NEW DELHI: MakeMyTrip Inc, Indias largest online travel operator, reported a narrower first quarter loss as it cut back on promotional expenses, along with a corresponding rise across its three major business segments.
For the quarter to June, the Nasdaq-listed company reported a net loss of $51.2 million, or 50 cents a diluted share, down from $68.4 million, or 70 cents a diluted share a year ago. Adjusted net loss for the quarter came in at $38.1 million, or 37 cents a share, compared with $52.1 million, or 53 cents a share.
The companys sales and marketing promotional expenses fell more than half to $55.9 million, from $133 million in the year-ago period.
Revenue for the quarter was $137.4 million, compared to $192.1 million a year ago. The company said the decline in revenue was primarily due to the adoption of a new revenue recognition standard, IFRS 15, wherein promotion expenses, which were previously recorded as marketing and sales promotion costs, were now being recorded as a reduction of revenue.
On an adjusted basis, revenue increased more than 20% to $170.1 million, from $141.2 million in the year-ago period. Air ticketing revenue rose 19% to $54.4 million, while hotels and packages revenue went up more than 15% to $93.8 million during the period, also on an adjusted basis.
As of June 30, 2018, MakeMyTrips cash and cash equivalents and term deposits stood at $355.9 million.
In a conference call with analysts, company executives said that MakeMyTrips partnership with Indias largest online retailer, Flipkart, was beginning to show early results and the company was looking to expand the number of products on both platforms.
“The good news is, from the numbers that we have seen so far, is that we are getting a new set of customers, and not necessarily cannibalising. That is the hypothesis and its working out well,” said MakeMyTrip India CEO Rajesh Magow.
In April, both companies, which are also Indias largest consumer internet companies, entered into a strategic partnership that marked the entry of Flipkart into Indias online travel segment that is projected to touch $48 billion by 2020, growing at an annual compounded rate of 11-11.5%.
Under the terms of the partnership, the tie-up between Walmart-owned Flipkart and MakeMyTrip makes three of the latters primary brands – MakeMyTrip, Goibibo and redBus –available to consumers. Correspondingly, all the three brands are also accessible to Flipkarts consumer base, which is estimated at over 100 million.
Additionally, in July, Flipkart had introduced a recharge tab in its mobile app, which redirects users to its payments platform, PhonePe, pitting it directly against Alibaba-backed Paytm, as companies in consumer internet business are looking to tap into high-frequency purchases.
“Its early days yet, but we have seen some early traction to start with, with PhonePe, as well as on the MakeMyTrip tab on Flipkart,” Magow said. “The idea was to ride on the reach that they (Flipkart) have in tier-3 and tier-4 cities, given the categories they operate in. The number of products that they have is very wide-ranging.”
Shares of MakeMyTrip were trading almost flat at $32.88, in morning trade on Tuesday on Nasdaq.