MakeMyTrip's merger with Ibibo Group means that profitability is "closer now than before," but growth still dominates the corporate agenda.
Deep Kalra, group chairman and CEO, told analysts on this week's earnings call:
"I don't think we're in the space where we're going to give a premium right now to turning profitable over growth. Growth remains our top-most priority, especially in hotels and if we keep seeing growth coming in like we have reported we are not in the mindset to stop that."
The transaction is due to complete at the end of the year. Synergies will come quickly after completion, he said.
In the July-to-September quarter, its standalone domestic hotel business performed strongly, with MakeMyTrip now having a market-leading share of 27% of India's online bookings. Kalra was keen to point out that there is a massive tailwind here, as currently only between 12-15% of hotels are booked online.
So in the quarter — which is traditionally India's quietest period for travel — hotel transactions were up by 293%, at nearly 1.4m, of which more than one million were made by mobile, a 453% increase on the same period last year.
The mobile landscape generally is, Kalra noted, another tailwind for its business, with 4G now being rolled out across India in conjunction with better pricing for data access. MakeMyTrip's cumulative downloads of its apps is now 27.5 million, 4.5 million more than at the end of March. Active monthly users are also up to 5.4 million.
Some analysts were interested in international hotels, with Kalra admitting that its international hotels business was "still small." However, it has targeted 20 key overseas cities, popular with Indian travellers, to focus on, as it looks to build this business line.
A few weeks before the Ibibo announcement, MakeMyTrip launched Rightstay, a new brand focussed on alternative accommodations. Kalra told analysts that this would be "a large growth driver for years to come" and that it already has 9,000 bookable properties available.
He added that RightStay had been launched as an app-only business but was now also available on desktop. He admitted that it is currently getting only 100 bookings a day but was improving all the time.
Another analyst asked for an update on easytobook.com, the Amsterdam-based hotel booking site it bought for a reported $5 million at the start of 2014 before moving a lot of its operations back to India at the end of 2015.
The response was that easytobook is "not material" in terms of MakeMyTrip's overall hotel business.
Despite the focus on hotels, air is still a big part of MakeMyTrip's business. Its domestic air bookings were up 35%, year-on-year, compared with the overall market growth of 24%. And 49% of its domestic flight bookings are made on mobile.
Overall, revenues for the three months to end-Sept came in at $83.1 million, up from $65.5 million a year earlier. Its net loss came in a $39.4 million, compared with $12.2 million — mainly due to the sales and marketing costs associated with growing the business. It spent $48.4 million in the quarter compared with $14.8 million last time.
Related reading from Tnooz:
MakeMyTrip merges with Ibibo Group to create Indian giant with Chinese flavour (Oct16)
MakeMyTrip expands Indian business into Airbnb territory (Oct16)