MakeMyTrip (MMYT) Q2 2027 Earnings Call Transcript

MakeMyTrip reported Q2 FY2027 gross bookings of $2.7 billion, up 20.9% year over year in constant currency, and adjusted operating profit of $46.2 million, up 13.8%; adjusted net profit before tax rose 27% to $46.2 million. Hotels and packages adjusted margin grew 20.2%, bus ticketing margin rose 29%, and nonair business mix increased to 63.2%, while air travel faced weaker demand and 25%-30% higher average fares; adjusted operating margin eased to 1.7% of gross bookings from 1.8%. Management cited West Asia tensions, high aviation fuel costs and rupee depreciation as headwinds, while highlighting Myra AI conversion rates of 1.7x overall and 2.1x in tier 2 and tier 3 cities. The company ended the quarter with $815 million in cash and deployed $17.2 million on share buybacks; the proposed India IPO remains subject to regulatory approvals and market conditions.

Analysis

The key quality-of-growth signal is mix, not headline bookings: hotels, buses and ancillary services are taking a larger share while air remains a large exposure. That can improve contribution economics, but it does not yet prove consolidated operating leverage: adjusted operating profit grew more slowly than gross bookings, marketing intensity rose, and margin per gross booking fell. Treat management’s expectation that the air processing-cost mismatch will narrow as conditional on both fare normalization and transaction recovery—not as a committed margin catalyst.

Over 1–3 months, monitor domestic departures, airfare trends, marketing as a share of bookings, and operating profit relative to gross bookings. A recovery in air volumes could restore operating leverage; continued capacity constraints or elevated fares could keep demand weak even if the cost mismatch eases. Domestic hotels and bus routes may capture some substitution, but bus growth partly reflects added inventory and should be tested for repeat demand and unit economics. Management’s claim of stable competitive intensity is not independently verified.

The AI data are encouraging product signals, not yet evidence of material earnings contribution: users who invoke Myra may already be more engaged, and the disclosed conversion comparisons do not establish incremental profit or lower support costs. The strategic value is defensibility of bookable supply and servicing; the risk is that third-party assistants control discovery while MMYT bears fulfillment costs. Over 6–18 months, verify AI-driven incremental bookings, repeat rates, and support-cost savings. The India subsidiary IPO may be a catalyst, but timing, approvals, and the eventual relationship between listings remain unresolved, so a holding-company discount could persist.

Key Decisions for Investors

• Prefer a watchlist/add-on-weakness stance in MMYT rather than chasing the results: the non-air mix supports resilience, but valuation and price data are not provided. Reassess after the next results for sustained operating-profit growth and stabilization of profit as a share of gross bookings.
• Track a 1–3 month catalyst set: domestic and international departure trends, airfare/ATF conditions, and marketing spend. Upgrade the thesis if air volumes recover and processing-cost pressure eases without a material increase in customer acquisition spend; reduce conviction if weak traffic persists and operating leverage deteriorates.
• Treat Myra as an option on better conversion and service productivity, not a standalone earnings driver yet. Seek evidence of incremental bookings versus comparable non-users, repeat behavior, and lower support cost before assigning material value to the AI narrative.
• Monitor the India IPO process as a potential catalyst, not a near-term base case. Verify regulatory progress and proposed listing/fungibility structure; a prolonged delay or unclear path to address the dual-listing discount would weaken the re-rating case.