Makemytrip Q3 Earnings Call: Growth, AI, and Headwinds

Makemytrip Limited ((MMYT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Makemytrip Delivers Strong Q3 Despite Air Travel Disruption

Makemytrip Limited’s latest earnings call struck an overall upbeat tone, with management emphasizing robust demand across hotels, buses and ancillaries, strong market-share gains in air ticketing, and a landmark quarter for profitability. While the company faced a notable December disruption in domestic air capacity due to new pilot duty rules and continued non‑cash financing and FX headwinds, executives remained confident these are temporary issues. They highlighted diversified growth drivers, aggressive product and AI innovation, and active capital returns as key offsets that underpin a constructive outlook.

Broad-Based Recovery Fuels Strong Quarterly Volumes

Management reported a solid Q3 performance, driven by a strong October–November leisure season and resilient demand across key travel categories. Accommodation volumes rose 20.3% year-on-year, with standard hotels growing 20.6%. The non‑premium hotel segment was particularly robust, with room nights expanding more than 23% year-on-year, underscoring Makemytrip’s deepening penetration into mass-market travel. This broad-based volume growth indicates that underlying travel demand remains healthy despite macro noise and one-off disruptions.

Air Ticketing Margins Expand as Market Share Edges Higher

In air ticketing, Makemytrip continued to gain ground despite industry headwinds. Adjusted air ticketing margin reached $207.9 million, up 20.4% year-on-year in constant currency. Domestic air volumes grew 2.2% year-on-year versus industry growth of just 0.9%, translating into a modest market share gain on a flown basis to just over 31%. These trends suggest the platform is consolidating its position in domestic aviation even in a challenging supply environment, reinforcing the stickiness of its customer base and its pricing and distribution strengths.

Profitability Reaches New Milestone

The quarter marked a key inflection point for profitability, with adjusted operating profit surpassing $50 million for the first time, reaching $50.7 million. Adjusted net profit stood at $51.4 million, and adjusted diluted EPS rose by roughly 33% year-on-year, indicating solid bottom-line momentum. This performance demonstrates that the business is scaling profitably, balancing growth investments with disciplined monetization and efficiency gains across its portfolio.

Bus and Ancillary Businesses Deliver High Growth

Makemytrip’s diversification into buses and other travel-related services continued to pay off. Bus ticketing delivered a consistent adjusted margin of $42.4 million, representing more than 26.1% growth year-on-year in constant currency. The “other” segment, which includes various ancillaries, posted an adjusted margin of $27.5 million, up 45.5% in constant currency. These high-growth adjacencies not only diversify revenue but also help smooth volatility from the more cyclical or regulation-sensitive air segment.

AI-Powered Product Innovation Takes Center Stage

AI and product innovation were a major focus on the call. The company’s conversational AI assistant, Myra, has scaled to more than 50,000 conversations per day, with around 72% of interactions rated as “good” and roughly 15–24% of usage happening in early trip planning stages. Notably, over 45% of Myra’s users come from tier‑two cities and beyond, underscoring its role in democratizing digital travel services. Across support channels, AI chat and voice now resolve about 50% of customer queries autonomously. New GenAI-driven features—such as beachfront tagging and women-specific safety scores—are being rolled out to enhance discovery and trust, positioning Makemytrip as a product-led, technology-first travel platform.

Expanded Product Range and Supply Footprint

The company continued to broaden its inventory and geographic reach. It launched a tours and activities vertical with over 200,000 bookable activities across 1,100 cities in 130 countries, adding a rich layer of in-destination experiences to its platform. On the stay side, Makemytrip now lists more than 97,000 accommodation options across over 2,050 cities and sold properties in 1,950+ cities during the quarter. This growing supply footprint supports higher conversion and better choice for travelers, while also deepening the company’s network effects.

Homestays and Holiday Packages Gain Traction

Homestays and holiday packages emerged as important growth vectors. The homestay business sold over 27,600 unique properties across more than 1,050 cities and now contributes an early double-digit share of overall hotel volumes, signaling strong consumer acceptance of alternative accommodations on the platform. The company also ramped up chartered flight packages—such as those to Phu Quoc—unlocking new outbound destinations and creating differentiated, higher-margin bundled offerings that can deepen customer engagement.

Corporate Travel and Integrated Solutions Strengthen

In corporate travel, Makemytrip’s MyBiz platform saw active corporate customers rise to over 77,500, up from 64,000 a year earlier, while Quest2Travel’s active customer base increased to 539 from 493. The completed integration with expense management platform Happay has created a combined travel-and-expense solution, offering corporates a more seamless workflow. This integration enhances Makemytrip’s value proposition in the business travel segment and could support stickier relationships and higher wallet share over time.

Capital Returns Underscore Balance Sheet Strength

The company continued to return capital to shareholders while maintaining a strong liquidity profile. During the quarter, Makemytrip deployed approximately $46.1 million under its buyback program, repurchasing about 550,000 shares for roughly $41.5 million and buying back around $4.6 million of its 2030 notes. The company ended the quarter with more than $100 million in cash equivalents, and had previously increased the total buyback authorization to $200 million. This combination of active capital return and solid cash reserves sends a confidence signal in the sustainability of its cash generation.

December Flight Disruptions Hit Peak-Season Air Volumes

A key negative in the quarter was the sharp disruption in domestic air supply in December caused by newly implemented, stricter pilot flight duty time limitation (FDTL) rules. Instead of the expected 5% year-on-year growth in daily departures for the month, the market saw a roughly 5% decline, materially impacting peak-season bookings, particularly in early December. Management acknowledged that this has pushed full supply recovery into the next fiscal year, creating some near-term uncertainty for air growth despite strong consumer demand.

Airline Capacity Cuts Add to Near-Term Uncertainty

Beyond the FDTL-related disruption, airline capacity reductions weighed on visibility. IndiGo was asked to cut around 10% of its capacity, adding to domestic supply weakness and limiting the pace of recovery in flights. Management now expects only modest, low single-digit growth in daily departures in the near term, implying that air ticketing growth will have to rely more on continued market-share gains and international or non-air segments until domestic capacity normalizes.

GST Change Creates Optical Drag on GBV Growth

Makemytrip’s reported gross booking value (GBV) growth was distorted by tax changes in the hotel segment. The GST rate on hotel rooms under ₹7,500 was reduced from 12% to 5%, lowering the tax component embedded in GBV. As a result, GBV grew about 15.8–15.9% year-on-year, lagging the 20.3% growth in accommodation volumes. Management stressed that this is an “optical” effect rather than a demand issue and will create a visible divergence between strong underlying volumes and moderated GBV and revenue growth metrics for the next few quarters.

Non-Cash Financing and FX Costs Compress Reported Earnings

Reported profitability was also affected by non-operational items. The company booked a non‑cash interest charge of $28.3 million on its zero‑coupon convertible bonds and incurred approximately $5.3 million in translation-related foreign currency losses due to rupee depreciation. These items pulled down reported net profit to $7.3 million, contrasted with adjusted net profit of $51.4 million. Management highlighted these as accounting and currency effects rather than indicators of underlying business weakness.

Margin Expansion Remains Measured Amid Growth Investments

Despite strong top-line momentum, adjusted operating margin improved only modestly, from 1.76% to 1.82% of GBV. Management explained that the current business mix and ongoing reinvestments in growth—particularly in product, technology, and newer segments—limit near-term operating leverage. With fixed costs forming a relatively small share of the cost base, the company’s margin structure is more influenced by segment mix and strategic investments than by simple scale effects, suggesting a conscious choice to prioritize durable growth over maximum short-term margin expansion.

Higher Marketing Spend Reflects Changing Mix

Marketing and sales promotion expenses stood at 5.6% of GBV in the quarter, higher than historical sub‑5% levels. The company tied this to seasonality and a mix shift toward segments with higher customer acquisition costs, such as newer categories and deeper penetration in non‑metro markets. While elevated marketing spend weighs on near-term margins, management framed it as a strategic investment to cement market position and fuel future growth.

Guidance: Solid Growth Trajectory with Near-Term Air Constraints

Looking ahead, Makemytrip guided to a mixed but broadly constructive near-term outlook. After domestic daily departures grew about 25% year-on-year in October–November and then fell 5% in December due to the new FDTL rules, the company now expects flat to roughly 1–2% year-on-year daily departure growth in the current JFM quarter, with full supply normalization likely pushed into the next fiscal year. Management cautioned that GST rationalization will impose an optical drag of about five percentage points on hotel GBV growth for the next four quarters, even as hotel volumes continue to grow strongly. Strategic priorities include scaling AI (with Myra already at 50,000+ daily conversations and resolving around half of customer queries), expanding supply in hotels and buses (private bus inventory above 45,000 daily schedules versus 40,000 last year), and sustaining healthy adjusted margins in air, bus, and other segments. The company intends to maintain marketing spend around current levels while continuing its enlarged buyback program and preserving a strong cash position, even as it invests in AI and other strategic opportunities.

In sum, Makemytrip’s earnings call painted a picture of a travel platform that is scaling profitably and innovating rapidly, even as it navigates regulatory and capacity-related bumps in domestic aviation. Robust hotel, bus, and ancillary growth, coupled with market-share gains and a landmark quarter for adjusted profitability, offset temporary air supply disruptions and accounting headwinds. For investors, the story remains one of strong underlying demand, expanding product breadth, and disciplined capital allocation, with near-term optics in air capacity and GBV unlikely to derail the company’s longer-term growth trajectory.