MakeMyTrip Limited Q4 2023 Earnings Call
Speaker 1: with new platforms like MyBiz, MyPartner, to cater to B2B corporate and B2B2C demand segments respectively. Our platform mindset in building our tech stack has helped us launch all these new offerings over the last few years with amazing efficiency and agility.
These investments will help us drive future growth and profitability.
Besides building new platforms and launching Mikmatrip.ae, which is our GCC platform, we have now built almost fully automated, fully self-serve model of our post-sales interface. As a result, we now offer the best in industry, over sales capability, and more.
across our entire line of businesses, thus improving customer experience for post sales use cases.
Our data science and engineering capabilities have enabled us to deliver delightful, personalized, and contextualized experience to our customers.
to our customers. Leveraging these capabilities with insights-driven mindset enabled us to launch several industry-first features for our consumers. Most of our new offerings are backed by rich data science capabilities, which we employ cutting-edge AI ML models.
to bring value added differentiated features.
Consumer-focused products like zero cancellation, fair lock, trip guarantee, portal ranking, etc. and supplier-focused products like RevMax, a paid yield management tool for bus operators, demonstrate our superior capabilities in data sciences, AI and ML.
A key part of our growth strategy to drive digital penetration of travel services deeper into the country beyond tier 1 and tier 2 cities. We recently collaborated with Microsoft to make travel planning more inclusive and accessible by introducing voice assisted booking in Indian languages.
the new conversational flow powered by Microsoft Azure AI and cognitive services will converse with the user.
to offer personalized travel recommendations based on their preferences, curate holiday packages based on variable inputs like occasion, budget, activity preferences, time of travel, and eventually help book these holiday packages.
Similarly, it could help book flight tickets with a few simple conversational steps, including payment. This can drive adoption of online travel ecosystem for almost every strata and demography across the country. Currently, the beta version of this integration has been introduced in Hindi and English for flights and holiday customers.
Apart from tech capabilities, one of our biggest strengths is the brand, is the brands that we have created over the years. All three of our brands have the highest top of mind recall when it comes to travel services with a cumulative transacted consumer base of over 64 million users.
Our engagement metrics and repeat rates are comparable with the global benchmarks, which is testimony of trust in our brands. As for business segments now, starting with Air Business, recovery momentum in aviation sector continued during the quarter despite the low leisure season quarter.
There was an uptick in both domestic and international air traffic, especially in the month of March. We've been growing faster than the market on the back of our innovative product and brand strength. Also, for two quarters in a row, our domestic flown passenger traffic is above pre-pandemic levels.
International air bookings have seen an expectedly slow recovery throughout the year. The recovery is now in the 90s and we expect to get back to pre-pandemic volumes in the near fiscal year. We continue to innovate product features. For instance, we not only scaled up our fair lock feature to cover 95% of domestic flights.
but also launched this feature for international itineraries with about 95% coverage. While according to Center of Aviation,
Next year outlook for Indian domestic aviation sector is quite positive with a projected growth of about 20 percent year on year. Recently, Gopher Airlines having a small market share of about 6 percent filed for voluntary insolvency resolution proceedings.
before the National Company Law Tribunal, NCLT, in India, seeking interim relief, citing failure of the global engine supplier to replace the faulty engines from time to time, resulting to grounding of half of their fleet and consequent,
operational and financial issues.
Internal relief was granted by NCLT and the airline is making all possible efforts to resume the operations.
In the short term, this event has affected the supply, although we expect it to be temporary, as the other airlines in the market have started to fill the supply gap with additional deployment of planes on key routes.
Our accommodation business, which includes hotels, packages and homestay segments, continues to shape up well. Leisure travel has gone beyond pre-pandemic levels and corporate travel has recovered strongly on the back of conferences, exhibitions and events. And our continuous focus on supply expansion.
We have surpassed our pre-COVID supply with more than 71,000 sellable accommodations listed on our platform.
This has helped us increase our market share and further strengthen our supply mode.
With international outbound travel picking up, we have now started to expand our direct contracting for destinations where Indian tourists travel frequently. Vietnam is one.
such example of a new emerging destination, where we are now building inventory through direct supply contracts to deliver better value to our customers.
Bross Booking for accommodation business has surpassed the pre-pandemic levels on the back of strong growth in premium and medium mid-premium category of hotels. Our endeavor has been to build a platform that is innovative, intuitive, simple and delivers the best value to the customer.
During this quarter, we launched Book at Zero, which is an industry first initiative where customers can now reserve their preferred property without worrying about upfront payments and pay closer to the travel date.
The solving for any anxiety related to uncertain travel plans and offering huge flexibility to the customers.
This feature is now available.
for all properties across India and outside India. This is helping us change the consumer behavior to book in advance which will help better yield management for our partners.
We continue to scale our homestays business with leisure destinations contributing to multiple things.
To discover and promote properties at drivable distance, we launched hidden gems. This feature has been built on interactive maps to improve the discoverability. To make decision making informed and seamless for homestays, we introduced some other features showcasing information related to food and dining at the property.
Our holiday packages business has also continued to scale up and has already surpassed the pandemic levels.
Coming to our bus ticketing business continues to deliver strong results. We are now starting to see some buoyancy in the supply ecosystem with multiple large operators confirming new fleet orders to OREMs.
An addition of new EV intercity buses by newer players.
A few large bus operators who had paused or shrunk their operations post the COVID lockdown have restarted during the quarter with an effort to get the full fleet back on the roads.
with favorable macro environment like new expressways and highway expansion. Demand growth due to more in-office working, especially in IT companies, in the South India and easing of the supply constraints in motor vehicle production. We expect capacity expansion in intercity buses during this financial year.
Product-related initiatives continue to focus on driving online penetration for the category and enhancing customer experience. The Regional Transport Corporation bus booking experience has been further improved and customized to each RTC. This has improved the conversion rates for RTC bookings, leading to an increase in the rate of new customer acquisition.
Further, in non-traditional bus markets like Central and East India, we have added significant inventory to drive the penetration.
We intend to double down on these efforts to make Red Bus truly pan-national with meaningful business contributions coming from every region in the country.
International markets are maintaining their growth momentum and now contribute upwards of 10% of our overall bus revenue.
Our other ground transport services such as intercity cabs, rail tickets, etc. continue to scale well. This segment is helping us acquire new users of the platform. We are investing in this business as we foresee an opportunity to disrupt this segment through technology interventions, innovating offerings and supply consolidation.
We opened our Crip Guarantee offering for users who haven't booked their train ticket from MMT platform to further expand our reach to real users.
Our MyPartner B2B2C platform, where we offer both flight and accommodation booking, is gaining positive traction from our affiliate partners.
Engagement levels from existing partners are improving as we continue to ramp up onboarding new partners every quarter.
Business travel is gradually normalizing and we continue to add more capabilities on our both MyBiz and Q2T platforms. We recently completed end-to-end integration flow with Darwin Box giving complete solutions to the corporates from travel request to expense management. Our event portal of Q2T has now gone live.
And our MyBiz platform is now ranked as second best travel management software globally. And first for small business segments SME by G2, which is a global peer-to-peer review platform.
With the scaling up of our corporate and B2B2C platforms, we are now able to target all customer demand segments directly and more effectively.
With this, let me now hand over the call to Mohit for financial highlights of the quarter.
Thank you, Ramesh. And hello, everyone.
We are pleased to report another strong quarter both in terms of business growth and profitability.
As mentioned by Rajesh, despite the few macroeconomic headbands, demand for travel continues to be resilient and robust.
We are seeing an improved trend across all our segments and we believe fiscal year 2024 will be the year of growth over pre-pandemic levels.
Through the pandemic-interacted years, we have been investing in the areas of future growth and this should strengthen our moods and help us stay ahead of the market.
During reported quarter four of fiscal year 23, gross bookings came in at about $1.7 billion, witnessing a growth of over 80% year on year in constant currency terms on the back of strong travel demand. It just an operating profit or it just a bit.
was about $19 million as compared to about $12 million during the same quarter last year, an improvement of over 58% year on year.
Through the last few years, our strategic focus has been towards driving profitable growth and we are pleased with the results delivered through FY23. While Rajesh has called out that we have achieved our highest annual gross bookings and adjusted operating profit in fiscal year 23, I'd like to add that we have now been consistently EBITDA positive on a GAAP basis for the last 5 quarters in a row.
During fiscal year 23, we delivered a gap of $51 million with a margin of 8.6% as compared to an EBITDA loss of just below $1 million in the previous fiscal year. During the last couple of years, we have made efforts to optimize our cost structure and not see any floral growth in status. We are currently maintain a clear comfortable cost of screwing up our game plan.
And from here on there will be gradual improvements in profitability on the back of operating leverage as we build scale. Our A-ticketing gross bookings for the quarter stood at $1.1 billion, witnessing a growth of 84.9% year on year on constant currency terms.
A ticketing segment grew by 10.3% sequentially, despite weak seasonality on the back of strong growth in air traffic.
It stood at about $74.3 million, raising a growth of 81% year on year on a constant currency basis. So, that's the end of the session. Thank you very much.
Garage Bookings for the Quarter for Hotels and Packages segment.
came in at $388.6 million, witnessing a strong growth of over 78% year on year in constant currency terms in line with demand trends. And just a margin for our hoodles and packages business is to add $65.5 million during the quarter, witnessing a growth of over 64% year on year.
in constant currency terms. In our bus ticketing business, gross bookings for the quarter were at $213.5 million, growing at over 66% year on year on constant currency basis. Adjusted margin, it stood at about $19.3 million. They string a strong year on year growth.
of about 70% in constant currency terms. The take rates or margins for all these three reported segments, that is, a-ticketing, hotels and packages, and bus ticketing continue to be in line with the previous quarter.
The adjusted margin for the other businesses in the reported quarter of Q4 came in at about $9 million, witnessing a growth of over 73% year on year in constant currency terms. Operating leverage built over the years is now clearly visible and we continue to be efficient with our marketing and customer acquisition related spends. Our overall marketing and sales promotion expense for the quarter.
came in at about 5% of gross bookings as compared to 5.2% in the previous quarter. Most of the other expenses continue to be in line with the previous quarter.
At the end of this quarter, cash and cash equivalents were about $487 million as compared to $449 million at the end of the previous quarter. That's an addition of about $38 million during the quarter. The cash addition was stronger than the profitability linked to cash-BN calm was 1 in 15 states, and another 20 states and businesses ended up with owner
cash generation due to working capital releases in a seasonally weaker quarter. Our balance sheet strength gives us the flexibility to invest and pursue new growth opportunities both organically and inorganically. And lastly, in the recent past, there have been some media reports about our
India IPO plans. I would like to take this opportunity to share our view on the matter. We are an Indian company with a strong India brand and a predominantly India business. So while there could be valid reasons or arguments for us to list in India, we currently have no plans to pursue this thought.
at this stage given the strong cast pressure on our balance sheet.
With that, I'd like to turn the call to Vipul for Q&A. Thanks, Mahath. Any participants who wish to ask a question can please click on the raise hand and we will take the questions one by one. We will just wait for a minute for the question queue to assemble.
The first question is from the line of Manish Aluki of Goldman Sachs. Manish, your line has been unmuted. You can ask your question.
Great, thanks Vipul. Hi team, thanks for taking my question. So my first question is on the hotels business. Now while you did call out that recovery has generally been strong across all travel segments and within hotels you said that premium hotels are tracking above pre-COVID levels.
But when I look at your overall reported hotels revenue or volumes, they are still tracking reasonably meaningfully below pre-COVID level. Just trying to understand that from a mixed standpoint, how weak is the budget segment still to drive the overall hotel revenues and volume for Make My Trip to be?
that much below pre-COVID level and there what's your outlook in terms of demand recovery with an ex-exual 12 months, that will be my first question please.
It used to be, you know, budget segment used to contribute close to what, you know, meet 40s in terms of the overall makes. Like I had mentioned, you know, currently we are seeing, you know, the budget segment contributing close to what a third of our overall kind of bookings. So, clearly there is a, you know, there's this, this, this kind of lag in recovery in the budget segment. And we do expect that it would probably take another six to 12 months.
you know for the mix to get restored or get closer to the pre-pandemic levels.
Thanks, Moisa, for all of the, I mean this demand, weakness in the budget segment. Is it also a function of higher ASPs or meaningfully higher ASPs in that category versus what it used to be in the past? Absolutely, absolutely. Very, very relevant and important to bring that out.
you know the the SPs particularly in this segment and you know this segment being a lot more price sensitive you know the impact on volume recovery has been higher because as we noticed you know the historically pre-pandemic you know there used to be a lot of you know significant promotions deep discounting that used to happen from multiple players
in this particular segment, which pretty much has kind of gone away. And therefore the pricing impact in this segment has been sharper compared to the other segments, other price points. And therefore the recovery has been lagging a bit. And like I said, it's a segment which is even more price sensitive than the others.
And that's one of the key reasons for the delayed recovery on this one.
And thanks Mohit and should we assume that the take-it that you've reported now is about 16.3% that should be the new normalized take-it or are you seeing some headroom for that number to move upwards let's say in the course of next year quarter.
Pretty much normalized except for the fact that you know like I was mentioning that you know if the budget segment mix kind of you know comes back to pre-pandemic levels there will be marginal scope for improvement over here. Understood. My next question is on the air business. Now there of course the volume numbers that you reported have been quite strong but what we also notice in the reported financials is that the promotion spend that you report against the air segment.
is clearly kind of linked to competitive intensity. But the other part is also linked to the fact that through the pandemic, the airlines have been kind of promoting the volume build up on the on the air-decreasing side and therefore you see that the recovery is much stronger over there. It's a little bit of a
grossing effect. So you would see the take rate kind of staying strong and firm through the last couple years. And also the promotional spending slightly higher compared to pre-pandemic levels. So it's largely a combination of both of these factors.
Thank you. Just one last quick question. So margins obviously have remained very strong. Cash and Bidda margins now well in double digits. So from here on, again, margins, should we expect them to be range bound? Are you looking to reinvest, let's say, margins into growth or should margins be expanding from here on as the monitor covers further?
See, you know, this year has seen very strong kind of, you know, growth over the previous fiscal year, right, because last year was kind of impacted to some extent by the by the pandemic. And therefore, the margin expansion has also been, you know, significantly higher this year. Going forward, we would expect margin expansion to continue a bit on a smaller measure.
But we do expect some small margin expansion to continue. Thank you so much for answering all my questions. All the best.
Thanks Manish. Thanks Manish. The next question is from the line of Gaurav Daddi of Morgan Stanley . Gaurav you can ask your question now.
Hi, am I Audible? Yes please. Go ahead.
Hi, congrats on good performance. Couple of questions. The first one is related to the specific event that happened in the airline industry in India. What's our exposure with respect to any balance sheet advances?
that could be potentially at risk and secondly how should that play out
with respect to impact on the overall volume growth for the industry in the next 3 to 6 months? In terms of the industry event, as far as GoFirst is concerned, I guess you would have kind of picked up. NCLT has actually appointed an interim resolution personnel and he has been tasked of kind of you know.
getting the airline back to running on an ongoing basis, you know, with the going concern concept. And therefore we believe there's really no risk in terms of, you know, our login balances, you know, with the airlines, because as soon as, you know, the air ticketing, you know, kind of window opens again, these will get utilized very quickly.
So I think it's more a matter of time don't really see as an event exposure over there right now. In terms of the impact on industry, go first like Rajesh had called on used to be about 6-7% of the overall market, but the impact on the market is unlikely to be that large it's going to be much more smaller.
because most of the other airlines are kind of, you know, pressing in, you know, more kind of flights. And, you know, particularly on the key routes where they used to operate, and therefore the overall impact on the industry is going to be much lesser than their than the market share that they used to have, you know, before they kind of, you know, closed operations. Rajesh, you would like to add anything? Yeah, no, I'd be happy to add what you said more. So go to.
So I think there will be obviously temporary sort of demand supply gap and then that could potentially Have an impact on fares as we recently saw as well But as soon as we have the more supply coming from the other airlines and the gap gets bridged and hopefully also So, you know as we are heading in the next couple of weeks if Goya is back in the skies
then that should ease out the situation as well. Alright. Second question, just a data point on market share that you used to share always on the domestic air segment how that has fared this quarter versus the last quarter.
Yeah, a little better only, Gaurav. I mean, you know, despite whatever might be happening in the market overall, you know, in this quarter was also I mean, here, we have been sort of in the range of 30 to 31%. So if last quarter was 30%, this time, it was 30.5% plus. So a little better than the last quarter.
And would it be possible to get a sense of where we stand on market share for international outbound segment? Actually, it's very hard Gaurav to get to the actual number because you domestic it's very easy because they're third party, you know, sort of source data available as you know from the DCA.
But for international, given that there is also inbound and there are a lot of international players and all, it's very hard to sort of get to the, and you know we use surrogate all the time. I don't think there has been any significant change in the market share for the international overall.
And the reason for that is simple. I mean, you know, as we sort of covered in our commentary, the overall international outgoing travel thanks to high fares may be mostly for long haul and some of the operational issues related to visa, et cetera, is still in recovery mode. I mean, it used to be, you know, squatter, if you would recall, was about 75%, we are getting into 90s now. And, you know, firstly, just get out of the...
recovery mode and get into a growth mode this year. And then hopefully, you know, there will be some shared gains as well.
Got it. Third question is with respect to the new channels that you talked about that you started over the last two to three years. Cumulatively, all these account for what percentage of the overall growth booking for us and is there any target from a next one to two year perspective. And last question from Mohit, like you've always given a sort of a rain.
on the on the spend side, I would say with kind of you know,
pretty much kind of look to remain within that range of 5 to 6%. Again, depending on multiple things, including competitive intensity, including kind of what kind of promotional expense coming particularly from the supplier side, etc. We believe we should continue to be in that same range of 5 to 6%.
and we should continue to see some amount of margin expansion also happening at the bottom line while maintaining this range of spend. So that is how I would look at it. Maybe there will be a more kind of a…
higher mix of kind of brand related spends going forward out of the entire customer acquisition cause. So that's probably the only small tweak that I see going forward. But no overall kind of shift in the range per se. Gaurav, you could just kind of point me back to the previous question before I go. Maybe I will take that point.
I can say this was about the new channel. So, the way we are looking at Gaurav in all fairness, the new channels is that the first couple of years is always onboarding, ramping up, scaling up, engaging, you know, either the corporates and acquiring corporates, or let's say onboarding travel agents for our MyPartner platform.
And you know, from all those metrics, they've been doing really, really well. Now, it's just a question of, you know, and of course, on our platform, we've been adding more capabilities in terms of product offerings and so on. And the end early signs of traction on, you know, engagement and as well as the transaction revenue.
on both sort of SME segment and the large corporates on my business, pretty robust. Now, given that they've just started and it's just a couple of years and we will wait to sort of get that to scale for us to be able to sort of give you any more color in terms of what their current contribution, more importantly.
you know, how are we sort of looking at it them contributing? See, right now our focus is very simple. The focus is that we want to just reach out from a reach standpoint to every possible demand segment. And with that intention and goal, you know, from a midterm and a long term goal standpoint, we made these investments.
And we're quite happy with the progress so far in terms of, you know, sort of all these key KPI that, you know, early part of the journey they become very, very relevant and they're doing really well. Let's just wait for some more time for us to be able to get to the actual numbers of in terms of business. How much is the contribution happening?
or it will be useful thanks a lot and all the best. Thank you, Varun.
Thanks, God of the next question is from the line of Mishra. Mishra, you may please ask a question now.
Hi, are you ready for me? Yes, yes we can. Thanks, thanks Pupul.
Rajesh, maybe a question for you. Just on ONDC, right, the Open Network for Digital Commerce, the scope and vision of the platform seems fairly broad. It could overlap with some of the categories that you play in. Could you just talk a little bit about how you're looking at it? What are the opportunities and risks to keep in mind? And, you know, it would be great if you could talk about it separately for air versus hotels, because maybe the consideration could be different.
Yeah, no, I think it's an interesting observation, Mihir, and you know, NDC has been in the news for, for a while now, and you know, maybe off late, a lot more in the public domain. And we've been actually watching the space very, very carefully, not only watching, we've been sort of, you know, off and on engaged with the UNDC.
management also just to continuously keep understanding from their point of view how they're looking at evolving their own platform. To be honest and you know and solving the public domain this news is that you know the categories that they have launched so far they're obviously waiting for that to sort of scale up you know I'm getting
for the first before, before they get to the actual travel and let's say flight bookings or a hotel bookings later and all that, because I think they could be also a realization that these are fairly complex products at some level, especially the hotel bookings or the, let's say international flight bookings for that matter, relatively domestic flights might be easier.
So at this point in time, it's basically waiting for us and just see how the other categories and all the seller side and the buyer side sort of operate and how do they solve for the overall post sales customer experience. They're from product commerce and point the delivery and all the related issues that come along.
for the long tail or sellers, a good platform, you know, that they can sort of pass participate in any commerce. Perhaps the answer is yes. You know, can this possibly scale this up to bring in more categories? We'll have to wait and see. And more from, you know, just solving the end to end sort of experience from because we do believe the travel.
is very experienced oriented and therefore, while it might look pretty simple on the front right from a bookingsand point, but it's fairly sort of complex when it comes to the post-sales experience as well. So I think at this stage, NetNet, I would say keep watching this stage carefully.
and see how it sort of evolves and then accordingly sort of plan your move on it. No appreciate it thanks a bunch here and Moith maybe one for you. Could you just talk about the current mix of international flights how much is it as a you know percent of the flights business and
as it normalizes would that be a tailwind for your margins in the in the air business?
It should definitely be a tail being, you know, particularly in terms of, you know, incremental contribution of growth coming in. And like Rajesh Koldau, you know, the recovery on the international side has been lacking. And also we see, you know, lot more kind of potential future growth in that particular, you know, segment of slides.
So just to kind of give a color in terms of pre-pandemic versus current mix, pre-pandemic internationally was contributing close to about 30 to 40 percent of the overall air ticketing margins and currently it is at about 25 percent. So clearly a lot of headroom over there we should be attainment for the coming years as that supply kind of improves and
Now, thank you for taking my questions. I had a few questions, but maybe the first one was just the industry structure itself, right? So obviously I've taught them more active. I've go first with issues. The specific question was with regards your blended commission or take rates and you all kind of different levels of engagement with the suppliers, whether it be GDS or direct. So can we help us understand what the current industry structure does?
for your blended commission or take rate? So, the industry has kind of been seeing consolidation over the years. So it's not a new phenomenon. And if you really look at the share of ending over the years, it's been kind of steadily increasing right. And keeping that in mind, we have been kind of guiding what we believe could be sustainable.
a ticketing rate and we kind of pretty much in that range right now. It's slightly more kind of contraction in the a ticketing margins could possibly be driven by, I would say, you know, lower kind of payment gateway costs or kind of lowering of payment gateway costs over the years.
as that happens, there is clearly a potential for some of the, you know, some more margin compression over here. But otherwise, we feel kind of in a reasonably kind of an stable, you know, margin kind of a phase. And this is, you know, actually more across segments, not just yet, you're getting.
across all the other segments as well, whether it is bussicketing, whether it is models and packages. We do believe Mars is largely remains stable. And notice the last question. It means that if Indico did take share, right? Incrementally.
I would have thought that that would be the duty of blended air take rate. Would that be a fair comment or not necessarily because you know in the manner that the you know the take rates are kind of in a built up in about the industry in India. At least for the O.T. industry. A large part of the take rates kind of in a coming as
as fees from the customer side and not necessarily as commissions from the airlines. In fact, commissions from most airlines, the upfront commissions have been down to zero for a fairly long period. So that hasn't really kind of, you know, changed the structure very significantly, yes. You know, if you would see probably like about eight, 10 years back, when it was predominantly a commission-led model, we've seen a change coming from that model to the current one, but over the last few years, it's been...
It's largely being stable on these lines. Thanks, Mark. The next one was just in terms of, you mentioned operating leverage, et cetera, right? So just as a conceptual dynamic, not to kind of hold you to any specific number, but I think I asked this question last quarter as well, but let's say that we incrementally add $1 million of revenue.
I just like I mentioned last time also we don't kind of you know give you know either growth guidance or profitability guidance we'll leave some part for for you to kind of you know make it out of the trend lines.
for many just as a, for example staff cost, right? So that's a very big part of the deal. I believe this, you know, for you to kind of make out of the trends, we don't really guidance on on on future kind of growth or profitability as such.
I appreciate that the question was more in terms of how should we be thinking about your employee base? Are you looking to add more staff to kind of cater to this growth? Are you looking at staff salaries? In say double to this kind of inflation that's really like how you think about staff salaries? For example, like I've been calling out you know consistently even the last time when you ask this, you know We're not really looking at adding any significant you know employees you know to the
to the team. It's largely going to be more inflation led or kind of you know, increases and not any significant head count addition and that's been the trend over the last few years if you see as bad.
Thanks for the time. Thank you Aditya. The next question is from the line of for money, the nature of access, capital money, you may please ask your question now.
Thanks for the opportunity. I hope I'm audible. Yes, please go ahead. Yeah, so I basically had a question and we get to the just said a bit, and you partially answered or try to now look on how we should be thinking about margins. But given the opportunity that we are at about 1 to 1.1% of GBR and the fact.
that our stock composition has been coming off. If you could give a sense some sense of how we should be thinking about the ESOP cost as well as the just a bit margin squeeze.
Yeah, like I said on the margins, you know, whether registered, I bet or I just should operating. Like I just kind of mentioned on the previous question, don't necessarily kind of give guidance either on growth or on, or on the net margins, but when it comes to, you know, share-based compensation, I can share some color that, you know, be expected to kind of largely remain in line. We don't really kind of see this increasing.
in the coming years, albeit it might only see a little bit of a reduction, you know, going forward, very unlikely, directly kind of you know, see an increase. So, therefore, from an operating leverage point of view, it is one of those lines which will contribute to some operating leverage.
coming years, albeit it might only see a little bit of a reduction going forward, very unlikely to a degree kind of see an increase. So therefore from an operating leverage point of view, it is one of those lines which will contribute to some operating leverage. Thank you all the way to the future.
Thanks. Thanks, Manik. Next question is from the line up for HL Kumar of HSBC. HL, the UNP's ask your question now. Yeah, hi. Thank you, Ripple. I hope I'm audible. Yes, please go ahead.
Perfect. First question was around the competitive intensity. So of course you know EaseMyTrip has a rapidly captured significant market in airlines and and now we are talking about capturing share in the hotel side.
So what's your thought on that? How can you protect your market share in airlines, but also in the hotels? So if you could please share your thoughts around that.
Yeah, maybe I can take that moment. So I don't think it will be fair to comment on a specific competition. I don't think it's fair. I think maybe you should sort of pass then the strategy and the question around the world, they're looking to expand, et cetera.
But if you look at sort of mikmutter in the numbers that we've reported out and the track record of the market share numbers also that we've reported out, we have only been gaining market share. You know, we pandemic on domestic flights, we used to be at 27%, we are now at 33.5%.
And similarly our hotel business recovery has been very, very robust. And you know, there's actually, you know, the reality is that at this point in time, the kind of hotel product that we have in terms of supply, depth and breadth and the product and the kind and the scale and the size of the...
and have a substantial sort of lead in and not necessarily on our flight business, but also on our travel business and as well as ground transport business. So, from our perspective, the way we look at it is while we are quite happy to have the healthy competition in the market because it's always good for the ecosystem.
but very focused on how we're going to drive our strategies. We're of be going to make the investments to make sure that we stay always ahead.
Perfect. Thank you. My second question was around change in the customer behavior. I mean, you know, whenever I speak to the hotels or the airlines, I think there are a couple of things or a couple of customer changes they talk about, the change in the customer's behavior.
First is how the customers are actually clubbing work with earlier trips. So basically the gap between the weekend and the weekdays is actually squeezing or reducing because people prefer, previously they used to travel in Saturdays and Sundays and now they travel any day of the week and they can work on todays from the hotel and then...
So there is a change in the customer's behavior and that is quite helpful for the hotel industry. And on the other changes that now post COVID, I think the people are taking too many short breaks, short frequent trips and then they prefer to drive down to many of our places. So what are your thoughts around that? I mean, you're being in the industry, I think you get a sense about the change in the customer's behavior and how that is impacting the industry or benefiting the industry rather.
And actually, I couldn't couldn't agree more with you on both. These are exactly the insights that we also noticed. In fact, picking up these insights, I believe we have launched, you know, like a product called Stakeation, two K-2, exactly the inside, the first insight that you mentioned, and that not necessarily people are waiting for long weekends to travel because they
So we've seen that trend increasingly picking up and it has continued. If there's something that has continued as the business has been recovering coming out of the COVID from a consumer trend standpoint, it is this. And then the other point that you mentioned is also very valid.
We've also seen that the frequency of taking breaks have gone up and short breaks that have gone up specifically. So while if the historical trend was that there is the summer break April , May, June quarter or a winter break or in the quarter and within that you will plan a longer duration holiday.
Now across the year, even for the non-seasonal quarters, you will see the trend of more frequent short vacations that are being taken by the consumers. So on both the trends, and these are very positive trends for the travel industry in India. And largely,
And so far, it has been India traveling within India. And as more and more sort of international travel also, or is it out in terms of just fairs getting rationalized, you know, over time, it might even be international travel. So we'll wait for that to see how it happens. But in terms of just positives coming from the consumer trends, these are two bit positives. And the technology she came up with the idea to work on something she potentially invented in her view even in the market, but which generally happened in actual terms. And the technology she came up with the idea to work on something she really invented.
Okay, perfect. Thanks, Ajay. My next question was around your loyalty programs. I think you had it in the last quarter if I'm not wrong. So could you please talk a little bit about how the loyalty performance loyalty program is performing or rather more importantly how the return rate
pointed out the metric that we track for this is that you know how loyal are these customers what is the sort of the petriot as compared to a normal non-black customer and we quote-on-quote we've seen sort of improvement on black members coming back or the number of transactions that the black members do in a year on our platform versus a non-black.
member has only been increasing in favor of black members. So yeah, so we are very keen to sort of continue to keep expanding that program and also keep the value proposition very strong for black members.
We have any grids by NJANs, which shows that, what is the top 50% of customers or top or next 45% whatever it is showing that what is the return rate or how many bookings do they make, top 15%, top 20% something like that. Do you have that kind of grid? No, actually when we look at it obviously at the operating level, I'm sure a team just sort of monitoring some of these.
The black numbers, black members would be doing 1.5X for example. So that's the sort of difference that we've seen.
Understand, understand, perfect. Thank you so much and wish you good luck. Thank you, sir.
Thanks, Satchal. The next question is from the line of Vijitsa and of city, Vijitsa, you may please ask your question now. Yeah, hi, thanks. Thanks, Sourpal. Can you hear me? Yes, please go ahead. Yeah, thanks. So just my question is on the hotel side, starting with a premium segment, Rajesh. So have you seen competition here increased from the likes of booking, okay, in a good et cetera more recently?
creates with premium hotels is it changing your negotiation to the premium hotels on the platform?
So, Vijay, as far as your first question goes, nothing unusual to be honest, I mean, this competition was always there. And like I said, the Hildi competition is always welcome. And this is very competition forward on the back of, you know, the product, the experience, and this is really, etcetera, which we from our point of view, absolutely love.
you know sort of competing on those aspects and that's wonderful and nothing unusual that has happened. In terms of opening up inbound traffic of course, Caval is opened up and there's been more inbound traffic and they do bring inbound traffic to the country and they definitely are viewing but you know I had that sort of
made any impact on our sort of relationship and engagement commercial, et cetera. But the answer is no, because there is large pie off the travel is still domestic and will continue to be domestic with the size of the pie is pretty big. And all kinds of sort of segments of the...
is corporate op-sites etc happening and that and a lot of the preference there is there is domestic and for more than one reason so clearly it is relatively cost effective because the fairs on international destinations are pretty high but even let's say they get rationalized and if they steady state
There is the relative size of the pie for the domestic market is really really big. Therefore, from that point of view, our contribution is only going to be significant and will continue to improve. Therefore, I think there is place for both without impacting each other.
God, thanks Rajesh. Rajesh, my second question is, now, if I remember right, last quarter, also you mentioned that, you know, some of the premium hotels in India, obviously, always, their average daily rate and that the occupancy, itself, some way to recover now.
A few of these hotel companies which have recorded 4Q, we can see that this bit has little bit of normalization there and occupancy has gone up. Have you seen that more broadly? And from a NFI 24 perspective, do you think that is the direction in which you headed?
In the non budget segment that is, you know, the ideas go down occupancy is go up. Actually, you know, and what you said with this right, right? I mean, it's actually the data is out there, but if you hear some of the commentary also, from the hotel partners were public. And you would notice that, you know, there's.
now see in the context of because it's obviously a function of the demand momentum continuing, which is linked to therefore occupancy. And then what should be the pricing strategy from the hotel partners standpoint? And we've seen that in the past, even in pre-pandemic.
that, you know, for example, seasonality versus off season, they could always, they will always be a difference, and so on, right, which is underneath that is clear function of demand and and supply, right, you know, so from a seasonal perspective. And I don't think that, and conceptually it is going to be any different. So if.
the demand continues to be robust and there is a possibility that we will, especially for the maiden premium segment that the rates would continue to stay there at level and firm up. But if there is a demand slowdown at some level or
You know, the pent up is, you know, slowing down and becomes like a steady state. And more supplies in the market, then there may be some rationalization that might take place. So I think it's purely a function of demand and supply. And, you know, and how they sort of manage their overall yield management. I think one important point that we should keep in mind.
The reality also is that if you compare it with deep endemic for the last three years, I mean, except for the last year, I would say last two years. And even before that, the rates had not really gone up. So there has to be some natural annual inflation that you should definitely factor that in.
You know, which would mean maybe in over two, three years, about 50, not percent. And that should be a normal sort of increase in the, in the phase or the race, but anything beyond that will be a function of demand and supply.
My last question Rajesh, if we can on the budget side now, we as you pointed out earlier, the super budget segment has been affected badly because obviously the discounts went away and everything. But it's been a while since the economy has fully opened up and the budget hotel
more recently and is it going to still take a while before this segment kind of takes a growth faster than the premium segment that is?
You know, on the supply side and the momentum part of it, absolutely. And you know, and actually even for the budget segment, it's just the ultra budget segment maybe less than 1000 rupees a room night or 700 days, and do nine. And then that maybe some shown and they just, you know, because it is in the
the end user price pre-pandemic was as Moetwa sharing earlier, deeply discounted, etc. And it's coming back. And by the way, I don't think it'll be fair to say that it's not coming back. It's coming back actually in Ikea. So improving water on quarter and it's just taken more time. It might take maybe another quarter or two. I'll come back and eventually I'll come back. So I'm not necessarily worried, especially in the context of the impact.
please, please mail us mail it to us and we will take it separately. This brings us to the end of the call, Rajesh, closing comments from you. Thank you, Ruput. And thank you everyone for your time. Thank you for your patience. And we'll say that. Thanks. Thank you, everyone. You may please disconnect now. Thank you so much.