Deep Kalra - Founder, Chairman of The Board and Group Chief Executive Officer Rajesh Magow - Co-Founder, Chief Executive Officer- India and Director Mohit Kabra - Chief Financial Officer.

Lloyd Walmsley - Deutsche Bank AG, Research Division Manish Hemrajani - Oppenheimer & Co. Inc., Research Division Chad Bartley - Pacific Crest Securities, Inc., Research Division Vipin Khare - Morgan Stanley, Research Division.

Good day, ladies and gentlemen, and welcome to MakeMyTrip's Fiscal 2014 Second Quarter Earnings Call. The company wishes to remind you that certain statements made on this call are considered forward-looking statements within the meaning of the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not guarantees of future performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call 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 section of the company's annual report on Form 20-F filed under the SEC on June 13, 2013. Copies of this filing our available from the SEC or from the company's Investor Relations department.

And now, I would like to introduce the speakers from MakeMyTrip, Deep Kalra, Rajesh Magow and Mohit Kabra. Please go ahead..

Thank you, and welcome everyone to our fiscal 2014 second quarter earnings call. Before we discuss results, I'd like to provide a brief update on some positive economic developments in India, during past quarter. In September, the Reserve Bank of India appointed a new Governor, Raghuram Rajan, to head the central bank.

The new governor was previously the Chief Economic Advisor of the India's Ministry of Finance and also Chief Economist at the IMF. Although, he has been in the role for a very short period, Mr. Rajan has already taken some effective decisions that have helped stabilize the rupee to dollar exchange rate.

We are also encouraged by the constructive progress in our civil aviation industry. The Foreign Investment Promotion Board has recently approved the application for a joint venture between the Tata Group and Singapore Airlines to set up a full new service carrier in India.

In the meantime, Jet and Etihad Airways continue to move towards completing the approved joint venture, which had been announced some time back. Additionally, AirAsia India recently received the no objection certificate from the Ministry of Civil Aviation and is applied for the air operating permit to begin flight operations early next calendar year.

The Civil Aviation Ministry now estimates that domestic airlines are expected to add around 370 planes to their fleet by 2017 and the commercial fleet size could reach 1,000 by 2020, up from 400 currently.

Equally as encouraging, we see continued improvements in the domestic hotels build-out as hotel chains move to alleviate the shortage of quality budget category hotels in the country's top tourist locations.

The Indian Hotels Company, popularly known as the Taj Group of Hotels also intends to launch 36 new properties over the next 4 years, which will expand its hotel capacity by 30% and add 5,000 more rooms to the market.

Sarovar Hotels also has plans to set up new properties in Tirupati, Hrishikesh, and Bodh Gaya, which are among the country's popular pilgrimage destinations. Moreover, the hotel industry has been granted infrastructure status by the government, which will help hotels to obtain cheaper loans on easier terms.

Lastly, the Tourism Ministry has announced plans to strengthen infrastructure and create more facilities at various religious and heritage places to accommodate the increasing number of tourists at these locations.

These exciting developments, we believe, should help enhance the capacity in both the domestic airlines and hotel industry and help grow the overall travel market in India. Now, I'd like to share our business accomplishments from the past quarter.

In the just concluded low season quarter, we strengthened the MakeMyTrip brand by focusing our energies on increasing customer's delight. We rolled out our new and improved MakeMyTrip homepage to hundreds of our visitors, which makes the online product discovery easier, the shopping experience better and cross and up selling more effective.

In addition, we increased our online traffic leadership by reaching 9.3 million monthly unique visitors as measured by comScore.

Furthermore, we continue to invest in building our domestic and international hotels business and augmenting our mobile offerings, including the launch of our Route Planner app for Nokia's popular budget smartphones, the Asha.

Coming to the quarter's performance, we're pleased to report that our revenue less service cost grew to $23.3 million, representing our 29.3% year-on-year growth in constant currency terms. Given a generally tough macro environment, this performance was slightly ahead of our internal plans.

Lastly, I'd like to share that the team at MakeMyTrip remains very bullish about our long-term prospects. With a growing middle class that is currently underserved by the existing domestic airline industry, foreign carriers have clearly recognized the large market opportunity, and taking the necessary actions to enter the market.

While we are aware that the various airline joint venture announcements may not have immediate financial impact to our business, we are optimistic about their long-term contributions.

We believe, future increases in seat capacity brought on by these airlines will help more Indians to take flight, as prices should moderate to attainable levels for the common man.

Separately, rollout of faster wireless Internet services from Telcos that are obtained Pan India 4G licenses will only increase the online population, who will adopt e-commerce and m-commerce as a way of life. I'd now like to turn the call over to Rajesh to elaborate further on our quarter's accomplishments..

Thanks, Deep, and hello, everyone. As we've been saying all along, developing and growing the hotels and packages business is our top strategic focus. So I would like to begin by sharing a progress update on our H&P segment.

We continued on our robust growth plans in this segment, and achieved revenue less service cost growth of 58.2% year-on-year in constant currency terms, during this low season quarter. This has been a result of our all around effort in making improvement in every level of the business.

From our hotel customers online experience standpoint, we have improved the speed of the shopping experience by reducing data entry wherever possible. On the mobile front, we are enhancing the hotel booking experience by adding InstaBook for fast and seamless payment feature that was launched for our flight's business several quarters ago.

Additionally, we are also utilizing the GPS coordinate from mobile devices to provide smarter and more targeted hotel bills notifications. These smart but often, unnoticed improvements, along with our ongoing efforts to educate customers about the benefits of mobile booking, should further increase conversion rates on mobile.

Lastly, we are expanding our target hotel audience beyond India with continued investments in HotelTravel.com, while offering our Indian customers, the most choice in both domestic and international hotels in our market.

On the holiday packages front, in addition to the good demand, for our usual seasonally relevant destinations like the Andamans, Singapore and Thailand, we are seeing encouraging growth in destinations like Australia, New Zealand and Africa.

As air connectivity from India improves to those locations, and travelers seek new ideas and locations for travel. During the quarter, based on customer feedback, we launched new luxury selections for many of our popular holiday packages. We believe offering such an option will address an additional customer segment preferences for travel.

Lastly, as reported earlier, we had launched an online holiday booking engine sometime back for some of our most popular fixed packages. Since then, we have noticed an encouraging change in consumer behavior to book these holidays online.

In fact, our online holidays bookings grew by 150% this quarter, albeit on a small base, which is a clear indication of future online growth for this product. We'll continue to invest in our online bookings platform, and make it attractive for users by improving content and booking flow features, in order to gain from this Indian consumer behavior.

Let me now move on to discuss our air business where we saw a growth returning back this quarter with a year-on-year increase of 24.7% in transactions.

In Q2, we witnessed great volatility in domestic air fare with air carriers offering very low fares during July and August to stimulate demand in a nontravel quarter, followed by high fares in September, which moderated passenger growth towards the end of the quarter.

Despite an unpredictable market environment, our growth still outpaced the market and has allowed us to maintain share of 12% in the total domestic air market. As for our international flight business, we continue to see robust transactions growth, largely driven by low penetration of international flights online.

Moving on to share a progress update on mobile. Another one of our top strategic priorities, we have a goal of being the leader in mobile bookings within our market, and as we mentioned on our last call, we have created a dedicated mobile development team with a focus on bringing our various orders onto a comprehensive mobile platform.

We launched flight and hotel bookings on the Windows phone app, international flight bookings on our mobile website and added InstaBook payment option on the mobile site during the quarter. And as Deep mentioned, we also introduced our Route Planner app on the Nokia's very affordable Asha smartphones.

In Q2, we also crossed over the 1.7 million mark in the total downloads, since the launch of our first mobile application. Our iPhone app has consistently ranked as one of the top 2 free travel apps in the Indian App Store and our Android app has ranked in the top 10 free travel and local apps in India's Google marketplace.

When we embarked on our mobile strategy, we've brought the same intense focus on user experience from our website into our mobile development. This successful strategy has resulted in the popularity and the upward adoption of our mobile platforms.

We're glad to report that more than 13% of our domestic hotel transactions were booked via mobile during the reported quarter.

We believe, the Indian travel market has just beginning to experience the growth of mobile as a channel for online bookings, and we will continue to invest in making the best possible user experience for our growing mobile Internet customer base. Now, let me hand the call over to Mohit to share the quarter results in detail..

Thanks, Rajesh, from the financial perspective, the second quarter came in slightly better than we expected at the time when we experienced high volatility in air passenger demand, as well as a steep weakening of the rupee. Our revenue and service cost stood at $23.3 million, representing year-on-year growth of 29.3% in constant currency terms.

Now, let me elaborate on the business performance in our various business segments. Our revenue less service cost from air ticketing grew by 18.2% year-on-year in constant currency terms.

This was driven by the strong transaction growth of nearly 25% as domestic airlines dropped fare significantly during July and August, to stimulate demand in the low season quarter. This reinforces our belief that there is good demand for domestic air travel, when fares remain affordable and stable.

However, we have seen this demand taper off with the increase in domestic fares, since September as we approach the festival season in India.

Additionally, as Rajesh had mentioned earlier, we experienced the strong growth in our international flights business with continuing enhancements made to improve user experience to drive online booking in the market that has traditionally purchased off-line. Revenue margin during the reported quarter improved to 7% from 5.7% in the previous quarter.

This was largely an impact of the reduced airfares during the months of July and August, although the absolute margins for transaction did not change significantly from the previous quarter. I'll now like to talk about the financial highlights of our Hotels and Packages business, which continues to receive our primary strategic focus.

For the revenue less service cost, in the hotels and packages business stood at $7.1 million, which was 58.2% year-on-year growth in constant currency, and this was largely driven by transaction growth of 58.5%.

Our margin in the H&P business improved from 12.5% in same quarter of last fiscal to about 12.9% and was inline with the margins achieved in the preceding quarter.

We continued growth in hotel business, aided by bookings of international hotels, through the acquisition of HotelTravel, offset this subdue growth in our outbound holiday packages, due to steep weakening of the rupee during the quarter. With net revenues of about $1 million, our other businesses grew by 52.6% in constant currency terms.

While we had reported adjusted operating losses of $2 million in the previous high travel quarter, in this quarter, we managed to contain our losses to $1.5 million. This was achieved by ongoing benefits from cost rationalization efforts, as well as optimization of grant [ph] spending during the low holiday season quarter.

With the strength of our balance sheet and improved competitive position, within the domestic hotel market, we will continue to invest behind our strategic initiatives, as we enter the second half of the fiscal year, we continue to invest in technology in mobile as a priority.

We also continue to finance strategic marketing and technology spent at HotelTravel to clear our bookings while working on it ongoing integration with MakeMyTrip. Lastly, while we are encouraged by the performance of the reported quarter, we continue to remain cautious in the near-term due to volatility in the rupee and domestic airfares.

We would therefore like to maintain our annual constant currency growth guidance of 15% to 20% for revenues and service cost.

As the rupee to dollar exchange rate depreciated, further from last guidance rate of 58.79 to current estimated full-year rate of 60.12 rupees to $1, we are revising the dollar guidance range purely on account of changes in translation rate to $1.93 million to $1.97 million for the full fiscal. With that, we would like to open the call for Q&A..

[Operator Instructions] Your first question comes from the line of Lloyd Walmsley with Deutsche Bank..

I'm wondering if you can just comment on the take rates being stronger on the air side. I'm assuming some of that was due to the promotional activity this summer, not anything that we should expect going forward. But if you could comment on that.

And then another question, if I may on the new Website, if you can just comment on what you're seeing in terms of improvement with the rollout. Is that coming through in better conversion.

And you're seeing anything between air and hotel in particular, there? And then just lastly, if you could give us a little bit and what to expect on margin in the second half..

Let me take the question on the air take rates. And as I was mentioning, during the earlier part of the call, we are seeing depression in the airfare, the note of the airfares during the last reported quarter, particularly in July and August. So domestic airfares were down close to about 20% year-on-year, and as I said in previous reported quarter.

And that's what's slightly caused the change in terms of air margins. As a result of being compared with a lower airfare as compared to the previous quarter. So previous quarter, we had reported about 5.7% air margin and if you look at it, considering that the airfares have averaged dropped by about 20%, the margins are looking healthier.

In percentage terms at about 7%. And as I also mentioned, the absolute take rate continue to remain in the same range as in the previous quarter. So we don't really have seen an improvement in the overall absolute take rate, but I guess this is more a function of airfares being lower.

And we believe that season upon season, and as the airfares change, this kind of a percentage difference is likely to come in, in the previous quarters..

Lloyd, if I can just build on what Mohit said, it's effectively a denominator effect. So it's more optical and no real change from the take -- on our overall take rate from the supplier if you will or on the 3 components. So that's on it.

And on hotel and packages take rates continued to be our outlook on take rates continue to be as we have been talking about in the past, from a long-term perspective, and so we reported 12.9% right now. So that's previous quarter was also 12.9%, but year-on-year there's an improvement. And we continue to be optimistic on that as we grow our volumes.

From a long-term outlook perspective, just incrementally keep improving as we grow our volumes..

So right. I think what we were talking about the -- basically in the last call, if you recall, the new homepage was still on AB mode. We had exposed fairly large number of folks to it.

So in the process of this quarter, we managed to move all visitors to the new homepage, and we are seeing positive results on conversion across all the lines of business. And as you realized from the new homepage, the real rationale behind this is a far more effective way for us to cross sell and up sell other high-value products.

There's a lot of emphasis on the standalone hotel, as well as a hotel side of the product chain. And finally on buying and discovering holidays online. So we're actually quite excited about the new homepage. We think it's cutting-edge design, and will also lead to further increase in conversions..

Okay, thanks and then any comment on margin expectations in the second half?.

Margin expectation on Air and H&P together?.

Just operating margins really..

Right. So on operating margin, Lloyd, to me, like we mentioned, that we will continue to invest, in strategic areas like mobile and in largely, I guess, in the H&P space.

But more specifically, in technology with respect to mobile and also, in the coming quarter, there is going to investment strategically on the marketing and utilitarian et cetera as well. So on the overall business, I think, we'll see some from a percentage perspective and see some incremental improvement, if you will.

in certain areas, but on an overall basis, the -- on a full-year outlook standpoint, we would definitely see some incremental improvement, but not necessarily material improvement.

And that's more from the point of view that we stay, we would like to stay invested at this point in time, just to bring the growth back from our perspective, in the H&P segment. So, that's how we should look at it.

As you know, we haven't really been guiding on the operating margin per se, so therefore, this is the qualitative comment that I would like to mention here..

Your next question comes from the line of Manish Hemrajani from Oppenheimer..

The air was surprisingly strong. Although not effectively due to fare discounting. You touched upon it in your prepared remarks, Deep.

Can you dig a little bit deeper into air market for the rest of fiscal '14 and beyond? And how do you see supply-side dynamic shifting in air with AirAsia and Singapore Airlines?.

So yes, Manish, like as I pointed out during my speech, I believe, that we will have to wait a bit to see the full impact of these airlines. The earliest, which is expected is AirAsia, which is the leading cost carrier in Asia. They expect to be up and running in the first quarter of the next calendar year.

But Tata and Singapore Airlines joint venture as of now is targeting June 2014, and Etihad investment and Jet should hopefully happen before both of these. We believe that fundamental positive development should come from the fact that we will have a tremendous increase in supply.

Currently, the market as you know, is supply constraint, which in turn is causing airfares to remain fairly high as you seeing currently, was the first 2 months of last quarter saw very attractive low fares by September and then in October, we've had really high fares. This is expected to continue right through the end of the calendar year.

And this can only happen because there's a serious shortage of airline seats, prices are kept in a sense artificially high and not allowing for I guess for competition.

So we think with enhanced capacity, that's going to be the biggest benefit the market is going to see, softening of prices, more competition and therefore, just a much larger pool of people being able to really take that flight instead of a rail or a much longer bus ride from point to point. So we think, that's going to be the biggest benefit.

From a margin scenario, we believe that the model is fairly well insulated already as you know, we have got 3 components and direct commission from airlines is any way our hot button [ph], the official rate is already down to a percent. We have overrides from time to time, taking at sometimes to 2%, 2.5% or so.

And the rest of the fee that really a function of either convenience fees from customer or GDS commission that we make from Amadeus in our case. So we think that the model is fairly well insulated.

That being said, we have guided even before, over time we do expect that margins will be, will come down probably by about a percentage over the next 12 to 18 months. And then, flattened out and flat or down at that point..

Got it.

Can you touch upon the competitive landscape, specially ibibo.com that seems to be the prime competitor and are competitive pressures forcing you to spend above plan on marketing?.

Also any change in the competitive landscape that you think you can take advantage of and gain share as a result?.

Yes, surely. So the competitive landscape is definitely getting quite interesting. We believe that #2 and #3 are current ClearTrip did feel some competitive pressures and from the market feedback as well as all the other collated data from various sources when you triangulate that between traffic and air segments and some of the hotel data.

We believe that they have lost a little bit more ground this quarter. Goibibo the company that you mentioned, has been discounting steadily and that has helped them to gain both traffic as well as transactions. From our experience, we don't think that, that's a very durable kind of the strategy.

Because when you tend to bring back your prices as you need to at some point of time to the market norm, and cut all kinds of cash backs and other discounts that you're doing on the rear ended basis, you'd just quickly tend to lose a lot of the volumes that you picked up, because of discounting a loan.

So we think that might be fleeting and the market shares will probably go back again into similar kind of numbers at least between number 2, 3 and 4. We've been steadily gaining this quarter, we've reported a holding on about 12% market share on the air side.

Overall on the OTA side we also reckon that we've kept on to our close to 47% market share within OTA.

On the hotel side and on the packages side, we've definitely been gaining and we think that's clearly the area where we want to focus rather than also at this current point of time, we don't think we don't see the need to necessarily discount to gain share on air. We believe the long term way out of this is definitely a better customer experience.

And as you can see, most of our efforts are there. And what becomes very interesting is now the mobile opportunity, where with the form of focus and targeted audience from time to time you can do some specials, get people to come on, on mobile, there are some distinct benefits for customer acquisition on the mobile channel.

And we think that's a pretty smart way for us to grow and that's what we've been doing, going forward. So we will be keeping up our planned levels of marketing, which is not really reactionary, but has been planned pretty much for the year on a seasonal -- on a quarter-to-quarter basis.

So you will see that happen and you will see as we get into this high season quarter. You're going to see some higher advertising spend from us, particularly on the brand side and focus on Hotel and Packages product..

Got it. Last one for me.

Can you comment on both HotelTravel.com and ixigo, what's the contribution from these businesses to the top line and are they growing faster than corporate [ph] average and where do you see this trending over the next 12 months?.

Sure, Manish. So ixigo has been our financial investment, as you would know, so we just have our strategic investment out there, 19. -- little less than 20%. And they have been doing progress, actually in the last couple of quarters, there has been good progress on the product discovery side.

But from a contribution standpoint, there is no real material contribution to the P&L yet. So as we come close to the -- probably would have also noticed there's soft launch as well. But as it becomes more material and all, we will talk more about that.

But as far as HotelTravel is concerned, the integration has been going on with HotelTravel fairly well. We've made material progress on supply integration, we have made significant progress on technology integration and we have started seeing some early benefits coming in from the integration efforts already.

But in terms of just contribution, material contribution coming out of HotelTravel, it will start reflecting in the new fiscal from first quarter onwards. And I guess, that could be probably the right time to talk about that. So far, our focus has been to make sure that on all aspects of our businesses, we just integrate really well.

And that we've been quite satisfied with the progress out there. And but very soon, starting from first quarter of next fiscal, we would start seeing good contribution coming in as far as the international hotel segment is concerned. And we will talk more about that when we get to that stage..

Got it. You guys have spoken in the past that you'd probably look at increasing your stake in ixigo.

Has that been put on the backburner, or are you still actively looking at that?.

So we have the option, contractually. And it's not ruled out definitely, definitely not ruled out. But in the immediate term, there is no plan of increasing it as well. So as and when we have any plan, we will share. But the option is very much open at this point in time..

Are you the back-end for that?.

No, Manish. We don't think that's the intention going in. The idea of keeping the minority is also so that they're going to do what's best for their company. We do have a border feet [ph], but other than that, the company really is not going to do more, I think it's best for them..

Your next question comes from the line of Chad Bartley with Pacific Crest..

I wanted to ask about H&P transactions.

That fell sequentially, was that in line with your expectations? And also can you comment on hotel room pricing, continue to see declines there when could that potentially stabilize?.

Chad, as we mentioned, we typically have 2 high season quarters and 2 low season quarters in India. And this the reported quarter was a low travel season quarter, low holiday season quarter, and therefore, sequentially you see a decline in our transactions as well as revenues on the Hotels and Packages side.

And you should -- now kind of approach or get into the high season quarter in the October to December period..

Yes. Just to build on what Mohit said, also if that's the explanation to the I guess sequential quarter, but even if you keep the seasonality in mind, and you compare it with the last year same quarter, it has gone down. So it's a great observation. And the reason for that is rupee depreciation is definitely part of the H&P segment.

We have overseas holidays as you know as well. And in this quarter, because of the rupee depreciation, the preference for the consumers were more short haul then long haul. So there was a small impact coming from that side as well.

And the other thing that as we've been talking about from a mix perspective, we have more contribution coming in from standalone a la carte hotels as we keep growing that, that is the segment that has been profit growing for us. Much more robust growth than the holidays relatively speaking so that's contributing a bit as well.

So from a range perspective, I would say, if you take the rupee depreciation in fact which came in from the overseas holidays, it should probably settle around the $350 mark..

Your next question comes from the line Vikram [indiscernible] from Morgan Stanley..

Vipin Khare from Morgan Stanley. Just a few questions on your good set of results. I just wanted to understand what have your experience been in terms of traffic on the website.

We see the transaction numbers and the revenue growth but obviously, you must be monitoring the traffic and qualitative understanding or anything you can share there in terms of new users you're getting what has been the trend there and obviously, the amount of time and page views they kind of spend on the website?.

Yes, sure, Vipin. Great question again. No, we've been actually, seeing very encouraging results on traffic as well and we monitor that absolutely religiously as well. Both quantitatively and qualitatively.

And as you can perhaps, also see comScore, we've been growing our traffic and when you compare it with the competition, the growth is actually much healthier. And we maintain our position and the trend from a trend perspective. It continues to just going in one direction, which is positive. So we continue to maintain our leadership.

As we highlighted on the call as well. And also continue to grow. And from a quality standpoint, also from a page views or time spent on our site, also continues to improve. And again, as compared to the competition in the OTA space, actually, much, much better than many of them. Again neutrally looking at comScore data.

So all good news there and we continue to build that. And that in a way, when you compare the -- when you look at the marketing spend, it kind of reflects in there as well. Because our repeat rate has been improving. And also, the contribution of direct traffic has been fairly robust as well. So all good news on traffic side..

How many users you've got attracted to website? Have you seen any trends in terms of coming in from areas or sections that were not present in the website earlier or if you could see in large city kind of distribution?.

No. In fact, the source of traffic from city's perspective it has been expanding to Tier 2, Tier 3 cities as well. Directly linked to I guess the Internet penetration and the consumer behavior in those cities changing clearly. And we kind of, see that from a destination perspective as well. When the bookings happen, from a travel standpoint.

So definitely it has been coming in from more than Tier 1, Tier 2 cities now. So some time back, some years back, it used to be more metro than next level Tier 1 cities if you will. But now it has been just going much beyond that.

Also I think, it's worth mentioning out here when we're talking about traffic, there has been significant growth of traffic on the mobile platform that we've witnessed over the past few quarters. As we've been talking about that as well. And there are 2 aspects there.

So if I can share that data point with you, so we now have 20% of our traffic coming on the -- through the mobile platform, apps and the mobile site. And also, we're getting good significant portion of that as new users of Internet if you will as well. So it's not necessarily a complete overlap.

The desktop or access through the desktop as far as Internet is concerned. And lot of the new users are adopting to Internet for the first time through mobile platforms. So that's a very encouraging trend as well..

Can you give us some sense of your overseas force how it has changed over the last few quarters and which segments have been focused on? Plus in your our experience, have you seen an increase in sales productivity in terms of their ability to convince the hotels either in terms of rate or to get onto the website and on the hotels and packages side, especially in the packages side, their ability to convince users to book the holidays either in terms of the quantum of the package or the turn-around-time of those conversations?.

Yes, sure. In fact, the team of market managers from a side perspective hasn't really grown, because we didn't really need to grow that. Because they have really been doing a great job in terms of just over productivity improvement.

Because the whole drive of just expanding our network of hotels as we had mentioned it earlier, what big drive that you wanted to do, to ramp the supply side from 5,000 to 10,000 plus that has happened already, and now there are only incremental sign outs.

So right now, what they do is to on an ongoing basis and they have been just working on relationship and they've done a fantastic job in terms of just educating them and making sure that the adoption on extranet, for example, goes up. And also, on price negotiation.

So price negotiation within, is direct correlation with the kind of volumes that we're producing for them. And yes, they have been doing a great job and kind of, reflecting in our overall H&P margin if you will as well. And also, on the standalone a la carte hotel transition growth.

So all in all, this market manager team has been really effective and continue to be very effective, in terms of price negotiations, inventory allocation or just improving the relationship on an ongoing basis.

So it's been really like I also mentioned on the call, that when we were focusing on H&P transaction growth strategically, statistically on the hotel side, touching upon the every lever of the business, and this side, to be supply-side of on the hotel side, is definitely one of the most important ones.

And there has been a lot of focus on that front and we have really been improving and showing continuous improvement on that and that's kind of definitely helping us maintain the robust growth on the H&P side..

On your guidance, you're first half has been very strong in terms of revenue growth. And even though, you have taken the impact of rupee depreciation in your guidance, you don't seem to have given yourself the benefit of a strong first half.

So are you good enough yet [ph], or is it something you expect in the second half, which is making you just take the drag of the rupee?.

Though Vipin it's a good observation, but besides the fact that we have factored in rupee depreciation and yes, it is a bit stable right now. But the other important factor also is that the airfare that we highlighted.

So we immediately saw in the reported quarter, July, August from a payers perspective, are substantially lower and therefore there was a direct correlation from a growth perspective.

But September when the fares went up, there was a negative correlation also, direct correlations from -- and the result was negative in terms of growth immediately going down as well. And the fares continue to be high because as we get into a high travel season quarter. So there are enough indications right now.

Because the fundamental underneath capacity issue hasn't really been resolved as yet. Because there are no real additional planes that have brought into since the time the capacity constraint got created because of Kingfisher.

And so therefore, we didn't want to be to get super ambitious about the growth coming back, till we see this growth of transactions, at least for 2 or 3 quarters on a sustained basis, before we could have a look to revisit our guidance if you will. So that was a real reason.

So as we see let’s see how the high season quarter goes and then by the end of this quarter, if there is -- if you continue to see positive trends, we would definitely look at revisiting it by the end of December quarter..

Okay, okay. And Rajesh, you mentioned that the tickets price, the rates was a lot lower in the first 2 months of the quarter and then, most of the airlines increased it in September.

So did you mean, in terms of your transactions growth, month-on-month, so that we get some sense, did you see any steep fall off in the number of transactions in September or that still grew month-on-month despite the trading period?.

No, I don't call it a steep fall. But it is a noticeable fall that happened. So because the jump then was also significant.

So if you see, Vipin, overall as Mohit was highlighting, if overall transaction value had gone down, by 20%, and 2 months out of the quarter were below, so they were really substantially lower because they were more like sale fares if you will. So therefore there was a quantum jump when they came back. And they continue to be more.

And also for the advanced bookings, et cetera, as well. So you do see an over the period of time that you actually get a better sense of what happened because it's really very dynamic at this point in time. So we haven't really been able to pick up a pattern here and that is also one of the reasons why we also stay more conservative on this.

Because once the pattern become clear in terms of how airlines are trying to revenue optimize from their point of view, then the underneath pattern of fares become very clear and then it becomes more easier for us to estimate the real trends on transaction growth, et cetera, as well.

Which is not been happening and not been very clear in the past few quarters. So therefore, we stay cautious on this..

Okay. And just one last question from my side. In terms of the investments needed for your business right now, are we right in assuming that the Hotel and Packages segment needs a lot more investment than the air side.

And then internally, how do you decide which areas need more investment, more in terms of your sales and marketing effort, is it more in terms of giving a better query guides to customers to attract traffic or use in terms of just finding more hotels.

And what internal metrics do you track to see whether your investments are going in the right direction, do you need to change the strategy there to kind of [ph] increase investments or just [indiscernible]?.

Sure, sure, Vipin. No, there are 2 strategic areas of investment as we've been mentioning that has been clearly identified. And they are more strategic in nature. So one is mobile. So the investment in technology is going because there's significant traffic movement trend that is happening as I mentioned earlier, on the mobile platform.

So we continue to make technology investment on that front. And we perform these measures or the metrics that we measured to enhance the investment is, is very clear, how much is the growth of traffic is happening there and what's the kind of conversion that we want to achieve on that platform. And so on, it's an ongoing thing.

It's exactly the way we run desktop side of business, if you will, and the other area is, continuous investment in the international hotel space, both again in technology as well as marketing. And which includes investment in HotelTravel.com. like I mentioned, that there is lot of potential from international hotel segment standpoint.

And therefore, it is a strategic investment going in that direction, including investment in technology because of the integration between MakeMyTrip and HotelTravel.com.

So these are 2 strategically identified areas of investment at this point in time and they will continue to be for some time till we kind of, just see the results and then, look at probably identifying other areas.

On an ongoing business, on a running business for all the existing line of businesses, there are ongoing investments that happened, and drivers for those investments are specific to the line of businesses, specific to the areas of business and they would vary from, for example, we've been talking about automation as one of the areas of investment, which we continue to do.

I had already actually some of the benefits have already been reflecting as Mohit was highlighting in his section of the call. Already on certain cost heads on our P&L will be an ongoing investment.

For example, just one of the things that we rolled out in the reported quarter is the new mid-office system for the holiday business, as I think, we had mentioned it in the past, as one of the important investment from improvement of our productivity efficiency for the sales force and the agents point of view. We rolled out last quarter.

So automation is definitely another area of investment, which kind of, hurts across as it's an ongoing thing. And so these are the areas of investment in terms of measuring, in terms of drivers for investments. Obviously, we look at the ROI for the investment and the need for the investment in that particular area.

And the result of the investment there are various metrics, which will vary from area to area, which we measure..

Vipin, I hope I answered your question.

Do you have any other question?.

That's all I had, Rajesh..

[Operator Instructions] This time, there are no further questions. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect..