20-F: MakeMyTrip Reports Robust Fiscal Year 2025 Performance Driven by Strong Travel Demand and Strategic Acquisitions

MakeMyTrip Limited announced a net profit of $95.3 million for fiscal year 2025, fueled by significant growth across its travel segments and strategic business expansions in India.

Summary

• MakeMyTrip reported a net profit of $95.3 million for fiscal year 2025, compared to $216.7 million in fiscal year 2024, with the prior year benefiting from a substantial deferred tax asset recognition.
• Total revenue increased by 25.0% (27.4% in constant currency) to $978.3 million in fiscal year 2025, up from $782.5 million in fiscal year 2024.
• Adjusted Operating Profit saw a significant increase, reaching $167.3 million in fiscal year 2025 from $124.2 million in fiscal year 2024.
• Gross bookings for fiscal year 2025 climbed to $9.8 billion, a notable rise from $8.0 billion in fiscal year 2024.
• The Air Ticketing segment's revenue grew by 20.0% (22.4% in constant currency) to $241.5 million, with flight segments increasing by 14.8% to 58.7 million.
• Hotels and Packages revenue rose by 19.5% (21.8% in constant currency) to $520.4 million, and room nights increased by 18.9% to 37.0 million.
• Bus Ticketing revenue expanded by 28.8% (31.1% in constant currency) to $119.4 million, with tickets booked growing by 22.7% to 106.5 million.
• Revenue from other businesses surged by 82.9% (86.7% in constant currency) to $97.0 million.
• The company strategically acquired a majority equity interest in Savaari Car Rentals Private Limited in December 2023 and a corporate travel and expense management business operating under the HAPPAY brand in February 2025.
• MakeMyTrip repurchased 236,012 ordinary shares for an aggregate amount of $21.7 million during fiscal year 2025.

Sentiment

Score: 8

Explanation: The company demonstrated strong operational and revenue growth across all segments, driven by robust travel demand in India. While net profit was lower than the previous year due to a one-time tax benefit in FY24 and increased finance costs, the underlying business performance, as reflected in Adjusted Operating Profit and Gross Bookings, was very positive. Strategic acquisitions and continued technology investments position the company well for future growth, despite ongoing competitive and regulatory challenges.

Positives

• Strong revenue growth of 25.0% (27.4% in constant currency) in fiscal year 2025, indicating robust underlying business performance driven by travel demand.
• Significant increase in Adjusted Operating Profit to $167.3 million in fiscal year 2025, up from $124.2 million in fiscal year 2024, demonstrating improved operational efficiency.
• Consistent growth across all core segments: Air Ticketing (14.8% increase in flight segments), Hotels and Packages (18.9% increase in room nights), and Bus Ticketing (22.7% increase in tickets booked).
• Successful strategic acquisitions of Savaari (car rental services) and HAPPAY (corporate travel and expense management), expanding the company's service offerings and market presence.
• Adjusted Margin % for Hotels and Packages marginally increased to 17.8% in fiscal year 2025, reflecting enhanced profitability in a higher-margin business segment.
• Adjusted Margin % for Bus Ticketing increased to 10.5% in fiscal year 2025, indicating improved segment profitability.
• Maintained a strong liquidity position with $763.3 million in cash and cash equivalents and term deposits as of March 31, 2025.
• Continued investment in advanced technologies like generative artificial intelligence and personalization to enhance customer experience and operational efficiency.
• Successful brand building initiatives and loyalty programs (MMTBLACK with 2.0 million enrolments, goTribe with 2.4 million enrolments) contributing to customer retention.
• Favorable resolution of several long-standing tax proceedings, including income tax matters for Assessment Years 2005-06 and 2011-12 (ESOP disallowances), and service tax demands for November 2013 to June 2017.

Negatives

• Net profit for fiscal year 2025 ($95.3 million) was significantly lower than fiscal year 2024 ($216.7 million), primarily due to a one-time $126.1 million deferred tax asset recognition in FY24 and an increase in net finance costs in FY25.
• Net finance cost was $3.9 million in fiscal year 2025, a shift from a net finance income of $27.7 million in fiscal year 2024, mainly attributed to a $30.6 million gain on convertible notes in FY24 and increased net foreign exchange losses in FY25.
• The company recorded an income tax expense of $20.6 million in fiscal year 2025, contrasting with an income tax benefit of $123.8 million in fiscal year 2024, due to the net reversal of deferred tax assets recognized in the prior year.
• Marketing and sales promotion expenses increased by 34.1% to $165.3 million in fiscal year 2025, reflecting intensified competition and higher discretionary spending on brand building.
• Other operating expenses rose by 13.2% to $231.9 million, driven by increased payment gateway charges, outsourcing fees, and distribution costs linked to higher booking volumes.
• Ongoing legal and tax proceedings, including significant service tax and GST demands, and a Competition Commission of India (CCI) penalty of $26.1 million, which is currently under appeal.
• Uncertainty regarding the recoverability of $20.9 million from Go First due to its liquidation, leading to an impairment provision of $10.0 million in FY24.
• The proposed merger of redBus India with MMT India, if approved, could lead to the non-utilization of $9.8 million in recognized deferred tax assets on carry-forward losses.

Risks

• Disruptions or adverse developments in the travel industry, such as geopolitical instability, terrorism, natural disasters, public health issues (e.g., pandemics), or supplier bankruptcies (e.g., Go First liquidation), could adversely affect business and financial performance.
• Adverse global economic conditions, including slow growth, increased unemployment, inflation, currency weakening, and trade tariffs, could impair consumer spending and travel demand.
• Inability to maintain existing and establish new arrangements with travel suppliers (airlines, hotels, GDS providers) or adverse changes in contractual terms could reduce revenue and Adjusted Margin.
• Reliance on third-party systems and service providers (GDS, central reservation systems, payment gateways) means any disruption or adverse change in their businesses could have a material adverse effect on operations.
• Failure to adapt to rapid technological developments (e.g., mobile e-commerce, artificial intelligence, cloud computing) or evolving industry trends could adversely affect competitiveness.
• Potential reduction or elimination of commissions and other fees from airline suppliers and GDS service providers for air ticket sales, which could negatively impact revenue.
• Inability to maintain or enhance consumer awareness and value of key brands (MakeMyTrip, Goibibo, redBus) could materially affect business, financial condition, and results of operations.
• International operations involve additional risks, including differences in regulatory requirements, consumer preferences, intellectual property enforcement, restrictions on earnings repatriation, and currency exchange rate fluctuations.
• Negative impact from changes in search engine logic or increased competition from meta-search platforms and AI chatbots, potentially reducing traffic to online platforms.
• Legal, business, and operational risks related to the use of artificial intelligence, machine learning, and automated decision-making, including potential for flawed algorithms, biased data, and reputational harm.
• Exposure to internal or external security breaches, data privacy violations, and non-compliance with evolving global privacy and data security regulations (e.g., GDPR, India's DPDP Act), leading to significant compliance burdens and potential liabilities.
• System interruptions or capacity constraints in information systems and infrastructure could harm business operations and customer service.
• Changing laws, rules, and regulations in India (e.g., Motor Vehicles Act, Consumer Protection Act, Digital India Act, FDI Policy, Competition Act, Digital Competition Bill) may adversely affect business, impose compliance costs, or restrict operations.
• Changes in tax laws, rules, and regulations, including adverse application thereof (e.g., India's GAAR, UAE's corporate tax legislation), may adversely affect business and financial performance.
• Substantial level of indebtedness, particularly the 2028 Notes, could limit financial and operating activities and adversely affect the ability to obtain additional financing for future operational needs.
• Inability to raise the necessary funds to meet payment obligations under the 2028 Notes, especially the February 15, 2026 repurchase option.
• Potential classification as a Passive Foreign Investment Company (PFIC) for US federal income tax purposes, which could result in adverse US federal income tax consequences to US Holders of ordinary shares.
• Potential treatment as a Foreign Financial Institution under the US Foreign Account Tax Compliance Act (FATCA), which may impose withholding requirements on payments on ordinary shares.
• Increased focus on Environmental, Social, and Governance (ESG) responsibilities may result in additional costs and risks if efforts do not meet evolving standards or stakeholder expectations.
• Climate change may have an adverse impact on business operations, including disruptions to travel, changes in consumer preferences, and increased compliance costs for climate-related disclosures.
• Reliance on assumptions, estimates, and data to calculate key metrics, where real or perceived inaccuracies could harm reputation and negatively affect business.
• Investors may face greater difficulties in protecting their interests and enforcing judgments against the company, its directors, and management due to differences in Mauritian and Indian legal frameworks compared to US law.
• As a foreign private issuer, the company follows certain home country corporate governance practices in lieu of Nasdaq requirements, which may afford less protection to holders of ordinary shares.
• The sale or availability for sale of substantial amounts of ordinary shares could adversely affect their market price.
• Future issuances of any equity securities, including upon conversion of Class B Shares and 2028 Notes, may decrease the trading price of ordinary shares and result in substantial dilution to existing holders.
• Provisions of the 2028 Notes could discourage an acquisition of the company by a third party, potentially depriving shareholders of an opportunity to sell at a premium.
• The holding company's ability to pay dividends relies principally on dividends and other distributions from operating subsidiaries, which are subject to limitations under Indian law and debt agreements.
• Failure to implement and maintain effective internal control over financial reporting may result in material misstatements in financial statements, requiring restatements and potentially eroding investor confidence.

Future Outlook

The company anticipates continued robust growth in online travel bookings in India, driven by increasing internet and smartphone penetration, and aims to expand its hotels and packages business, diversify service offerings, and invest in advanced technologies like generative AI to enhance customer experience and operational efficiency. The proposed merger of redBus India with MMT India is expected to further strengthen the combined business.

Management Comments

• "We plan to continue to drive synergies across our portfolio of multiple brands on the path of disciplined and financially sustainable growth while making appropriate investments to drive online penetration in various travel segments to support the long-term growth of our company."
• "Our objective is to pursue long-term market share growth opportunities and to grow profitably by building on our current position as one of India’s leading travel service providers."
• "We aim to increase our market share by investing in automation, adoption of new technologies and greater focus on customers."
• "We believe that our continued investments in technology will enable us to enhance our customer service and to capitalize on the expected growth opportunities in the online travel market in India."
• "We believe we are well positioned for growth in other overseas markets, particularly those with a significant non-resident Indian population."

Industry Context

The Indian travel industry is experiencing robust growth, fueled by an expanding middle-class, increasing internet and smartphone penetration (943 million internet subscribers, 460 million digital payment users as of April 2025), and a rapid shift towards digital adoption. The aviation sector in India is recovering significantly, with major domestic airlines placing orders for new planes, indicating increased future travel demand. The market remains highly competitive with established online travel agencies, traditional offline players, and new entrants, leading to increased marketing and sales promotion expenses. Geopolitical events, such as the war in Ukraine and the Israel-Hamas conflict, impact global oil prices, affecting the travel industry. Local incidents, like the terrorist attack in Jammu and Kashmir in April 2025, can cause temporary disruptions and affect travel confidence. Regulatory changes in India, including the DPDP Act and proposed Digital Competition Bill, are increasing compliance burdens for e-commerce businesses.

Comparison to Industry Standards

• MakeMyTrip is a leading travel service provider in India, estimating that nearly one in three domestic air passengers in India booked their air ticket through the company during fiscal year 2025.
• The company competes with major global and regional online travel agencies such as Agoda, Airbnb, Booking.com, Cleartrip, EaseMyTrip, Expedia, Ixigo, and Yatra, as well as traditional travel agencies and tour operators.
• The company's Adjusted Margin for hotels and packages (17.8%) is higher than for air ticketing (6.4%) and bus ticketing (10.5%), reflecting the greater value addition and complexity in the hotels and packages segment, which is a common trend in the online travel industry where hotel bookings typically yield higher margins than flight bookings.
• The company's investment in technology, including generative AI and automation, aligns with broader industry trends of leveraging advanced tech for personalized customer experiences and operational efficiency.

Management Changes

Corporate Governance

Legal Proceedings

• Multiple ongoing income tax assessment orders and appeals with Indian tax authorities for various assessment years (2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2021-22, 2022-23, 2023-24) related to transfer pricing, withholding tax, depreciation, advertising, ESOPs, and service tax. The company believes the likelihood of these claims being upheld is remote for most cases.
• Numerous ongoing demand orders and show cause notices from Indian service tax and Goods & Services Tax (GST) authorities for various fiscal years (2006-2012, 2008-2011, 2012, 2013, 2014-2016, April 2013-September 2015, November 2013-June 2017, May 2011-June 2017, 2010-2013, October 2015-June 2017, July 2017-March 2019, July 2017-March 2020, April 2018-March 2019, July 2017-March 2022, July 2017-March 2018, April 2018-March 2019, April 2019-March 2020, April 2020-March 2021, multiple years 2018-2021, July 2017-March 2018, April 2018-March 2019, April 2019-March 2020). The company believes the likelihood of these claims being upheld is remote for most cases.
• A writ petition filed by redBus India in the Delhi High Court seeks a declaration that section 93 of the Motor Vehicles Act, 1988, does not apply to its business and to quash notices from the Delhi Government for alleged MV Act violation. An interim order prevents adverse action against redBus India, with the next hearing scheduled for July 9, 2025.
• The Competition Commission of India (CCI) imposed an aggregate penalty of Rs. 2,234.8 million ($26.1 million) on MMT India and redBus India for alleged anti-competitive conduct and abuse of dominant position. The company has appealed this order to the National Company Law Appellate Tribunal (NCLAT), depositing Rs. 223.5 million ($2.6 million), with the final hearing scheduled for July 25, 2025.
• MMT India filed a trademark infringement action against Booking.com and Google LLC & Google India for using its brand keywords on Google Ads. An initial ad-interim injunction was granted but later dismissed on appeal by Google. The petition will proceed before the High Court of Delhi without interim protection.

Related Party Transactions

• Procurement of air tickets and hotel room nights from Trip.com and its subsidiaries amounted to $109.8 million in fiscal year 2025, with commissions earned of $0.3 million.
• Sale of air tickets and hotel room nights to Trip.com and its subsidiaries amounted to $19.7 million in fiscal year 2025, with commission expenses of $1.5 million.
• Revenue from marketing alliances with Trip.com subsidiaries was $1.7 million in fiscal year 2025.
• Operating expenses paid to Trip.com subsidiaries totaled $7.6 million in fiscal year 2025.
• Outstanding trade and other receivables from Trip.com subsidiaries were $2.8 million as of March 31, 2025.
• Outstanding trade payables to Trip.com subsidiaries were $6.0 million as of March 31, 2025.
• Advances given to and received back from Trip.com subsidiaries were $0.6 million each in fiscal year 2025.
• Repayment of loan received from Saaranya Hospitality Technologies Private Limited (equity-accounted investee) was $24,000 in fiscal year 2025, with interest income of $2,000.
• Purchase for car bookings from Savaari Car Rentals Private Limited (equity-accounted investee) amounted to $493,000 in fiscal year 2025, with commissions received of $43,000.
• Total compensation for key management personnel was $10.2 million in fiscal year 2025.
• Services from IQ EQ Corporate Services (Mauritius) Limited amounted to $8,000 for key management personnel services and $59,000 for consultancy services in fiscal year 2025.

Stakeholder Impact

• **Shareholders**: Positive impact from strong revenue and Adjusted Operating Profit growth, and the ongoing share repurchase program. However, there is potential for dilution from future equity issuances (Class B conversions, 2028 Notes) and risks from ongoing legal and tax proceedings, as well as potential adverse regulatory changes.
• **Employees**: Benefit from annual wage increases and continued share-based compensation, along with opportunities for growth and development within the expanding business.
• **Customers**: Experience enhanced travel services through expanded offerings (e.g., Savaari, HAPPAY), improved technology (AI, personalization), and loyalty programs. However, they may face potential disruptions from supplier issues (e.g., Go First liquidation).
• **Suppliers**: Benefit from strengthened relationships and increased transaction volumes facilitated by MakeMyTrip's platforms. They may be impacted by changes in commission structures or increased competition within the industry.
• **Creditors**: The company's strong cash position and liquidity provide confidence in its ability to meet debt obligations, including the 2028 Notes, reducing credit risk.

Next Steps

• Continue to pursue long-term market share growth opportunities and grow profitably.
• Expand Hotels and Packages business by investing in automation, new technologies, and customer focus.
• Increase market share by enabling more hotel suppliers to connect seamlessly to platforms using direct connects, channel managers, and direct integrations.
• Grow packages business outside India through strategic partnerships and acquisitions.
• Expand service and product portfolio to enhance cross-selling opportunities, including alternative accommodation, activities, multi-modal transportation, and travel offerings across regions.
• Enhance service platforms by investing in advanced technologies such as generative artificial intelligence, AI-driven personalization, and intelligent automation.
• Continue to focus on increasing online and mobile customer base, strengthening analytics, and upgrading technology platforms.
• Seek NCLT and other regulatory approvals for the proposed merger of redBus India with MMT India.
• Monitor and respond to evolving regulatory requirements, including the DPDP Act and proposed Digital Competition Bill.
• Manage and mitigate risks related to cybersecurity threats and data privacy regulations.
• Continue to monitor strategic partnerships and acquisitions in the future.

Key Dates

Recommendation

Keywords

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