Q1 2024 MakeMyTrip Limited Earnings Call
Investor Relations I can make my trip, we'll just wait for the attendees to join for a few seconds.
Hello, everyone and Liberty Gunn, Vice President Investor Relations.
I'd make my trip limited and welcome to our fiscal 2024 first quarter earnings have been on today's event will be hosted by complete leadership deep comprising of deep Kalra, our companys founder and chairman joining him is largish model, our co founder and group Chief Executive Officer, and Mohit Cobre, Our group Chief Financial Officer.
As a reminder, this life event is being recorded by the company and will be made available for replay on our IR website. Shortly after the conclusion of today's event at the end of these prepared remarks, we will also be hosting a Q&A session for the bone certain statements made during today's event may be considered forward looking statements within the meaning of shale safe Harbor.
Provision of the U S Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance are subject to inherent uncertainties and actual results may differ materially.
Any forward looking information relayed during this event speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances. Additionally.
Information concerning these statements.
Are contained in the risk factors and forward looking statements section of the company's annual report on form 20-F filed with the SEC on greater of July great. OTT copies of these filings are available from the SEC or from the company's Investor Relations Department I would like to knock on a with a call to largish load utilization.
And do you recall.
Let me give everyone to our first quarter call offers good 2024.
We've started this financial year on a strong footing as evident from our Q1 results.
Travel demand was robust in the leisure heavy seasonal Guangdong despite high fares.
Do short term supply side challenges in the aviation market.
Mcnair strong traction in leisure travel during the quarter aided by seasonality coinciding with somewhat auditors while business travel continued its recovery trajectory.
All segments have now grown beyond pre pandemic levels as a result of which we have posted our strongest ever quarter. Both in terms of gross bookings and profitability.
Gross bookings for the quarter reached an all time high Mark of approximately $2 billion growing at a faster pace than market growth rate.
Our registered Robert operating profit or adjusted EBIT.
After the point $1 million and GAAP profit after tax operating point $6 million were also record milestones for us.
India is still an underpayment penetrated travel market and is well poised for long term growth. Despite the challenges caused by the pandemic and the sector has demonstrated remarkable resilience and adaptability.
Other macro factors in India like strong GDP growth growing earnings in the hands of many less population, increasing propensity to travel and improving transport infrastructure and last mile connectivity will help fuel travel sector growth in EMEA.
Human preferences are evolving and experiencing traveling now increasingly emerging as one of the PREPA areas to span from the growing disposable income in the hands of consumers.
As a result, both domestic tourism and international outbound traveling unexpected to grow at a faster pace in the next 10 years compared to the last 10 years prior to the pandemic.
Infrastructure investments are adding domestic tourism growth mildly aspirational Indians are looking to travel to various international destinations.
As per the IP came on travel monitor India generated ishares highest argon travel volume for the first time in 2022 exceeding those of China, South Korea and Japan.
Partially aided by lagged recovery of outbound travel in China.
All major Indian Airlines airplanes record number of orders for new planes to cater to this demand. Similarly on hotel chains have announced expansion plans doesn't greening the supply over time we.
We continue to stay excited about the future opportunity and geared up really with focus on leveraging new technologies to provide more convenient and personalized experiences for travel planning and booking.
Adaptor travel related offerings quality customer experience powered by robust tech and product product innovations.
Along with strong brand strength are helping us cater to the evolving consumer preferences and stay ahead of the market.
As for business segments, now starting with their business.
Witnessed strong growth in air ticketing, driven by leisure travel during his time with high season quarter and continued to regard, 30% plus share in the domestic loan passenger market.
Domestic supply was affected during the quarter due to Gulf coast issue, leading to higher air fares. The supply gap was partially offset on account of higher load factors and additional supply deployed by other airlines.
With the BGC approval granted to go first for the resumption plan and additional aircrafts expected to arrive for other airlines, we hope to see supply situation improving in the coming quarters.
Seasonal demand also Hillsboro, Oregon travel segment finally recover to pre pandemic levels after almost three years by.
By long haul destinations still haven't recovered fully due to supply constraints and visa related issues Jordahl International travel has not possibly pandemic levels.
We expect the overall international Air ticketing segment to keep growing as the supply situation eases Potter.
We continue to innovate our product to get it to a larger variety of use cases during the quarter. We launched an inspirational travel discovery protocol incredible India at incredible prices, which offers results to leisure travelers about the most economic malaise that to multiple destinations in India from their chose.
And origin destination. The early results are encouraging as we have observed a significant increase in searches for leisure destinations on the incredible India funnel.
During the quarter. We also launched an industry first student festival for international flights in June all things special relevant benefits to students traveling to international destinations support their college studies.
Coinciding with the commencement of Academy session. During the period. This was highly appreciated and helped US increase our student led contribution to overall business, our accommodation business, which includes apparel home stays in packages witnessed strong growth. This quarter ended viral boost demand in both leisure.
In corporate travel, we continue to focus on supply expansion and improve discovery.
As a result during this quarter, we sold 56000 plus unique properties in more than 7100 cities, which is the widest spread achieved in the business. The supply expansion with improved personalization and search results has helped us in improving online buying behavior in an underpenetrated category.
While our gross booking value Crosby pending levels, a few quarters back during this quarter room nights have also recover to pre pandemic levels.
<unk> also seen good momentum in our international retail business in line with the recovery in outbound travel.
Many countries like UAE, Indonesia, Vietnam, Maldives have already surpassed pre pandemic Williams, we introduced a few industry, leading features and hotels to continue our journey of ensuring delightful and high quality experience for the end consumer book with zero payment was launched last quarter, which received different.
First in response from our users with no upfront payments required customers can now confidently plan their trips and advance benefiting from exclusive beans, and avoiding price fluctuations. This innovative features has particularly help to improve adoption rates in tier two and tier three cities.
We continue to scale, our homestead witness with increasing coverage of leisure destinations learning from consumers insights, we have enhanced our offerings for consumers to get final details around meal options, such as availability of schaeffer the property meal options.
Kids meals extended cooking kitchen amenities at one place before booking.
This is helping us to specifically target intermediate premium segment of space.
Our packages business witnessed strong growth this quarter.
We successfully conducted three campaigns during the quarter.
And that is helping us scale the business significantly.
<unk> partnered with Europe , Armando a leading global player in tourism and travel industry, while bringing the letters international holiday packages to India online with this partnership over 600, new itineraries will be added to make my trips existing catalog of nearly 5000 holiday package options.
The partnership further strengthens our portfolio and bolsters, our capability to unlock global destinations and new combinations to cater to every traveler preference.
Our bus ticketing business continued to deliver strong results Q1 saw significant addition of supply across the country. Our daily lives reduce our supply for private bus operators has increased significantly.
Owing to high occupancy across most regions during April in Maine, We expect fleet additions to be strong in the second half of the year.
Our other ground transport sensors, such as intercity cabs rail tickets et cetera continue to scale. When this segment is helping us acquire new users for the platform. We are gaining market share in the rail ticketing business organic downloads for Standalone Red Red real App with an operating at 4.5 continues to be high on both iOS.
And right now.
Now a quick update on my partner in corporate travel business RMR Rmi partner B to B to C platform, where we offer both flight and accommodation booking is gaining positive traction from our partners. Our travel partner accounted now 38000, plus and expanding every quarter. We recently launched my partner in GCC.
And we already have more than thousand partners live on the platform.
Corporate travel business is scaling up our active customer count on my voice is now 49000, plus and for Q2. The active customer count has reached 271 with strong addition every quarter. We continue to add more capabilities on our board my boots and gear to the platforms, we completed automated integration.
Triple H M S and expense management platforms, thus, reducing onboarding time for corporates and simplifying overall travel and expense management core employees.
Our audio business in GCC is growing said it steadily gross booking value doubled over the same quarter last year.
Strong momentum in the last quarter was driven by significant progress in building key product features supply richness and building new growth avenues, along with revenue growth, we had been working on improving efficiency and acquisition and pricing management driving significant improvement in unit economics, while overall contribution of GCC remains small.
March showing good traction organically with this let me now handover the call to Mohit for financial highlights of the quarter.
Thanks, <unk> and Hello, everyone.
The strong business performance in the first quarter of the new fiscal year 'twenty very full indicate that the pandemic is now well and truly behind us.
We continue to leverage the cost escalation initiatives, we had rolled out during the pandemic impacted period.
In this period, taking a longer term view, we have also invested behind three or four key strategies are areas, which are as follows firstly.
Technology upgrades on the supply side to drive synergies across brands.
Enhancing the stability and scalability of the underlying platforms on the customer facing science made significant enhancements to deliver highly personalized customer experience driven by data science and machine learning abilities and on the tech backend and providing all lenders emissions part of either variety of post sales service requirements.
Secondly include the travelling rather than into service offerings on our platforms to be the one stop shop are traveling so per our partners to explore book and manage all of their travel needs.
Thirdly suppliers have expansion, particularly in the accommodation space, which is more getting more and more hotels and alternative accommodations across price points and across the length and breadth of the country. So that our customers can have more options to choose from.
<unk> Ah.
<unk> targeting of latest customer segments by leveraging new generating artificial intelligence tools and scaling up new demand segments lack eurodebt platforms to target copper bookings as well as increase our outreach.
Clearly beyond the tier one cities to offline Adas and other online a few years.
As a result of the of all the business is well positioned to leverage demand recovery and outpaced market growth, while improving profitability.
Therefore pleased to report a strong quarter as we begin the new fiscal year 'twenty for both in terms of business growth and profitability.
While there are certain supply chain hiccups during the quarter demand for travel continues to be robust backed by seasonality and positive consumer sentiment.
Witnessed strong year on year growth across all segments, which has helped us achieve milestone numbers in terms of gross bookings as well as profitability and this has turned out to be one of our best partners to date.
During the reported first quarter.
Gross bookings came in at approximately $2 billion.
<unk>.
198, 7 million to be precise witnessing a growth of over 31, 4% year on year in constant currency tops.
We deliver.
GAAP EBITDA of $5 $9 million for the quarter witnessing a growth of around 31, 5% year on year.
EBITDA margin was at 13, 2% for the quarter, which is an expansion of about 530 basis points as compared to the same quarter last year.
Adjusted operating profit our adjusted EBIT.
Stands at about $31 million as compared to $16 $5 million during the same quarter last year, an improvement of almost 3% year on year.
As already color. There are these these are our highest ever quarterly numbers.
During the business.
Why a sharper focus on profitable growth the black Guatemala medium term margin got it.
<unk> ahead of our expectations on the back of strong business growth and our convenience focused on cost efficiencies.
Our air ticketing gross bookings for the quarter.
They stood at $1 $2 billion witnessing a growth of 12, 9% year on year on a constant currency basis. Adjusted Martin you stood at about 74 $5 million of extremely strong growth of 34% year on year on constant currency basis take rates or margins for the quarter.
Stood at about $6, 1%. This was lower optically due to the higher Asp's, Oregon, a human being a seasonally strong quarter and contraction in margins in line with the supply constraints.
As a result of the shutdown of operations, but another low cost airlines in the country.
Bookings for the quarter in the hotels and packages segment is stood at about $498 million witnessing a strong growth of 36, 5% year on year on constant currency basis in line with the demand trends.
Just imagine for a GMP business is stood at $85 $6 million during the quarter witnessing a growth of over 36% year on year in constant currency terms.
Margins for the quarter was 17, 2% an expansion of almost 90 bps over the previous quarter.
And our bus ticketing business gross written for the quarter.
What I $276 $8 million growing at 94, 7% year on year on constant currency basis adjusted margin stood at about going to stand by $3 million. This thing as strong growth of over 39, 7% in constant currency terms.
Items in our bus ticketing business stood at about 99% for the quarter.
We continue to be prudent and efficient with our expenses.
Specifically, our customer attrition costs as reflected under the marketing and sales promotions.
During the reported quarter, we went live with a brand campaign to drive top of mind recall and accelerated called collection and a seasonally strong quarter overall marketing and sales promotion costs for the quarter, including the brand campaign came in at our four 6% of gross bookings as compared to five 1% in the same quarter last year and.
5% during the previous quarter.
Most of the other operating expenses continue to be in line with the previous quarters.
As at the end of this quarter.
Cash and cash equivalents stand at about $522 million.
Cottage and deployment of the free cash in future could be in pursuit of growth opportunities all towards capital restructuring via share repurchases. During the last quarter. You had also notified the zeolite and our share repurchase plan to include repurchase of convertible bonds.
With that I'd like to turn the call to open for Q&A.
Thank you Mohit, though any participant are willing to ask a question on the management can click on that as an option and we will take the questions. One by one. The first question is from the line of such as Phil Gallagher of Bank of America, such a new repeat ask your question now.
Thanks, Brad Conrad.
Congratulations on a great set of numbers I have three questions.
First question any lending season, this quarter as strong growth in hotel and strike a subdued or can add.
And because of the mix shift in favor of pockets, perhaps termites and charged them a broad set of.
Question out there is in the house or the one you look at the sustainability of these out at Mccann you back margins going ahead.
We get them like you're buying daggett angle that you will be on medium term margin targets in this quarter.
Let me pause here.
No no promo if we look at it from a mix point of view.
The DH MP businesses now and into the early forties.
If you look at historically, what is the pre pandemic period.
We have seen as MP contributing to kind of almost close to the 30% of the mix. So I think there is still further potential for <unk> hundred is in packages to them.
Improving that mix.
While we could see better growth coming in from air ticketing in the in the in the coming quarters as some of the short term supply constraints get lifted we believe blend advising should continue to kind of an ob.
And the range that we've kind of posting we've seen slight margin improvements coming through over the last few quarters and that the two parties potentially sustain.
Okay, Leitao predict you had actually out there.
Question, just wanted to understand you know.
How should one look at the industry growth or.
The next six to nine months and it comes from a context back in last year was clearly more like guy in on your base kind of Bunyard, but does she had in the past quarter. You guys are more like a greenish airline question growth, so they're 25% plus growth by industry is sustainable.
Growth is a factor of one industry growth.
Less the kind of incremental growth that we get in by the increasing online penetration and died and here we are kind of pretty much representative of the growth on the online side, particularly on the on the author of the travelers and he says so I think we continue to leverage on that trend off in.
Increasingly consumers getting comfortable with online buying behavior.
And particularly in the Underpenetrated segments like a competition et cetera.
So that should continue to see even better than industry growth for us in the coming years.
Maybe if I can just add to what's actually going to same.
Second is our historically, we've seen the thumb rule typically is that the overall industry growth online offline put together, let's say, but its like 10% CAGR.
And then the online typically will be to X.
And we've always sort of a at.
At least historically, even in this quarter, we called out.
Our growth rate typically has been faster than the industry overall the growth rate as well. So you know some sort of additional points for that.
But that's the way to sort of Directionally think about the growth.
Okay. Thanks, Roger Shannon, along right and last question here and just wanted to understand a bit more on the book with zero payment. What are you guys launched last quarter.
How should one look at the impact of the Sarnia numbers, Ied and all what kind of a balance sheet risk posture, you're taking longer to get out.
Anything with to explain the economics, how that would be helpful.
But and there is.
Let me just take this there is no balance sheet risk on this for poor Sean.
Because this is just a feature back to back sort of worked with our partners where it offers you know more flexibility to the consumer to travelers, who just basically working on the inside that.
If you are not necessarily 100% certain and at some level at.
Also you know over time drive the behavior of our booking in advance.
Was it was really that hard behind.
So.
Give them flexibility. The consumer you can you know you just started to let's say plan for your trip you can just go ahead and book it because there is a feature available that you don't have to upfront commit any money.
And then as you make up your mind you can just to make the final payment mattila booking will be guaranteed so that so that's really the focus here, there's no balance sheet risk lives back tobacco arrangement here overall from an impact standpoint. The way we are looking at it now and now that has become popular in consumers' minds already.
Good feedback coming back from the customers that they are finding it really really.
Useful is that effectively most of the panel will increase significantly there will be more users more people, who would be wanting to come in and let's say blogger resolve their and booking Ah.
And if they end up just canceling are canceling it the net impact of increase in the AR in the more more new users coming on even the existing users coming in booking.
And.
And let's say when the cancellation rate is a little higher because there's flexibility of what the net net impact is only going to be growth.
In the number of room nights. So that's the way we're looking at it but there is no balance sheet risk and more than this.
And then <unk> all faced as terrorists, let's say you have to your point of a consumer canceled perhaps at the last minute and doesn't make any peer bank.
The loss to someone like Anatol badge, there's loss.
It's actually it's an order cancellation and that's the way we are plugged it to its inaugural got installation and then happens lets say of the payment does not happen where back tobacco enjoyment with the partner that.
The free cancellation is available for lets say 48 hours in advance of 72 hours in advance that the timelines aesthetic guardedly. So if the payment is not received from the customer cancellation happens automatically.
Got it thank you and all the vessels and groups.
Thank you Sachin. The next question is from the line of Mitchell Chan from Citi. A legitimate please ask your question now.
Thanks, Apple Ah, Hi, Hey, guys. Congratulations on a great set us on this.
Two questions from my side, one is I know you mentioned the target with free cash of.
The buyback and I know you have that convertible debt that you would want to buyback.
Right from that 136 billion dollar authorization have you settled on the use of cash between buybacks and dividends in favor of buybacks is that how I should understand it.
So I think we've called out currently is the share repurchase plan and they're kind of item the share repurchase plan is F. As I've mentioned to include.
The Canada boot barns.
Haven't kind of nomad any any comment around around any dividends as such and even on the share repurchase plan. So this is an existing client which has been kind of an okay, which has been carried forward for quite a few years when the balance is about $136 million.
We should kind of be open to increasing the overall class outlay. Once we're kind of closer to its cindy available available lipid within the plan. So I think the lunch and Nike that delivery plan is kind of a cyclical and the other $36 million it could be okay, a much larger outlay, depending upon how much I'll be able to then.
Repurchase.
Got it.
Maybe if I can ask.
Is there are any specific is traver.
River for the choice between a dividend or buyback I'm, just curious about that because obviously there's a.
The reason for something like that in India, but just going Gryzlov ticket I'm wondering if there's any rationale. So a couple of a couple of things in her diary celestial part as you know you could look at.
Like I said, our preference would be why do we have a convertible bond which has been a sudden put triggers end of year, three and EFI, our preference would be to kind of Latino reports is the.
The convertible bonds.
Provided that available at a at a meaningful discount.
However, like that.
It's been difficult to kind of integrate them at a discount deputy trading pretty strong, Nevada was 99% to 100%.
So the first defense would lie in terms of.
Repurchasing the convertible bonds and thereafter, we could kind of look at the repurchases on the on the share side. So this is.
Before.
Iridization at our in car.
Correct.
But my second question is.
Just on the quarter I see that the other expenses. This quarter is you know somewhere around two 4% of G. B the quite a bit of a jump. There I know you mentioned are areas, where you're investing behind but if you can give more color on you know beyond the payment gateway.
With related fees and those kinds of things are where this increase is coming from that would be great.
In addition to that just a follow up on your adjusted EBIT margin number you will briefly hit the top end of the target of one to one five and I just wanted to clarify if you are revising that target too.
Two 1.5% plus is that how I should interpret your earlier comment.
Okay.
On the first one.
This is also a result of a little bit of a reclassification of certain expenses, which are also coming in as cost of other cost of services and have now been reclassified as distribution expenses in the other operating expenses category. So okay. Amanda disclosure in the 6K around the Santa <unk>.
Is it coming from the bus ticketing business and also from a an overall up in this business. So this is a little bit of a optical thing coming in from the reclassification as explained in the in the 6K.
Cleveland.
If you really look at it.
We have been guiding that innovates gradually scaling up on profitability.
And you would recollect that over the last few quarters, we've been maintaining that we would like to get to about.
The themes of adjusted operating margin as a percentage of our adjusted margin and <unk>.
All you know about 5% of gross bookings in terms of passengers across bookings.
I think it was kind of in our history.
Level. During this seasonally strong quarter says also bagged with the fact that we were able to significantly optimize on our customer attrition caused during this particular quarter for the quarter has certain amount of supply constraints as a result of beach, we've kind of.
Green Dot strategy, our current aikido tactically made sure that variance.
Spending more on answer plan building kind of a not expenses rather than charter.
A transaction.
Transaction driving expense like promotional expense.
And therefore, the overall you know marketing is going well and came in at about four 6%.
I believe we could look at these expenses coming in at around the five I went up with this box.
However for.
For the full year also.
We've seen late last year, we were pretty much able to maintain the momentum that we had kind of generated on profitability in the first quarter. Even during this year, we would like to turn up maintenance and the momentum.
And try and keep the profitability around the first quarter levels.
I'm sorry, one last question if I can tie in Richardson.
The cricket World Cup in November is that a significant business driver.
In General I don't know if you had any experience around that at the last time, we dealt with shared World Cup.
We have seen news around the bookings in certain places.
Going to a highlight.
Hi levels already so I just thought I'd get your two based on that one.
Well, maybe we did I can take that Chad.
I know and you know and there's a lot of hype and noise around it already so I'm not surprised that you're asking this question listen days given there is so much of interesting watching cricket in India.
There is definitely bound to be some oh sort of excitement around traveling to their destination with the launches is going to happen or and therefore by virtue of that there is definitely it could it could act as a booster for the travel industry overall domestic travel right and you know as.
So you can perhaps already see payers have started to go up specifically to those dates and even though hotel rooms et cetera.
The rates have gone up because everyone is obviously I mean, there is high there is a potential of potentially there's going to be heightened demand and therefore accordingly, the prices on our own so going up so clearly there will be some upside now how much will that be a reality from a preparation standpoint from.
You know I got in beer. We are we are doing everything possible for us to be able to be ready to tap into this opportunity as well now be it on the accommodation side not necessarily on the hotels.
You know, making sure that we have a lot of the inventory in place, but also additionally, actually it's a great opportunity for home stays as well for some of these locations so and not to say obviously their travel that might happen along with it. So overall, whether it is air travel.
Lord ground transport art overall accommodation during that period.
There definitely will be some.
You know growth there are additional growth or the incremental growth that we would witness.
Alright. Thanks I used those are my questions. Thank you so much thank you Richard.
Thanks, Richard The next question is from the line of Nishu took care of Boardman Saks Monesia European ask your question.
Yes, hi, Thanks for taking my question. So my question is actually a follow up to Richard speak. This question now when we look at your marketing spend more ethylene and all it takes a couple of years back you were guiding to about six 7% of gross bookings and then the guidance was lowered to 5% to 6% and now you're saying five to five and a half and of course the numbers come back full point.
Six so is there actually like a downside risk to marketing spend meaning in terms of what you've seen the market and competition do you think structurally marketing spend has room to come down even further because when you look at it as a global markets I think the marketing spend for the traveler to stay ahead of it.
It's still lower than what you have reported see I'll touch on that would be great.
Yeah Me Tomorrow I think.
It's kind of you know.
Following as you have seen over the over the last few years and quarters.
Clearly there are.
Two or three tenants that we had called out one.
No.
Indeed, this is there's definitely scope for improvement in the in the cosmetic shift cost linked to a few things one the.
Overall, given piece of customers that we keep acquiring and how much of it how much of our transactions keep coming in from from repeat rather than new customer acquisition, which is generally more expensive buried and we've been calling it out there a repeat rates are actually kind of going to be.
Mean, increasing almost 70% plus of our transactions and our orders now are coming from our existing customer base and clearly there's an opportunity to keep expanding the new customer base as well.
What we I was going to keep in mind is usually you know as we kind of can only keep increasing the mix on the accommodation side accommodations being.
Elisa margin business also.
Requires a little bit of a in a larger push on the marketing and sales promotion side and therefore, the blended in our marketing and sales promotion could walk a little bit as we see them mixing brewing.
Towards hotels and packages that said this particular quarter. There was also a little bit of an anomaly. There you know like I had called out that happens within supply related constraints, which was impacting particularly the air ticketing side of demand right and therefore overall travel.
Therefore, this kind of an old one.
Equally a lot more prudent in this particular quarter on some of these customer acquisition costs and therefore, they have come in.
Slightly lower than where we would have anticipated them to come in versus the previous few quarters trending.
Should we be able to sustain at around these levels all be kind of getting back closer to the 5% levels will depend upon how quickly you know, particularly the ticketing side of business all the while the industry recovers and that would claim is kind of a impact.
In fact, this in the coming quarters, but like I said in the overall.
If we can be around that range of five to five 5% that should be a good range to be on the competitive side. He is competitor dynamics have been easy.
And like I said, two factors as I kind of contributing to it is one is the size and scale of our customer base, increasing online penetration in each of the segments that we operate in and currently increasing kind of ethanol.
Using a competitive pressures.
Thank you so much for that my second question is on <unk>.
The reclassification that you talked about it a take rate increase at least in the bus segment up about 80 basis point quarter on quarter in hotels, and what kind of base went up quite a quarter is a large part of that due to the extra risk cost reclassifications.
Not in hotels actually hotels, and yes, there's hardly any and ethanol.
The impact coming in from the reclassification, the reclassification is largely coming and making an impact on the bus ticketing margins and therefore I was clarifying that.
It's something.
Specifically maintains as as you know an explanation in the MD&A section in our 6K. So he is large part of the bus ticketing upside that you see going in from about eight 8% or $9 nine is coming in from the reclassification.
And my last question is on the budget segment.
But you can tell us and Oh aric.
Our recovery that I saw in the past you've called out or is it a company that has lagged.
And has the recovery dynamic that improve meaningfully in the last quarter and is that driving that take rate expansion on a quarter on quarter basis.
Yes. It is it is maintained and therefore, you do see some impact of that coming through the <unk>.
The improved margins as well and we are now close to have already 85% recovery on the budget segment is that our the supermarket segment. Thanks.
Thank you so much for taking my question and all the best.
Alright, thanks, thank him a niche. Our next question is from the line of added this ratio from Macquarie. Please ask your question.
Alethia lateral annuity like yes. Please go ahead, yes, great.
Thank you very much.
I had one big picture question I like to two specific questions. So it's obviously great to see the operating leverage come through.
So beyond market dynamics, and really curious to understand what really changed in terms of how you're managing the business I think that before Oh Gee Asia E. R. R. R.
Can you just speak about that a bit that's what's really changed in the past one month and one yet as to how you're managing the business.
Yeah, maybe maybe I can take that over time.
I think actually two or three big changes and I would actually just not say for the last one year I would say, including the pandemic period and sometimes.
No the downcycle actually pushes you to or think harder and it also throws opportunities.
You know how how could you, possibly look at the opportunities and look at the businesses slightly differently.
So just to specifically call that out right. So the one.
Big opportunity that we regard was the availability of water.
You know technology and brought in folks and and we decided to sort of focus on.
You know what could be the potential opportunities are.
On the tech front or on the product front in Tibet, we can possibly tap into all of them.
For our existing business and the Beacon and then in parallel can we think of new business segments important bagged whatever development that we need to do.
And what is that can we just to sort of attack those areas in and double down on those so deleverage technologies, although the latest technologies to focus on the expanding the product offerings to meet.
You know like literally a one stop show up on the B to C side, and then build to multiple platform that we've been calling out.
In those two years I mean, you know some.
Some of that goes enhancement on the platform that was already there like my best corporate segment platform was already.
And we had started their journey pre pandemic, but we just to significantly sort of and deploy resources and double down on improving not only the broad experience, but also just significantly sort of expanding the offerings. There been fixing all the supply side frontline issues et cetera.
Similarly, the my my partner platform Similarly took money Fintech platform.
Launching into the UCC market launching red real and get them and so building an affiliate platform that we can potentially Pablo you know many of the Horizontals out there now for a new user acquisition. So I would say that was one area I'm just the product.
The tech.
Part of it the second interesting opportunity that we saw was in the aerospace where we saw homes days category and we're doing very nicely.
And and we double down on building the supply strength on that today, we have about 28000 properties and we also saw an opportunity in the budget Hotel segment.
There was churn happening, but then you know there was an opportunity on picking up the quality.
Apply in the market and bringing on our platform as well so a lot of the work on the.
Expansion of the domestic hotel supply and specifically on the Homestead and then building home front end capabilities.
And so building.
You know supply side or a host application dedicated for the Austin and so on and third I would say I'm just looking at the opportunities again.
Which could enhance productivity you know no.
Of course gives us agility at scale.
And also helps in costs sort of rationalization.
And that was just building the self service platforms for our post.
Post sales customer service side.
And we invested behind.
Again deploy a lot of sources, Florida bandwidth went into it and we significantly improved the customer experience on the porcine side.
And thereby reducing the sort of.
You know the dollar amount of outsourcing that we had to do pre pandemic.
At our scale so all of these areas.
And that obviously have helped us both.
Both on the <unk>.
Hmm.
The profitability of the scale standpoint, overall sort of unit economics, improving but.
One on so more importantly, adding new areas of growth. So I'm, saying all in all it was basically an idea of just looking at the opportunities of where it could potentially help you post pandemic.
While we were sort of weathering the storm.
<unk> as a separate on track in terms of just.
How best to come out of the crisis. So these.
These are the few things.
Probably worth calling out.
Great. Thank you so much such response I think the other collado says.
This improved revenue line whilst yard.
Employee costs have been steady and that's I guess speaks to your productivity comment as well.
Really curious to understand how this shapes up in the next couple of years, you can have from Mosul productivity per employee.
Maybe some guidance here on how you're thinking about staff salaries Isaacs.
As we continue to grow the business.
Charlie maybe I can think that our returns when it comes to.
Personnel costs overall, I think there's been largely behind you now are seeing inflationary increases in our Miranda.
And that 15% Mark.
That is what we should be seeing as we don't agree.
Expect to have any significant increases on the headcount side.
When it comes to a specific area.
Of course next year based compensation, etc, Our SBC cost there.
What you can kind of consider is that the absolute number Shouldnt lastly remain in the same ballpark range and therefore to learn a lot of operating leverage going forward is that.
Great. Thanks, a lot I had one for one additional question. If that's okay. So I'll pause on working capital I can't even seen that especially in hotels is coming back in the mix and.
I can tell you would've thought that you will see a positive working capital impact as these two lines come back would you tend to agree with that comment and I'll.
How should I be thinking about the working capital release going forward.
It was really to follow up kind of in a training you know over the years.
Seasonally high quarters would generally see in deployment and working capital. Our this quarter essentially because we have been extremely focused on cash flow management as well.
<unk> actually seen a lease coming on developing governance side.
That's actually a kind of a big positive for the quarter that we've reported.
Because usually is otherwise in a peak seasonality visionary deployment that we see or what he goes.
But I guess the specific question was as he had more share of hotels and your mix. My understanding is that I think kind of booking in advance the kind of advances, which I'm, giving wait make much of a as a platform stays with you and so there's a positive working capital impact until the time actually checking right. So I was wondering if as you see more hotels and more.
And fashion.
I'll come back you should see a big a stronger working capital impact, which favors U.
But not a lot because it wasn't in there you can see the whole campaign you had this quarter was around because zero rightfully not necessarily trying to kind of build on.
Positive working capital.
Through the accommodation business, that's not really the intended use.
Using a variety of options and features such as pay later and applicators helio, etc, whereby we don't really see that it'll be very significantly and have enough working capital.
But it's really coming in with the increasing mix coming from some hurdles in packages.
Okay. Thank you so much lease clarifications. Thank you Chuck.
Thanks, Alastair that next question is from the line Love God of the theory of mother's day and they've Gotta BMO. Please ask your question now I am already but yes. Please go ahead, hey, congratulations on almost a magical quarter on margins and cash flow.
My first question is on your comment around the air ticketing business should see improving trends going forward.
Fly constraints easing.
Is this more like a second half phenomenon or it should start happening.
From near term et cetera.
Yes got it and thank you firstly, thank you for the generous comment.
Yes got that.
What I was just trying to say in my commentary as well most likely second half onwards, because that is when I think the deliveries are scheduled to come in more planes that are likely to come in but you.
You know the title group of airlines or in legal for adult and even for a closer than the others.
So and that would hit.
I don't think it is happening like in the immediate future like not in the running quarter, but from second half onwards. It starts it will start to ease out.
Got it very clear second question is again, some comment that you made around youre growing faster than market in H N P segment.
How to understand the overall volume growth.
From an industry standpoint, and wed have U car T or a market share gain from.
Okay.
Yeah, No I think the data that we have sort of looked at them and you know right.
And overall level. It's hard there is not really any structure third party data that is available like you will get in EMEA market like did you see a number is a very good number that comes out every day. So you know to the last sort of digital there what is your market share gain et cetera, and that's not necessarily the case with hotels market admittedly.
But what we see and get on common does based on looking at that data that you know specifically on our platform. We have looked at every segment as compared to let's say, a pre pandemic level or even year on year.
On the promo pre pandemic level of this segment our growth rate is a more than 100% across the segments include that except the project budget is more pointed out sometime back that is also recovering nicely now and then you know basis director your conversation with the industry and the partners that you can.
I'll add some data there are some reports on the supply side.
Which are neutral on the Occupancies. So you bring in all of that.
And into the calculation and based on your estimates that you think that you will be able to actually gain share in some of the majority of the the segments there'll be hotels. So that's really the basis of that comment.
And again, how we can get into details offline, but.
If you would want more color.
But that's the way we sort of looked at it.
Alright. My last question is around D. Generally I know you alluded to certain efficiencies around data and personalization and pulling product features but how do you think about the overall risk of disruption from.
Using this new technology, there or the whole travel booking process of.
<unk> selection becomes more conversational land.
Clearly disruption or disruptive to the way, it's being done correctly, just trying to understand all dumps of product innovations that could be a possibility at this point.
No. There's a huge possibility I mean this this technology per series a two hour assessment nodes looking really promising and if I may say so you know if there is any disruption that Don this technology is likely to cause we would want to lead that disruption and we're back toward only we actually did soft launch of our conversation.
<unk> and.
And right now.
There are two or three use cases, which are in the works, which we are working on with the focus that we want to improve the customer experience and more particularly relying on the better and robust language models to also.
Half of La which which is hybrid and that could help us reach too you know beyond 25 cities. If you will you know.
Literally penetrate deep into India or about it and that's really the focus the next level focus all soy is to leverage their technology.
And to also bring in some efficiencies and productivity gains in the system because I think there are areas on software development or in some of the other areas that we are still doing some work on where the prime office AUC Laura potential.
That if you do the deployment rate.
And then you should be able to get some gains but.
If I may just ask him an important sort of not carrier, but maybe an additional comment.
That it is going to be a journey and as you sort of deploying this technology. In every particular use case you will learn you will learn you'll get more insights than you will keep fine tuning it until the time that you get to a 100% accuracy. It is going to take some time, it's not and you know I'm pretty much happens with every technology, it's not next.
SLE overnight some gains you would be very visible to you. All you know really quick but for us for us to be able to see sustainable gains.
Whether it is overall cosmetic experience improvement or get on a serious amount of innovation disrupting the.
Status quo.
Or productivity gains.
<unk> ranked in all areas.
There is promise, but it's going to be a journey.
Alright, Tom all.
All the best prescription. Thank you. Thank you about them. Thank.
Thank you a lot of this was the last question that we had in the queue. If we have no more questions I'll hand over to Raj for his closing comments.
Well, thank you Robert and thank you everyone. Thank you for your time and thank you for your patience and thank you for the nice comments that you had mentioned there. Thank you.
Thank you everyone for joining the call you may please disconnect. Thank you.
Hi.