you're absolutely right. This is kind of largely kind of and are moving in tandem with.
With the change in the average selling prices.
If you look at on the intervention side also on margins and largely in line with the domestic market and then also unless there isn't any significant change in the ESP the overall kind of in them.
Take rates would put us in a luxury mid.
On similar lines, so don't expect too much of a change.
We don't have the fares come down is it.
Bechtel hopefully with some relief on the on the crude oil side, and therefore cannot be the impact passing through in terms of an idea.
Of course in Colombia overall kids that I believe we should we could possibly see an uptick in kind of an increase.
On the ticketing margins.
On the on the hotel side again.
There has been a.
Yeah.
Like I called out all but like 11%.
Quarter on quarter impact on pricing, which has come in.
Overall, we do believe will kind of remain in that broad range of 17% to 19%.
So I think so long as we are in that range.
This seems pretty much in line.
And in line with expectations.
Okay. Okay. Just a quick follow up maybe on the hotel side it used to be between eight or 22% or three equal lately.
That has kind of come down to the 17, 18%. So this is a sustainable number end up going ahead or how do you know.
2018, do it until the end of August .
Yeah.
And we had called out back then that we will gradually one to bring it down to about <unk>.
Into into the high teens, rather than being in the Twenty's because you don't want.
Take rates being in it.
Uh huh.
Nishu.
Allowing entry.
Other platforms that are going to make inroads with the suppliers and therefore this was a conscious attempt to kind of integrated into into the 17 to 19 range over the last few years and this is also happening in tandem with them a significant shift.
A shift in the promotional spend that we're doing in that category. So as you kind of in a renewal.
Quantum of promotional expense, but getting going we kind of pass on some part of that.
Back into the <unk>.
Margin relief through the suppliers as well because guess what the suppliers are now kind of pending.
A lot of these kinds of Baltimore.
Correct.
You can look at it in that context, so yeah pretty much happening on a on a on a.
In an organized manner.
Okay go ahead.
That's it from my side all the best.
Thank you. The next question is from the line of Santos and AV access capital and pushing it. Please ask your question now.
Thank you.
My personal driving the finance cost actually it has gone up a little this quarter.
So.
Can you tell me the reason for that and also.
On the in the site what is the outlook of the coffee because you'd had optimized employees tend to in FY 'twenty. One so we need to add back in place.
And the third question is about <unk> spending.
What exactly is the plan of the company regarding that.
The cash balance that's the company asked whether its plans to keep dividend on quoting.
And listening to the company. So these aren't as much ecosystem.
Yes, Charlie.
Big doors.
On the finance cost like add Carlo and our other significant impact.
This quarter has been the the translation impact of <unk>.
Uh huh.
<unk> balances into dollar because we can vary significantly so there's almost a 11 and a half million kind of a forex.
These statement of liabilities, which is sitting in the finance costs and that's the reason that you see the the overall finance cost.
At a high up about $60 million. So it's more of a one off project quarter, because there'll be significant.
Beginning of the rupee.
And again these are largely intercompany kind of in a period and therefore not have realized kind of cost more like a translation college.
So that is one part of it on the employee side like we had called out.
Uh huh.
The only.
Cleanest, where we've kind of done a little bit of a pruning on the on the overall employee numbers was on our offline channels, we used to have close to about.
<unk> stores across the country, and we were already kind of in a minute.
Program delivered trying to kind of convert many of them.
And two franchisee stores and also onboard new franchisee stores. So that's.
As part of that affordable accelerated when we kind of you know when the Covid pandemic hit us and therefore quite a few of these stores are actually now turned into print JV stores for us.
So they have not gone all of the system completely but yes.
They are no longer kind of going to be folks over there are no longer on the on the payroll of the employee, but I kind of working on a franchise model. So that it was predominantly b b kind of.
Changing the employee kind of so.
We have done to the pandemic.
Looking at any kind of significant changes to the employee strength.
Could have possibly marginal kind of you know.
Including head count as the volume picks up but nothing nothing in large numbers.
Lastly on the cash balances.
Fair enough.
Good cash balance.
And also if you are kind of in our Canadian cash like a cornered in every quarter.
Continue to kind of.
Remain in these quoting more economy.
Sprint opportunities.
And we've already called out a few in the last few quarters.
And we'll keep kind of remain open to that.
More real kind of and our plans are.
That's around any any dividend payouts.
Thanks that was helpful.
Andre can handle.
<unk>. The next question is from the line up for Bryan Bank of Maxim Asset management, Brian You May. Please ask your question now.
Hi, good morning.
Jason Yes, we can hear you. Please go ahead.
Hi, Thank you very much beneficial conversion is strong results I have two questions.
First one is on aggregate economics again nikes clarify how does this look.
<unk> margin percentage on a transaction basis and the second one is on domestic accommodation supply, especially as it relates to hotels could I. Please ask one at a time to grow domestic hotel supply and why Hampton above domestic accommodations distraction.
Thank you.
Yes, sure I can take the first one.
On the economic side like I had mentioned.
The changes are largely because our take rates are largely flat.
And therefore, SBA speak I end up going on all the selling price increases optically.
Pickering percentage goes down or the margin percentage goes down so that's to address your point, whether you know this is why we did it.
The increase in this and a great year to date it is likely coming in from there.
On the second point.
I think clearly to the pandemic. There is there are there has been some amount of disruption and dependable.
<unk> seen most of the golf selling kind of you know hotel doesn't all kind of come back on the platform and we continue to kind of increase.
Uh huh.
More and more particularly on the project side and also on the alternative accommodation side.
Yeah, and if I may just add Brian .
On top of what Mohit said in on the hotel supply there are absolutely no plans on slowing down on that.
You know I don't know, which number you are looking at pre pandemic, but not.
Like I was just sharing it earlier.
Today, our real Pan India City level coverage has gone up from 1600 cities to actually 1900 cities.
So we do have more additional coverage of proper.
Property is coming in from all kinds of properties, including hotels coming in from 300 more cities and like with was pointing out.
It was during the pandemic.
Lee fatality sector went through a huge amount of disruption and it will slowly and gradually sort of coming back some of the properties that youre nonfunctional last quarter, they became operational and functional.
And as it gets to the steady state, which is now increasingly getting to where our momentum and further pick up on the supply side. So there is absolutely no slowdown on adding more more and more supply on our platform.
Okay. That's good to hear thank you Mohit.
Have a good evening.
Thank you. Thank you. Thank you Brian will take the last question now from the line of help it not because of Allianz Global Athena. Please ask your question now.
Hello, Hi, congratulations on a good set of numbers and thanks for taking my question. So my first question, which I'm sorry, I might have missed this answer but so this margins on the air ticketing has come off 100 bps Q O Q right. So this explain 1% gain.
Number where do you see that settling.
Given.
Given the pricing trends in the AD market, so the 6% and margins do you see your tight linkage CUSIP.
<unk>.
Yes, so maybe I can kind of you know Ah repeat advanced mall.
Okay.
Jim This is really.
<unk> margin can be on the air ticketing side are largely flat in nature. They are not necessarily a percentage of the overall <unk>.
Right.
And therefore in a higher fare regime, the optically the margin percentage kind of you know looks.
Look slower.
And then low fare redeem optically the the margins kind of going to look a lot more robust or not.
So that's the reason for this change Directionally, we've been calling out that we do believe that the margins kind of you know.
Sure they stabilize and be in the 6% to 7%.
Right.
So just a follow up is it possible to share any kind of.
What is it like.
But every booking you get like 30, 40 bucks or something like that is that how it works and how is it negotiated with the airline.
So actually it can be.
Even the margin has kind of you know multiple.
Our revenue streams coming in which will include what we gave as commissions or incentives whether it is a kind of vendors are reevaluating that based on the airlines. It could include the.
The service convenience Peter Levy.
Customers could also include.
The CV that we might receive from our GDS partner.
Solution partners.
Multiple kind of you know extremes, there kind of going to make up for these what I'm, saying is mostly lightly.
Flat inbound, particularly kind of how.
One is that we make and.
And therefore the percentage varies.
In keeping with the overall theology.
Okay.
Thanks, Mike and 111 more question from my side, so on the margins right. So this quarter you were at about 1%.
EBIT margin adjusted EBIT margins on a gross bookings basis, right and Youre guiding going forward also potentially 1% at the EBITDA level right. So.
Just to understand if.
So if you see our marketing expenses going up a 100 100 bps, so say, 6% to 7% from the state lease level. So then another 100 hundred 50 bps increase in marketing expenses.
Which cost items.
On the mix side.
Can you offset it by and is it possible to give some kind of margin book that you can offset these this 100% marketing 300 bits and pieces of marketing.
Yes, it does.
We've been always saying that pioneer currently.
In this quarter I think we've been actually been able to kind of be okay to close about one percentage point of growth.
It might kind of vary slightly going forward, depending upon how the recovery pattern kind of into shape out.
As the as you kind of you know bill year on we would also want to kind of restart some of the investments that we typically do on the brand side, that's where the brand campaigns. Those are more like in a slightly longer term impact expenses are going to incur but you had been awaiting for the last I would say two years until the pandemic right.
And this is something that will kind of possibly we started incurring as we get to kind of going back to pre pandemic levels.
A recovering or even kind of growing from there.
I didn't think they kind of looking at it.
Offsetting this from any idea that's called claims although one of them.
Part of it we can get our fingers on the fact that as we build the growth here onwards, our mix really start improving on the hotel side and hotels.
Better margin structure.
It would mean that the blended margins could also be slightly improved and that will partially offset.
The increase coming in from the brand experience.
Thanks, Thanks, a lot.
Okay.
No it's good.
<unk>.
Almost out of time.
This brings us to the end of the call radish any closing remarks, and then we can political.
Thank you reply can do good all good set of questions. So thank you everyone. Thank you for your patience. Thank you for your time.
Thank you everyone bye. Thank you everyone. You may please disconnect. Thank you.