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Makemytrip continues with losses in air ticketing, reveals Q1 FY14 earnings release

Make-my-tripMakemytrip has recently released its Q1 FY14 earning release for the first fiscal quarter ended june 30. Just like the previous quarter results, the hotel business have again gained heights while the revenues from air ticketing business declined – despite being a 17% Y-o-Y increase in Gross bookings and higher airfares in the quarter.

The company registered a total revenue of $77.2 million – an increase of 40% over $55.1 million in previous quarter and 20.3% over $64.1 million in Q1,FY13. The revenue less service costs were recorded at $26 million registering a 8.9% Y-o-Y rise in the quarter.

Revenue from air ticketing business decreased by 11.4% to $15.2 million in the quarter from $17.2 million in similar quarter previous year. A possible reason for that could be the fierce competition and growth of other such players like Goibibo, Yatra, etc in the quarter.

As said in the previous report, the company’s CEO and founder Deep Kalra ‘once again’ gave the performance credit to their strong market leadership and ability to deliver superior customer experience.

Due to 48.6% increase in gross bookings and a 12.9% rise in Net revenue margin, the hotel and packaging arm of business maintained its profit trend, with a Y-o-Y growth of 33.4% to $61 million from $45.8 million in Q1 FY13.

The net loss for the quarter is recorded at $5.1 million, which is quite disappointing as compared to a net profit of $1.8 million in the quarter ended June 30, 2012.

However, the acquisition of Hotel Travel Group and ITC Group in the quarter ended December 31, 2012 is still paying makemytrip in its hotel and revenue business. Also the first quarter of FY14 for Makemytrip seemed to be started well with reports of exceeding one million mobile app downloads and launch of its first sms based bus ticket booking service.

For the current fiscal year, makemytrip reiterated full-year revenue less service costs growth guidance of 15-20 per cent on a constant currency basis, but adjusted the range to approximately $95 million to $100 million to account for the change in the Rupee exchange rate.. Earlier,  a guidance of $101 million to $106 million was given for FY14.

Moreover, Rajesh Magow, co-founder of Makemytrip who was holding the position of Chief Financial Officer since 2005 has been promoted to Chief Executive Officer-India on Wednesday. Company founder, Deep Kalra, will however remain Chairman & Group CEO. “This development enables me to devote more of my efforts on Strategy, M&A and international businesses…These leadership changes will set the stage for the next phase of growth for MakeMyTrip” said Deep.

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