MakeMyTrip Ltd

NASDAQ:MMYT

Earnings Call Analysis

Strong Growth Despite Challenges

The company began fiscal 2025 with record quarterly bookings, revenue, and adjusted operating profit. Gross bookings hit over $2.4 billion, a 22% year-on-year increase, and adjusted operating profit grew by about 30% to $39.1 million. The newly simplified MMT Black loyalty program showed improved operational metrics and added value for customers. Despite the late start of the leisure travel season due to elections, both international and domestic air travel sectors exhibited robust growth. Cash reserves stand healthy at $676 million, enabling further investments. The company plans to maintain a balanced approach to marketing expenses while focusing on long-term growth strategies.

Introduction: A Record-Breaking Quarter

The company has kicked off fiscal year 2025 with a bang, achieving the highest quarterly gross bookings, revenue, and adjusted operating profit ever recorded. Despite the initial slowdown in leisure travel due to general elections in April, the company's gross booking value surged past $2.4 billion, marking a 22% year-over-year growth in constant currency terms. Adjusted operating profit also saw a significant increase, reaching $39.1 million, a 30% gain from the previous year. This impressive performance illustrates the success of their comprehensive strategy which includes diversified travel products and customer loyalty programs.

Economic Tailwinds and Consumer Behavior

India's robust economic growth is proving to be a substantial tailwind for the company. With the disposable income of the growing upper middle class on the rise, there's been a boost in discretionary spending including in travel and tourism. Moreover, the general shift towards more breaks throughout the year and flexible working arrangements is fueling higher travel frequency. Additionally, the growing younger generation, with its different approach to work-life balance, is driving this trend. The company is well-positioned to capitalize on these behavioral changes.

Detailed Financial Performance

The financial metrics for the first quarter of 2025 are particularly robust. Gross bookings were reported at $2.4 billion, showcasing a 21.6% year-on-year growth. Revenue reached $54.5 million, representing a substantial growth of 31.5% year-over-year. The air ticketing segment alone reported $1.4 billion in gross bookings, witnessing a 17% year-on-year growth. The international air ticketing business was a standout area, posting over 37% growth in constant currency terms. Meanwhile, revenue from the Digital and Packages segment hit $611.3 million, with a 24.7% year-over-year growth and a 29.6% increase in adjusted margins. The bus ticketing business also contributed strongly, growing at 15.9% year-over-year with gross bookings of $316 million.

Margins and Operating Efficiency

Improved profit margins were witnessed across various segments. The air ticketing adjusted margin stood at $89.1 million, a 21.2% increase from the previous year. In the Digital and Packages segment, the adjusted margin clocked in at $107.3 million, a 29.6% growth year-over-year. Bus ticketing showed a margin of $32.4 million, up by 20.7%. These gains have been driven by a combination of higher-margin business segments and improved operating cost efficiencies, including personnel and sales expenses.

Market Position and Competitive Landscape

The company appears to be successfully holding its own in a highly competitive market. They've continued to gain market share across all segments, growing faster than industry averages. With effective brand campaigns and technological investments, the company is also seeing strong traction in its corporate travel business. For example, the corporate customer count for their myBiz platform has exceeded 59,700, and for Quest2Travel, it has reached 458 large corporates.

Forward-Looking Strategy and Investments

Looking ahead, the company plans to leverage its robust cash flow, which added $42.9 million during the quarter, for organic and inorganic growth opportunities. This cash influx brings their total cash and cash equivalents to $676 million. While there were no stock repurchases in the reported quarter, they remain committed to opportunistic share repurchases if the conditions are favorable.

Guidance for Future Margins

The company expects the margins to remain strong throughout FY '25, particularly in seasonally stronger quarters like Q1 and Q3. They anticipate maintaining overall profit margins close to 1.6% for the fiscal year, with aspirations of gradually increasing this to 1.8-2% over the next three to five years. This guidance is based on expected industry recovery and consistent operating leverage.

Conclusion: A Promising Outlook

The company is starting FY 2025 on a solid footing. With strategic investments, a strong economic backdrop in India, and evolving consumer behavior favoring travel, the company is well-positioned to continue its upward trajectory. Investors can look forward to further growth driven by robust financial performance, strategic market positioning, and effective cost management strategies.

Earnings Call Transcript 2025-Q1

[Vipul Garg, executive]

Our website shortly after the conclusion of today's event. At the end of these prepared remarks, we will also be hosting a Q&A session. Furthermore, certain statements made during today's event may be considered forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are subject to inherent uncertainties and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances. Additional information concerning these statements is contained in the Risk Factors and forward-looking statements such as company's annual report on Form 20-F filed with the SEC on July 2, 2024. A copy of these filings are available from the SEC or from the company's Investor Relations department.

I would like to now turn the call over to Rajesh for his remarks. Over to you, Rajesh.

[Rajesh Magow, executive]

Thank you, Vipul. Welcome, everyone, to our first quarter call for fiscal 2025. We are pleased to share that we've started the financial year on a strong note with the highest ever quarterly gross bookings, revenue and adjusted operating profit with robust growth across all our businesses. We delivered these strong numbers despite the late pickup of the season for leisure travel due to general elections in April. Gross booking value for Q1 was more than $2.4 billion with growth of 22% year-on-year in constant currency terms, and the adjusted operating profit was $39.1 million, registering a growth of about [ 30% ] year-on-year. Our strategy of catering to various travel use cases and targeting different demand segments on multiple customer touch points is helping us deliver sustained growth. A wide spectrum of travel products is also helping us increase our share of the wallet of Indian travelers overall travel spend. We now have a lifetime transacted user base of 75 million across all our 3 brands to build strong -- to build stronger loyalty. We relaunched our flagship loyalty program, MMT Black with simplified 2 tiers, and with new benefits such as guaranteed room upgrades and meal upgrades for participating hotels and homestays, immediate myCash credit post-booking and no cap on the number of times, 1 can avail discounts on flight add-ons such as 0 cancellation, in flight meal, free date change, et cetera. Although it is early days of the new MMT Black program rollout, we have already seen improvement in the operating metrics compared to the earlier version indicating better value for our Black customers.

On macroeconomic front, India's robust economic growth has boosted the disposable income of -- it's growing upper middle class leading to higher disposable income in their hands. As a result, there is a visible increase in spending on discretionary services, including travel and tourism. On the other hand, the lower middle class is also a growing number, acting as a booster for domestic travel. Besides, the increasing number of households headed by the younger generation is helping drive a cultural shift towards taking more breaks in a year. The rise of flexible working arrangements has also influenced travel behavior. Many people are combining work and leisure through locations and extended stays in different locations. The shift in work culture allows individuals to travel more frequently without compromising their professional responsibilities.

As per our McKenzie report, India is currently the world's sixth largest domestic travel market by spending with growing middle class power in travel spending, growth of roughly 9% per year. India's domestic market could overtake Japan's and Mexico's to become the world's fourth largest by 2030. Domestic air passenger traffic in India is projected to double by 2030, boosted by government initiatives to build infrastructure and connect underserve domestic airports.

Let me now turn to the business segment starting with our air ticketing business. A positive development in this quarter was international outbound travel. As reported earlier, international outbound travel recovered fully in fiscal year '24, but in this quarter, we witnessed robust growth of 25% year-on-year in the international air segments. It now contributes over 37% to our air ticketing revenue. Long-term outlook on outbound travel from India is also very positive with fast-growing pools of first-time tourists. In any short-haul and long-haul destinations are investing to increase their awareness for Indian tourists considering India a very important source market. A couple of emerging destinations like Turkey and Kazakhstan, the number of Indian tourists have significantly grown and touched new highs. For Kazakhstan, India is now the third largest source market witnessing a threefold increase in Indian tourists compared to 2021. For Turkey, the number of tourists from India has surged 34% in the first 5 months of 2024 compared to same period last year. We continue to invest in this opportunity and aim to increase our share of revenue from this segment over the years. In the domestic air market, the supply situation improved marginally. The total number of domestic departures saw a slight increase in Q1 compared to the previous quarter. We expect the domestic supply situation to improve further from the second half of the financial year. The growth in the domestic air market continues to be muted. On a flow basis, the market grew by 4.5% year-on-year, and we continue to grow faster than the market.

To further improve our product experience, we have introduced GenAI assisted chatbot named Myra on our international flight booking funnel. Myra assist users with various flight-related queries and actions such as applying conditional filters, obtaining visa or transit, visa information, understanding baggage policies, learning about cancellation, date change penalties, et cetera. Additionally, it can suggest the cheapest travel days for a destination and perform searches based on simple chat commands. AI-based feature enhancement is a journey. We plan to make Myra more and more intelligent using consumer insights in the future. Additionally, we have further expanded our integrated eVisa feature now for 5 additional destinations like Singapore, Indonesia, Vietnam, Azerbaijan and Sri Lanka. To increase affordability and address cash flow issues, we have introduced a new EMI feature that converts the international flight price into a 6-month CMI plan, thus addressing affordability concerns. On domestic flights funnel, we now have premium airport services such as meet and assist, Porter and [ Buge ] transfer along with regular flight booking. We plan to expand this feature on our international funnel as well soon. thereby enriching the flight booking experience with additional services.

Our accommodation business that includes hotels, homestays and packages continues to witness strong growth. We recorded over 27% year-on-year growth in the adjusted margin on a constant currency basis, contributing 44% to the overall revenue. As we improve our penetration, we continue to add more properties across the country and now offer properties in 2,100 plus cities in India.

Our international outbound business for hotels continues to scale as well, contributing 15% of total accommodation business revenue. On the customer experience side, we have introduced the street view feature to enhance the user experience by providing an accurate view of the external surroundings of the properties, ensuring safety and visual appeal. We are the first platform in India to introduce this capability for both domestic and international properties. We're also now giving personalized recommendations for a customer across room types, meals and amenities. For example, highlighting options for properties in remote locations where meal plans are essential. This intervention not only enhances user convenience, but also helps improve conversion. We've also launched 360-degree imagery for virtual tours, initially covering 200 mid and premium properties with plans to expand over 1,000 hotels. This feature gives us -- gives users an immersive experience, visualizing hotel rooms and amenities leading to a higher conversion rate among users who interact with it and helping us promote higher ASP properties. Our Homestay business continues to grow with increasing coverage of destinations. During the quarter, we sold over 19,300 plus unique properties across 850-plus unique destinations with strong growth across business and leisure destinations. We endeavor to grow this category by offering unique experiences to our customers.

As part of our MOU signed with the Goa government where we launched Goa Beyond Beach's campaign, promoting homestays near temples and heritage homestays in city. The collaborative effort aims to further propel tourism in Goa and position it as vibrant year-round destination, moving beyond its iconic sun, sand and beaches. MakeMyTrip in collaboration with [ Mito ], launched Project M3, a women entrepreneurial program aimed to empower female entrepreneurs from Northeast India by leveraging the untapped potential of homestays as a pathway to entrepreneurship, economic environment and independence. 30 host attended the inaugural workshop, where in comprehensive training, focusing on key areas such as finance, legal, taxation, hospitality and OTA management was provided to help them set up and run a successful homestay business.

Our holiday packages business delivered robust performance as well, achieving highest ever gross booking numbers driven by strong growth in international outbound packages with new destinations like CIS countries, America and Japan leading the growth. Our packages team added new products like NextGen Adventures, specifically targeting millennials and Gen Z. These are experiential group to us catering to the 18 to 35 years old age group.

Our bus business continues to grow well, driven by strong demand and expansion of supply. The Beyond Sea in supply was due to the addition of new buses by many existing operators across the country as the delivery of new buses gathered pace. However, an increase in supply and a reduction in diesel prices has led to a fall in average seat price in most regions, particularly in South India, which helped in robust volume growth in the segment for us. Keeping women's preferences and safety in mind, we launched a women's special feature that shows info such as buses that are highly rated by the number of women traveling alone, women-specific red deals, reviews by women, et cetera. 45% of women bookings are through this funnel with high conversion rates and NPS than the regular funnel. We also launched Tamil booking funnel on Android platform in April 24, in addition to the existing Hindi funnel, helping us cater to new regional users and drive deeper penetration. For our rail customers, we continue to add product features and strengthen our value proposition. As a result, we continue to gain market share in train bookings, leveraging all our brands, including MMT, Goibibo and redBus. For intercity cabs, we integrated supply from Savaari and were able to cater to peak season demand with high availability, fulfillment and quality of service. We have also scaled up assisted sales were high-value bookings and complex itineraries are routed to agents who help with the conversion. Our corporate travel business via both our platforms, that is myBiz and Quest2Travel, is witnessing strong growth. Our active corporate customer count on my base is now over 59,700 plus. And for Quest2Travel, the active customer count has reached 458 large corporates compared to 272 large customers in the same quarter last year. We have increased the personalization quotient on the platform by giving customized property rankings based on user preferences and featuring international hotels popular with Indian travelers and tailored ranking for business trips. As regard to our UA business, we had a successful marketing campaign, Let's Make My Trip in the UA, in time to capture the travel demand for the heat season. The focus was to grow our brand awareness with the non-Indian population. Our loyalty program, MMT Select in UA continuing to get strong traction as well. We now have close to 473,000 enrollments into the program and 40,000 -- approximately 40,000 members are already in silver and gold tiers.

With this, let me now hand over the call to Mohit for the financial highlights of the quarter.

[Mohit Kabra, executive]

Thanks, Rajesh, and hello, everyone. We've started the year on a strong note, posting our highest ever quarterly gross bookings of $2.4 billion compared to $2 billion in the same quarter last year, with a 21.6% year-on-year constant currency growth. Apart from strong growth in bookings, the improvement in mix of higher-margin businesses compared to the same quarter last year has helped us post 31.5% year-on-year constant currency growth in revenue and achieving our highest ever quarterly revenue up to $54.5 million as compared to $196.7 million in the same quarter last year.

Moving on to our segment results. Our air ticketing gross bookings for the quarter came in at $1.4 billion, witnessing a year-on-year growth of 17% in constant currency. Adjusted margin stood at $89.1 million, registering a year-on-year growth of 21.2% in constant currency. Take rates for the air ticketing business were on expected lines at about 6.4%. Our international air ticketing business posted strong year-on-year revenue growth of over 37% in constant currency and now accounts for over 37% of adjusted margins in the air ticketing business. Gross bookings for the quarter in Digital and Packages segment came in at [ $611.3 ] million registering a strong growth of 24.7% year-on-year on constant currency terms. Adjusted margin growth came in higher at 29.6% year-on-year resulting in an adjusted margin of $107.3 million during the quarter. The take rates during the quarter in this segment came in on expected lines at 17.5%. We continue to drive supply expansion by going deeper and wider in the retail market and growing directly contracted hotels in key international markets, which are of interest in an overseas travelers. Our international H&P business grew 88% year-on-year in constant currency and now accounts for about 15% of the adjusted margins from this segment.

In the bus ticketing business, gross bookings for the quarter came in at $316 million, growing at 15.9% year-on-year in constant currency. Adjusted margin came in at $32.4 million, registering a year-on-year growth of over 20.7% in constant currency. The take rates for the business came in line at about 10.2% for the quarter.

Besides driving strong bookings and revenue growth, we continue to remain focused on building strong operating cost efficiencies. As a result, our expenses, which are largely in the nature of fixed costs, such as personnel expenses and selling or [indiscernible] expenses have shown operating leverage on a year-on-year basis. Considering that the reported quarter was a seasonally high leisure travel quarter, coinciding with some softness in the early part of the quarter due to general erections. We have slightly increased the spend on marketing by rolling out brand campaigns, leveraging the ticketing events during the quarter. Accordingly, our marketing and sales promotion expenses, our customer exchange costs came in at 4.8% of gross bookings, which is slightly higher than the 4.6% in same quarter last year. As a result of the above, we are pleased to report our highest ever quarterly adjusted operating profit of $39.1 million and our highest ever adjusted operating profit margin at 1.64% as a percentage of gross bookings. The comparable adjusted operating profit during the same quarter last year was $30.1 million in absolute terms and 1.52% in percentage terms.

Our cash generation continues to be robust. During the quarter, we added net cash in our operations to the tune of $42.9 million. We also saw a temporary working capital releases as expected in a seasonally strong leisure level quarter. As a result of this, our cash and cash equivalents at the end of the quarter stand at about $676 million. Besides maintaining a healthy watches, we will continue to leverage the strong cash portion to invest in potential travel and travel-related organic as well as niche inorganic growth opportunities. Last quarter, we had called out our intent to pursue opportunistic share repurchases or buyback. While no shares were repurchased on the market during the reported quarter, we remain committed to the program if and when the opportunity arises.

Before we open up the call for Q&A, I would like to mention that our investments over the years in key strategic areas such as expansion of travel and travel-related services offered on our platforms, the increasing breadth of services across a large number of cities in the country, sharper targeting of customer cohorts via non-B2C platforms such as myBiz or Quest2Travel for corporate customers and my partner and my affiliate for wider penetration and the underneath investment in technology have been yielding good results and helping us grow faster than the industry. As we begin fiscal year '25, we look forward to continued investments in these areas, and we'll keep sharing progress on any significant milestones achieved. For instance, our corporate business via our myBiz and Q2T platforms cross the $200 million gross booking milestone during the reported quarter.

With that, I'd like to turn the call back to Vipul for Q&A.

[Vipul Garg, executive]

Thanks, Mohit. [Operator Instructions] The first question is from the line of Sachin Salgaonkar of Bank of America.

[Sachin Salgaonkar, analyst]

Congratulations on a good set of our operations numbers. I have 3 questions. My first question is on the tax that we saw this quarter. Just wanted to understand, it looks like a full tax that do you guys have tax credits? Are they fully utilized? And how should 1 think about the tax rate going ahead?

[Mohit Kabra, executive]

So Sachin, you might recall, as we reported the full fiscal year, last quarter, we had taken a deferred tax asset kind of had been created, and we've taken that benefit in the P&L. And therefore, what you see now is a reversal of the deferred tax asset created to the extent of profits generated during the quarter. So it's going to be more a reversal of the deferred tax asset that had been created. And this is going to continue at least for the next couple of years. And we would therefore be kind of utilizing our carryforward tax losses to minimize our actual tax payout. So this is more, I would say, an accounting kind of treatment, whereby you kind of create the deferred taxes in advance as soon as you have line of clarity in terms of realizing these tax losses and savings on the tax outgoes. And then as you kind of actually build profitability in the periods to come, we start end of reversing or expensing the deferred taxes.

[Sachin Salgaonkar, analyst]

Okay. So just to get you clearly, this is accounting change, not actual tax paid and maybe a couple of years down the line, there will be an actual tax pay?

[Mohit Kabra, executive]

That's right. That's right.

[Sachin Salgaonkar, analyst]

Got it. Second question, I mean, clearly, you guys gave a breakup in terms of how much does international contribute in terms of hotel as well as air. I wanted to understand a bit more on the margin side. Are the margins on international air and hotels similar to that what we see domestically? If not, are they higher or lower?

[Mohit Kabra, executive]

It remains largely similar more so in air ticketing. And when it comes to hotels, I think the only small difference that comes in is like register has also called out when it comes to international hotels, the entire inventory doesn't kind of come on contracted basis or directly contracted basis. And we also work with our set of affiliate partners, particularly for the long tail of hotels. So that is where there is some amount of margin dilution. Otherwise, the margins are largely similar across domestic and international segments.

[Sachin Salgaonkar, analyst]

Got it. And last question, Rajesh has mentioned in his opening remarks that obviously, demand was intact because of elections people then travel. But I just wanted to double check on that point and understand, are we seeing any signs of slowdown anywhere in the travel or across air and travel, we see robust trends going higher?

[Rajesh Magow, executive]

Yes. Let me take that, Sachin. And maybe just to make 1 additional comment to the previous response that Mohit shared on the international hotels direct contracting. While structurally, we have, obviously, the [indiscernible] contracted hotels and partner hotels. But in terms of the business mix about 65%, 70% is actually with the directly contracted hotels. So to that extent, we continue to keep getting the benefit of the higher margin. I just thought it was relevant for a piece of information additionally for you.

Now coming to the demand side, like I mentioned, if you look at the domestic light numbers, flown on a flown basis about mid-single-digit growth. and we definitely have grown higher. And to my mind, whatever we saw in the month of April was temporary, thanks to general elections, maybe in some parts of the country, it was also the climate temperature really going beyond 50 and all. And some segments of the travel got impacted because of that. But we also did see May and June nicely recovering as well. So I would say on an overall basis, what is sort of reflecting on our numbers as well, although the industry growth was relatively muted on an overall quarter basis. But if you look at stand-alone May and June, we didn't really see any sort of concerning signs on the demand slowing down. We'll see how it goes in this quarter, but I wouldn't say there is anything at least from the reported quarter that we saw on an overall basis with just short-term disruption in the month of April, everything else was normal.

[Sachin Salgaonkar, analyst]

Got it. And if I could squeeze 1 more question to your point earlier, Rajesh, you're expecting an air recovery. Is this more like a 5- to 6-month thing? Or it might be well beyond the 6 months also where we see full recurring there?

[Rajesh Magow, executive]

I would say more like 6 months and beyond. I think we should just take second half is what generally directionally we've said. And there will be some improvement as we see the sort of delivery schedule of all the airlines and more and more planes will start coming in. But I think the meaningful impact will -- I think we should budget for at least 6 months.

[Vipul Garg, executive]

Thanks, Sachin. The next question is from the line of Aditya Suresh of Macquarie.

[Aditya Suresh, analyst]

Congratulations, Rajesh and team. Two questions. So first is just the hotels business. I think, Rajesh, you briefly touched on this as well. But your commission rates have gone up in this quarter. Can you just speak about what's happening here? I do appreciate that with the more premium supply, which has kind of been onboarded, perhaps the take rates there are lower. But can you just help us in perspective what happened this quarter on take rates, specifically hotels?

[Rajesh Magow, executive]

Yes. Thank you. Maybe I can take that very quickly as well. Aditya, thank you for firstly appreciating the results. If you ask me, it's actually not necessarily significant improvement. Of course, year-on-year, it is showing some improvement. But if you see quarter-on-quarter, it's in the ballpark, if you would perhaps recall our general sort of broad guidance on hotel take rate range has been between 17% to 18% in any case. So I wouldn't read too much into it. Some part of it is within the quarter, it can be because of mix changing or some other small variables here and there. But directionally, there's no fundamental change here.

[Mohit Kabra, executive]

And if I may add, Aditya, if you look at it, while it's a small increase compared to 17.2% in same quarter last year, if you look at it on a quarter-on-quarter basis, it's like 17.5% versus 17.9%. So those small changes across quarters based on seasonality, will continue to be there.

[Aditya Suresh, analyst]

Yes, I was looking at this more from an IFRS revenue divided by gross bookings. And so I think there, on that measure, it looks a bit stocker, so I was trying to understand that. But I take your point. I guess, Rajesh, your second question is then on ancillary services. Here, your revenue has almost doubled, albeit of a low base. It seems like based on your new disclosure on gross bookings the take rate is high as well in the kind of mid-30s thereabouts. My specific question was actually on the drop-down. So beyond revenue, like what is the cost of fulfilling this revenue is that -- what I'm trying to understand is of the $21 million which you reported here, is revenue in other and ancillary. Is it dropped on close being full to your profit line?

[Mohit Kabra, executive]

Maybe I'll take that, Aditya. And the other segment actually represents a in a host of travel and travel-related services that we offer and includes say for instance, in insurance services or ForEx-related services, advertising revenues, et cetera. And apart from that, it also includes certain other transport services such as the cab services that we offer on the rail ticketing that we do. And therefore, if you would see this beginning this fiscal year, we've also started reporting the gross bookings coming in from our other transport services that is the cab services that we offer and the rail ticketing services that we offer so that you can get some more color in terms of what is the gross booking from those businesses, which are where the revenue is kind of included in the other segment, it will be difficult to give a drop down to the bottom line on this map. But like I said, it's a mix of some of these services, which have a low operating cost. And then there are some others including transport services like cabs and rail tickets where you would have effectively net margins similar to other lines of transport.

[Aditya Suresh, analyst]

Can you just like drill on that a bit more? Was that -- is there a significant amount of -- whether it be fixed costs, which are being added to grow these businesses was I guess a question, I mean, when I look at your headcount in a sense that, that's not grown too much. What I'm trying to understand is within the existing platform, these are new streams of revenue from an existing base of expenses, if I may. So just what I'm trying to understand here.

[Mohit Kabra, executive]

Some amount of fixed cost increases will be there, like say for instance we had called out kind of investments in the cab kind of services that we are going to offer, including an investment in a third party called Savaari that we had called out last year. So yes, there is some small bit of increases. But like I said, in terms of overall headcount increases our personnel expenses, we'll continue to see good operating leverage coming through on a year-on-year basis despite all of these investments.

[Aditya Suresh, analyst]

And if I may, just 1 last question was, any impact you can quantify or speak about related to this crowd strike issue?

[Mohit Kabra, executive]

Nothing at our end, actually, no real kind of impact coming in on our business per se.

[Rajesh Magow, executive]

It was more on an operating sort of disruption on the operations, the flight is getting canceled and all. So obviously, the customer service function were super busy on that day. But -- and very quickly, obviously, the teams stretched and worked very closely with airline partners to control the situation as much and as fast as we could possibly do. But outside of that, the business that got disrupted, let's say, the rate of bookings have dropped during that disruption because of the some -- obviously, the desktops and the PCs, et cetera, are not working. So people had hard time to sort of access the platforms, et cetera. But very next day, even if that was Saturday, the volumes came back. And in fact, the deficit got made up. So it was net-net, there was no real impact on business.

[Vipul Garg, executive]

Thanks, Aditya. The next question is from the line of Manik Taneja of Axis Capital.

[Manik Taneja, analyst]

My question was with regards to customer acquisition costs. You did allude to the fact that you stepped up for some of this marketing activity in the second half of the quarter. But how should we be thinking about these costs given that after the revenge travel and the strong growth that the industry witnessed through '22 and '23, 1 is hearing of some slowdown in terms of travel across certain parts of the world as well as including India?

[Mohit Kabra, executive]

Manik, and maybe I can take that. We generally have a bit of variation when it comes to customer acquisition costs across quarters based on seasonality, this is what I had called out. And in this particular quarter and with almost like every passing year, we are gradually increasing more and more the spends on the brand marketing side. As you can imagine, when it was through the COVID period, obviously, it didn't make much sense to kind of spend on brand campaign, but we've been kind of bringing back brand campaigns increasingly over the last couple of years and still kind of been maintaining the overall customer acquisition costs well within the 5% level that we had called out. So I think we believe we'll continue to remain in this range of close to between 4.5% to 5% when it comes to customer acquisition costs.

[Manik Taneja, analyst]

Sure. The second question was with regards to myBiz or the assisted travel business. If you could throw -- while you made some comments around that and the corporate business achieving almost $200 million of GTV in the current quarter. If you could help us understand both the corporate travel and the travel agent GTV separately and probably give us some sense of the air and the hotels mix or the air and non-air mix over there and possibly some sense of the profitability on that piece?

[Mohit Kabra, executive]

So when it comes to reporting the revenue as well as margins, we do it by this segment, not necessarily by the channel of distribution. How we keep sharing additional color as might be kind of relevant. And therefore, on 1 of the channels of kind of distribution, which is on the corporate side, if you would recollect, we had called out that we have been making investments in terms of adding more and more platforms to kind of target the non-B2C segment. There are some kind of channels like myBiz and Quest2Travel, which were more kind of targeting the corporate customers as well as kind of other channels like myPartner or myAffiliate for an indirect kind of targeting of the retail customers, particularly in the Tier 3 and beyond kind of cities. When it comes to the corporate business, the overall gross bookings from this business has now crossed a certain milestone. And therefore, we wanted to kind of call out whether people have an operation of the scaling up some of these channels over the years. So it's more in that regard. The reporting still continues to be by the line of segment per se.

[Vipul Garg, executive]

Thanks, Manik. The next question is from the line of Gaurav Rateria of Morgan Stanley.

[Gaurav Rateria, analyst]

Congratulations on a good set of numbers. My first question, I just wanted to get a sense of the competitive activity on the ground? Has there been any change if at all, especially in segments like air and hotels?

[Rajesh Magow, executive]

Gaurav, no, thanks for asking this question. Actually, there's nothing unusual in this quarter. There's no real change. It continues to be the same. As we've sort of spoken about it in the past as well. So segment by segment, there will be a different set of competition that we will have in the market. But if there is -- if the performance is our own performance for this quarter is of any indication will give you a sense that we've been sort of gaining share pretty much across the board on all segments. Our growth rate is 1 higher than the industry growth rate. And we do have some of the surrogate data points to sort of believe that we've been gaining share. on pretty much every business segment that we run. So I would say it will be fair to say that we've been sort of effectively competing in the market and continue to sort of gain share.

[Gaurav Rateria, analyst]

Got it. Same question with respect to margins. It's a good start to the year with nice margin expansion, both on a sequential and a Y-o-Y basis. How should we think about FY '25? Is this something that becomes a base and remain consistent? Or there would be incremental levers as and when the volume for the industry as a whole recovers as per your expectations in second half?

[Mohit Kabra, executive]

Gaurav, maybe I can take that. And as you know, the margins, particularly in the seasonally stronger leisure quarters like Q1 and Q3 tend to be better in our business. And therefore, I would say we do expect kind of margins in the for the full year also will largely remain closer to this number. So I would not say whether it would remain at about 1.6% or thereabouts. But largely around this, although, like I said, there could be small differences coming in based on seasonality. But this is largely also in line with our continued effort to kind of gradually take the margins to say about 1.8% to 2% in the longer term, say, over the next 3 to 5 years. And so I think as part of that, we continue to kind of try and drive operating leverage and build a small margin improvement on a year-on-year basis.

[Gaurav Rateria, analyst]

Got it. Last question, just a bookkeeping one. If you could share the data point that you always share around your market share in the domestic side. And do we have a similar number for the international outbound segment also?

[Mohit Kabra, executive]

So we do not have an international outbound exactly because that's not going to -- reported in that manner on the outbound side. But yes, on domestic, we continue to kind of retained 30% plus market share. In fact, Rajesh had called out, while the industry has grown at about 4% plus, we've actually grown about 5% plus in domestic year.

[Vipul Garg, executive]

The next question is from the line of Vijit Jain of Citi.

[Vijit Jain, analyst]

Congratulations on great set of numbers. Just focusing on the hotels business. So if I look at hotel businesses, 5 different pieces, right, say premium, budget, alternative, B2B and international. Could you give us -- could you please give us a sense of what the growth was like which of these subsegments grew ahead of the overall number? And in general, I would imagine that the alternative and the budget segment would be much higher take rate versus the other, right? So just wanted to get a sense of how those pieces are [indiscernible].

[Mohit Kabra, executive]

Vijit, maybe I can take that, while there is no significant change in terms of mix by price points, we did kind of share color in terms of the overall growth as well as the growth kind of being stronger coming in from the international hotel segments. So international hotels, like we had called out grew much faster compared to domestic because the base is also smaller and we're kind of adding a lot more supply over there. That's probably the best color. So the international business on H&P side, Hotels and Packages grew at about 88%, while the overall growth in this segment, including both domestic and international, came in at about 29.6%.

[Rajesh Magow, executive]

And within that, maybe just 1 additional comment, Vijit. With in the segment, I mean, if your references to the past commentary, specifically to budget segment and all. Now there is no segment which is not necessarily in the growth mode, that is of the past, all segments within the small, budget, medium, premium, super premium, [indiscernible], of course, all of them are sort of growing now directionally. Of course, there will be base effects, some will grow higher and some will grow at a relatively lower growth rate. But overall, all the segments are growing now.

[Vijit Jain, analyst]

Just 1 follow-up on that one. In general, the take rate across the various segments, right, my understanding would be, in general, senior hotels would be closer to the international in class, which is maybe mid-teens. Budget segment in traditionally higher you highlighted [indiscernible]. So for alternate and for B2B, what is a broad range of take rate, if you can just give a broad sense on that, that would be helpful. And my second question, I may just ask that right away. Looking at your employee cost overall, it's up by [indiscernible] Y-o-Y now, bookings in a pretty tough macro environment is up 20%. So it does look like operating leverage is playing out nicely here. So just trying to understand, are you basically being a bit cautious on the overall EBIT margin?

[Mohit Kabra, executive]

Vijit, I can probably take both. I think when it comes to personnel expenses, I think like we've been calling out, we do believe in our personnel expenses, we'll continue to show operating leverage, like in, say, the last few years, and therefore, that is something that we've kind of continued with even in this particular year. The only area where we have seen slightly more investment being made is in terms of longer impact brand marketing expenses during the quarter. Sorry, on your previous one. Could you just repeat the question on the...

[Vijit Jain, analyst]

The take rate on the B2B and the alternative cost side.

[Mohit Kabra, executive]

Sure. I've already covered in 1 of the earlier questions that the take rates are kind of largely similar between, say, international and domestic because that was also part of your question. For the fact that some part of the international inventory works about 25%, 30% comes in on an affiliate basis. And there, we see some dilution. But as far as that might be the more the B2B part from the supplier side. But otherwise, largely simpler take rates as the domestic. And yes, you are right that the take rates tend to be generally lower in the higher ASP kind of hotels and a slightly higher margin percentage in the lower ASP hotels. It stands to reason because most of the budget or mid-segment properties would be more stand-alone properties and would find it difficult to kind of market themselves and therefore, directly and would therefore kind of use platforms like us a lot more effectively, and therefore, we'll be able to kind of give slightly better margins.

[Vipul Garg, executive]

Thanks, Vijit. The next question is from the line of Aditya Chandrasekar of UBS.

[Aditya Chandrasekar, analyst]

Yes. Congrats on a good set of numbers. Just a couple of questions from my side. On the recovery that we kind of expect in the second half as the airline deliveries start coming in or the aircraft delivery start coming in. Do you see some risk there because I think Airbus has also kind of flagged some difficulties in meeting its production guidance and Boeing also -- I mean, we all know it's facing its own set of difficulties. Do you think there's some downside risk there in terms of the -- some of the deliveries getting delayed maybe to the next year, which in turn causes some demand constraints this year. Just wanted to get your sense on what you're hearing from the airlines and how we should think about that potential risk?

[Rajesh Magow, executive]

Aditya, basis, what we hear right now as things stand today, the estimate is that things will start improving and that's the reason as I was talking about earlier in response to the earlier question as well, was taking on a margin more 6 months rather than 3 months kind of a time frame, then from 6 months, hence from today. we might start to see some sort of material improvement happening. Now the downside risk if we really have to, as outages can only be the timing. So it could be a quarter I don't think it will be faster. It can only be a quarter later, right? So that is the only potential downside risk. But it needs to be viewed slightly differently, to be honest, because if the outlook which is what was being projected today on the demand side, if it continues to the same way, it follows the same trajectory. And let's say, if there is supply constraint on the domestic flights market. There are today other alternative options or other modes of transport and they are doing very nicely, and there would be a share shift. And in the past also, we have seen if the prices were high and then the share shift moved to the high-quality trains or the intercity private buses air condition and so on, depending upon the route that you look at. So I don't think the momentum on sort of demand side will slow down just because of the supply side constraint, if at all that happens or does not improve in the domestic air market, because there are other alternative mode of transport and equally good at times where people fall back on. So I think that -- so it will sort of at least partially will get mitigated if that happens. But I guess we'll have to watch this space in terms of the deliveries coming on time and how fast they come and how fast they sort of start making the -- start helping the supply side. But the current estimate suggest based on our conversations, is that it should be around the 6 months that it should start improving.

[Aditya Chandrasekar, analyst]

Got it. That makes sense. The second question I have is on the margins. So you've said that probably this year will remain at this 1.6-odd number and probably head towards the 1.8% to 2% range in the next 3 to 4 years. Just wanted to understand. So if your airline recovery happens as expected, say, within 6 to 8 months or even with a quarter's lag, so your hotel business continues to grow at a healthy level. Your costs are pretty much stable. Marketing expenses are within that 5% range. And there is a lot of operating leverage flowing through, right? If all of these numbers kind of pan out as expected, we should be hitting that 1.8% to 2% range much earlier, right? Just wanted to understand if we need to kind of factor in some kind of leverage starts slowing down, going ahead or how we should look at it? Because it just seems that 1.8% to 2% 3 to 4 years out seems a bit conservative from your end in terms of guidance.

[Mohit Kabra, executive]

Aditya, maybe I can take that. And I think there would be variables like the 1 that you just called out, the question before this in terms of how quickly the domestic air industry can kind of comes back or bounces back to good growth. And also, I'm sure we'll have an opportunity to kind of keep sharing more color on the estimates going forward at almost every quarterly -- on a quarterly basis. So if there's anything more to add, I'm sure we keep sharing more color with every past quarter.

[Vipul Garg, executive]

Thanks, Aditya. The next question is from the line of Prashant Kothari of [indiscernible].

[Unknown Analyst]

Just 1 small question. You mentioned that the international air travel has definitely grown much better for us versus domestic. When I look at the average transaction size, that has grown up by only like 4% year-over-year. Can you just explain that? I would have thought that the mix change of international should kind of help the transition sizes grow much bigger? Or was there any kind of a dip in overall ticket prices, which led to this outcome?

[Mohit Kabra, executive]

No. I think the overall kind of pricing, say, within the international segments or, say, for instance, within the domestic segments hasn't really seen any significant change. I think what's happened is the overall price increases that used to happen in the past used to be probably slightly more stronger. This quarter, we haven't really seen very significant increase in terms of ASPs per se. But otherwise, there is no real change in the average ASP, I would say, by domestic or by international segment assets.

[Rajesh Magow, executive]

And I think, Prashant, this will -- the point that you're sort of looking at, while at an ASP level, there will be -- there's no real significant change. But this will -- the mix will change or the higher growth on international plant will reflect more in gross bookings number for the air as a whole. If you look at the total gross booking number versus the segment growth, you will see -- so the growth, which is driven by the mix change is sort of reflecting, that increase is reflecting.

[Unknown Analyst]

Okay. And 1 of the questions that I frequently ask Vipul, any update on the India listing front?

[Mohit Kabra, executive]

I think there's nothing more to add over there. Like we have said, we're not really kind of looking at raising any funds right now and therefore, not looking at any capital market activity per se. But should there be a kind of thought of doing so, I'm sure will share color in the quarters to come.

[Vipul Garg, executive]

Thank you, Prashant. At this time, we have no further questions. Any last questions, any attendee wants to ask. Otherwise, we can end the call. So Rajesh, we have no further questions. Over to you for your closing remarks.

[Rajesh Magow, executive]

Thank you, Vipul, and thank you, everyone. Thank you for all asking all the right set of questions. They were all relevant and thank you for your patience. Look forward to see you next quarter.

[Mohit Kabra, executive]

Thanks, everyone.

[Vipul Garg, executive]

Thank you, everyone. You may please disconnect the call. Thank you.