"Rajesh Magow commented: "Fiscal year '24 started on a positive note and only got better over the year, ending with strong Q4 performance, despite it being a low seasonality quarter for leisure travel."" - Rajesh Magow
MakeMyTrip Limited (NASDAQ: MMYT) delivered robust Q4 2024 results despite being a historically low season for leisure travel. The company reported a significant increase in gross booking value reaching $2 billion, a 23% year-over-year growth, maintaining momentum from a strong recovery trajectory post-pandemic. Net income soared to $172 million, reflecting an extraordinary 2,937% increase year-over-year, bolstered by a decrease in income tax expense through recognized deferred tax assets. This performance demonstrates the operational efficiencies and market share advancements executed by the management team, showcasing MakeMyTrip's resilience despite external and seasonal pressures. Management credits two key drivers for the ongoing success: an innovative approach towards customer engagement and an expansion in non-air travel services.
Key Performance Indicators
Revenue
202.89M
QoQ: -5.29% | YoY:36.60%
Gross Profit
99.80M
49.19% margin
QoQ: -34.28% | YoY:-5.58%
Operating Income
16.54M
QoQ: -26.96% | YoY:47.90%
Net Income
172.01M
QoQ: 608.97% | YoY:2 936.90%
EPS
1.54
QoQ: 600.00% | YoY:2 980.00%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $202.9 million for Q4 2024, a 38.1% year-over-year increase.
**Net Income:** $172 million in Q4 2024 with a remarkable year-over-year growth of 2,937%.
**Gross Profit Margin:** Maintained at 49.2%, showcasing effective cost management.
**Cash Position:** Ended the quarter with $327 million in cash and cash equivalents, indicating strong liquidity.
**Operating Cash Flow:** Net cash provided from operating activities was $18.9 million.
Financial Highlights
Financial Performance Highlights:
- Revenue: $202.9 million for Q4 2024, a 38.1% year-over-year increase.
- Net Income: $172 million in Q4 2024 with a remarkable year-over-year growth of 2,937%.
- Gross Profit Margin: Maintained at 49.2%, showcasing effective cost management.
- Cash Position: Ended the quarter with $327 million in cash and cash equivalents, indicating strong liquidity.
- Operating Cash Flow: Net cash provided from operating activities was $18.9 million.
- Debt/Equity Ratio: 0.19, showing low leverage and a strong balance sheet.
- EPS (Basic): $1.54, up from $0.05 YoY, showcasing improved earnings power.
Management highlighted the strategic investments in technology and targeted marketing that have allowed the company to lower sales and marketing expenses relative to gross bookings, from 5.1% to 4.7%. Additionally, the diversification of revenue sources via ancillary services and strategic partnerships with state governments in India positions the firm for long-term growth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
202.89M
36.60%
-5.29%
Gross Profit
99.80M
-5.58%
-34.28%
Operating Income
16.54M
47.90%
-26.96%
Net Income
172.01M
2 936.90%
608.97%
EPS
1.54
2 980.00%
600.00%
Key Financial Ratios
currentRatio
2.88
grossProfitMargin
49.2%
operatingProfitMargin
8.15%
netProfitMargin
84.8%
returnOnAssets
10.4%
returnOnEquity
15.9%
debtEquityRatio
0.23
operatingCashFlowPerShare
$0.17
freeCashFlowPerShare
$0.11
priceToBookRatio
7.37
priceEarningsRatio
11.57
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Growth Strategy: Rajesh Magow stated, "Our strategy of targeting various demand segments to serve millions of our customers has delivered significant results, with gross booking value for Q4 at over $2 billion." Market Trends: Magow emphasized, "Spiritual tourism is emerging as a significant driver, showing over 97% growth in searches for spiritual destinations on our platform in the last two years. This category can potentially grow at a CAGR of over 16% between '23 and '30." Operational Efficiency: Mohit Kabra noted, "Our marketing expenses saw a reduction due to better operational leverage as sales became more efficient, which is key to maintaining margins."
Rajesh Magow commented: "Fiscal year '24 started on a positive note and only got better over the year, ending with strong Q4 performance, despite it being a low seasonality quarter for leisure travel."
— Rajesh Magow
Mohit Kabra remarked: "We do have good cash surpluses now and therefore we would be open to pursuing opportunistic buybacks, especially to mitigate dilution from our share-based compensation programs."
— Mohit Kabra
Forward Guidance
Looking ahead, MakeMyTrip’s management is optimistic about the travel market's recovery, projecting sustained growth driven by rising disposable incomes and increased online penetration in travel services. The company is poised for a significant push in international outbound travel, with initiatives to simplify visa processes and target Indian travelers abroad. Management aims to augment supply across all segments, particularly hotels and packages, aligning with trends towards experiential travel. Key factors investors should monitor include:
- Performance metrics from upcoming quarters, especially related to seasonally high periods such as summer holidays.
- Updates on macroeconomic conditions affecting travel, such as potential shifts in disposable income or travel habits due to economic factors.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
MMYT Focus
49.19%
8.15%
15.90%
11.57%
TOUR
74.70%
-1.23%
-12.80%
-1.10%
MOND
69.50%
-5.98%
-32.50%
-4.25%
AMADF
30.80%
24.30%
6.15%
25.46%
TNL
93.90%
20.40%
-14.10%
5.47%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Considering the indicators outlined, MakeMyTrip Limited presents a robust investment opportunity driven by strong revenue growth, significant improvements in profitability, a healthy balance sheet, and continued expansions into emerging markets. The long-term outlook is supported by the travel sector's recovery post-COVID-19. Active monitoring of operational efficiency advancements and dynamic market conditions will be crucial for potential investors in aligning their strategies with MakeMyTrip’s growth objectives.
Key Investment Factors
Growth Potential
The demand for travel in India remains strong, particularly in the segments of leisure and outbound tourism, supported by the growing middle class and increasing disposable incomes. Management expects to capture more market share through technological enhancements and personalized service offerings.
Profitability Risk
Potential risks include ongoing supply chain disruptions in air travel, competition from domestic and international travel firms, and regulatory challenges. Fluctuations in oil prices could also impact operating costs for transportation services.
Financial Position
MakeMyTrip maintains a healthy balance sheet with a low debt-to-equity ratio of 0.19, enabling it to execute long-term strategies without excessive leverage or financial strain. Liquidity is strong with over $327 million in cash, which positions the company well for strategic investments and potential share buybacks.
SWOT Analysis
Strengths
Strong brand recognition in India’s travel market.
Diversified product offerings beyond air travel, including hotels, packages, and bus services.
Strong cash position enabling flexibility for investments.
Weaknesses
Vulnerability to seasonal fluctuations in travel demand.
Relatively high operating expenses in proportion to revenue in certain quarters.
Opportunities
Significant potential growth in spiritual and domestic tourism.
Expansion into new international markets and direct contracting for hotels.
Leveraging technological advancements in customer experience.
Threats
Competition from both domestic and international travel services companies.
Economic downturns affecting consumer spending on travel.
Regulatory changes impacting operations in various regions.