Deep Kalra - Group CEO Rajesh Magow - CEO, India Mohit Kabra - CFO.

Manish Hemrajani – Oppenheimer Gaurav Malhotra - Citigroup Pinku Pappan - Nomura International Lloyd Walmsley - Deutsche Bank Sangmesh Jatti - QVT Financial.

Welcome to MakeMyTrip Fiscal 2015 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 with the SEC on June 6, 2014. Copies of this filing are available from the SEC or from the Company's Investor Relations department.

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

Thank you and welcome, everyone to our fiscal 2015 second-quarter earnings call. I would like to begin today's call by sharing our enthusiasm around the improving India macroeconomic environment. During the fiscal second quarter, we witnessed further re-acceleration of growth as domestic airlines continued to offer discounted fares.

The pricing and distribution strategies adopted by these airlines during the quarter helped stimulate booking demand and we capitalized on this momentum to improve our market share to over 13% of the overall domestic air market during the first half of the fiscal year. Furthermore, smartphone adoption continues to grow in India.

According to IDC data, the domestic smartphone market grew 84% in the second quarter of calendar 2014. This growth is expected to continue as attractively priced models are launched in the market and India is poised to become the world's second-largest smartphone market.

Increasing familiarity with mobile commerce will help drive smartphone adoption as most new Internet users in the country will be accessing the web via mobile devices. In Q2, we targeted even faster mobile adoption as we continuously strove to offer the best-in-class app and mobile web experience to all our customers.

During the quarter, we achieved strong growth in all our core business segments. We were particularly pleased with the growth in our strategically important hotels and holiday packages business. We accomplished this by offering our customers a superior end-to-end experience based on our deep domestic and international supplier relationships.

In addition, we invested in focused and strategic marketing and offered attractive prices to our customers. As part of our strategic endeavor, we were able to improve our mix of non-air net revenue during the seasonally low holiday quarter to over 43% versus 35% in the same quarter last year.

The improving business mix demonstrates that we were able to outpace and differentiate ourselves from our competitors in the strategically important H&P business. Next, I would like to update you on our mobile progress. To-date, our app has been downloaded by more than 4.1 million customers across all popular operating systems.

In addition, more than one third of our total online monthly unique visitors into MakeMyTrip via mobile. For domestic flights mobile booking accounted for over 16% of total online transactions in the quarter. Furthermore, mobile users also contributed over 34% of our total online domestic hotel transactions this past quarter.

And with our investors and strategic focus, we intend to keep the mobile momentum going. As we said before, mobile is a very important strategic priority for MakeMyTrip. To accelerate even faster mobile adoption, we continue to focus our team's energies and allocate resources towards enhancing our mobile users' experience.

In Q2, we launched a nationwide TV campaign that focuses viewers' attention on MakeMyTrip's mobile offering. The campaign was successful as approximately 31% of the increase in downloads during the quarter can be attributed to that commercial.

This past quarter, our development team further improved mobile conversion rates by enhancing the overall performance of our apps, reducing the app download size and swiftly adopting new mobile payment security facilities offered by financial institutions within India.

In addition, we have recently introduced vernacular content on our mobile app and mobile web experience, which we believe will allow us to reach customers beyond the larger cities, where many potential users prefer an Indian dialect to research and shop.

Going forward, we will work to further improve the vernacular content on our mobile platform, enhance its usability and offer more localized content to capture the growing wave of mobile Internet users. Now, I would like to let Rajesh share some highlights of the past quarter. .

Thanks, Deep, and hello, everyone. I am very pleased to share that the MakeMyTrip team delivered strong operating and financial results in the fiscal second quarter. The growth achieved reflected an improving macro environment and demand-stimulating fares offered by the domestic air industry.

During this year's fiscal Q2, our hotels and packages transactions grew by over 70% year-on-year and registered over 75% growth in revenues less service costs on a constant currency basis.

This high growth was driven to our domestic hotels and packages business as well as international hotels booking growth, which was partly aided by the consolidation of our easytobook.com acquisition. As a result, the H&P contribution to net revenue increased to nearly 40% as against last fiscal year's 30%.

Let me now elaborate on the progress made in our ongoing growth initiatives, starting with our continued progress in the domestic and international standalone hotels business.

As shared last quarter, we continue to focus on driving bookings growth in the higher category of hotels, which improves our customers' overall travel experience and offers us favorable unit economics.

For our customers using mobile devices to access our services, growth in standalone hotels mobile bookings was robust as conversions continued to improve. Furthermore, our mobile team continues to improve the users experience by driving down latency and innovating on new ideas that we believe can further enhance mobile adoption within our business.

On the domestic supply side, we expanded our hotel base to over 15,500 domestic properties including hotels, guest houses, and vacation villas up from 13,000 properties reported last quarter.

We intend to leverage this strength along with the strong tailwinds of increasing Internet penetration and mobile adoption to reach out to a wider range of customers while ensuring that we remain the preferred partner for our increased rate of suppliers.

Furthermore, we now offer plenty of hotel choices for our outbound customers with more than 180,000 properties within our group network. On the holiday business, our growth was followed by higher transactions growth in the domestic packages business.

We believe that our unwavering customer-first approach, as well as our ability to work with suppliers to design unique and attractively priced package trips to match demand with the availability, contributed to this healthy growth.

We see more progress ahead as we work to further automate and bring online the vast array of holiday travel products available at MakeMyTrip, which in turn will improve online conversion rates going forward.

Moving on to our air ticketing business, we improved our industry-leading domestic air market share to over 13%, up from the 12% share reported last quarter as per the latest available DGCA data. During the quarter, air net revenue increased by over 16% year-on-year as we grew transactions by over 39% year-on-year.

Overall air transactions growth was driven by increase in both domestic and international account travel. The strong growth in domestic air largely came from special fare offers launched by the domestic carriers during the lean travel quarter.

Our international air ticketing business continues to see robust transaction growth as the online experience for customers continues to improve and we benefit from the ongoing shift from the offline retail bookings towards online channels.

To summarize the quarter, our ongoing push to innovate and enhance our offerings on our mobile platforms, plus our very strong focus on customer experience continues to strengthen the MakeMyTrip brand and sustain our market leadership. The team is focused on delivering on short-term expectations while keeping an eye on our long-term vision.

We believe MakeMyTrip is very well positioned to capitalize on the immense opportunities we see ahead for the industry. Now let me hand the call over to Mohit to share our quarter's financial results in greater detail. .

Thanks, Rajesh and hello, everyone. In quarter two, we delivered net revenue of over $32 million, representing a constant currency growth of 34.8%.

This growth is a reflection of our ability as market leaders to leverage improved market sentiment in the domestic travel market, which had hitherto been witnessing lackluster growth during the previous two fiscal years.

Also, in line with our previous quarter, we maintained a disciplined track on expense growth, particularly in the general and administrative expenses. This allowed us to continue making higher investments in marketing to drive top-line growth at a time when the industry is showing signs of recovery.

At the same time, we were also able to significantly reduce our quarterly and half-yearly registered operating losses when compared with the same period in the previous fiscal. I will now elaborate on the financial performance of our key business segments.

During the second fiscal quarter of 2015, net revenue from the air ticketing business grew 16.4% year-on-year in constant currency terms. This growth has largely been driven by strong transactions growth in our domestic as well as international outbound air ticketing business.

International outbound air ticketing continued to be the fastest-growing segment in the air ticketing business with year-on-year transaction growth of 46%.

In line with our expectations, the air revenue margin has come down from 7% reported in the same period of last fiscal to 6.2%, though it is a small improvement from the 5.8% reported in the previous quarter.

Of our revenue less service costs, in the strategic focus area of hotels and packages business, came in at nearly $12.5 million for the fiscal second quarter, which represents a 75.2% growth year-on-year in constant currency terms and was again driven largely by 70.9% growth in transactions.

The transactions growth came in from domestic and international standalone hotels as well as the domestic holidays business. This was achieved on the back of the improved conversion rates in our domestic hotel bookings, particularly from our ever improving mobile platforms and from the increased offering of domestic hotel options for our customers.

It was also aided by strong growth in international hotel bookings, which continue to benefit from the consolidation of our EasyToBook acquisition since Feb, 2014. Our net margin in the H&P business is stood at 12.4% for the reported quarter, which is an improvement over the net margin of 11.9% reported in the previous quarter.

While the quarter-on-quarter improvement in net margins was planned, we continue to strategically price our products to drive aggressive growth in hotels and packages to gain an early lead with improving customer sentiment and increasing mobile penetration.

On profitability, we are able to drive operating leverage and decrease our adjusted operating loss to $318,000 during the quarter compared to a loss of over $1.5 million in the same quarter for the previous fiscal year.

The adjusted operating loss for the first half of this fiscal is stands reduced at about $51,000 versus a loss of over $3.5 million during the same period of the previous fiscal year.

We will continue to drive operating leverage while making strategic investments in mobile, marketing and other growth generating expenses to leverage our current growth momentum, particularly in the hotels and packages business. I would now talk about the annual revenue growth guidance.

During the second half of this fiscal, our business strategy will largely remain the same and we will continue to leverage our strong balance sheet to ensure that MakeMyTrip improves its market leadership in all core business segments. We continue to gain confidence from the growth posted in the first half of the current fiscal.

As a result, we would like to improve our fiscal 2015 annual constant currency growth guidance to a range of 28% to 30%, resulting in revenue less service costs guidance of $136 million to $138 million. We would now like to open the call for Q&A. Operator, please. .

Thank you. Your first question is from the line of Manish Hemrajani from Oppenheimer. Please proceed. Thank you..

Yeah. Thanks for taking my call. Good morning, guys. Good numbers. Impressive transaction growth in the hotels, but air was a big surprise coming in at 40% year-over-year.

Do you feel that kind of transaction volume growth is sustainable over this fiscal year, especially if the low-fare environment continues? Also, we have seen strong passenger growth in the month of September. And if you look at year-to-date numbers, it has been progressively getting better on the domestic passenger front.

Is that what you are seeing in your results as well, the quarters progressively getting better?.

Manish, obviously that is a great observation. You know, so going forward clearly what has happened historically in this quarter is that stimulated -- the demand was stimulated by the low fares, clearly, as far as domestic air transactions growth was concerned.

But I would also like to just highlight that our international segment growth rate was much higher than the domestic air segment growth, because as Mohit was highlighting, there is a significant amount of headroom that are in terms of shift from offline to online that we are experiencing in the international air segment.

Now as far as domestic air segment is concerned, a lot depends on the ongoing pricing strategy, if you will, by all the airlines. Now this, as we know, was a low season quarter and therefore typically everyone kind of led by one carrier and then everyone kind of followed suit in terms of just reducing fares.

And going forward, we will have to see because November-December is a high season quarter. And there was a lot of obviously forward buying happening, et cetera.

So we will have to see in this quarter how it flows, because if you release really see our overall transaction value, per transaction value, it has come down -- on the air side it has come down only by 7% on an overall basis. This is an indication that international air grew faster than the domestic air. So just keep these factors in mind.

Industry trend at this point in time is anybody's guess because this whole pricing strategy of doing and keep pricing. We have seen that on one count for forward bookings like 60 days out, 90 days out, 180 days out. It's been working out now consistently.

But the other aspect of increasing the price when you book closer to the travel date hasn't really happened in at least the low season quarter.

We expect that that might happen as you go into the high season quarter as well, so I am going forward because then only the overall revenue management from their perspective or yield management from their perspective makes sense. So we will have to wait and watch.

Given that this was a very low season quarter we would definitely like to see another high season quarter and how these pricing strategies from all the airlines pan out. And Then probably we will be in a good position to see whether this is a sustained trend or not, so that's how we should look at it..

Yeah. Manish your point on September being a record month for growth is absolutely right. But again, I think as Rajesh said, there were some sustained and pretty aggressive discount fare moves and forward buying which prompted that. So I would not actually read too much into the one-month thing.

I think what happens, what follows really in OND will be I think really key. Given that you are close to the market, you know there's a lot going on in the domestic airlines industry. So I think it's really important that we see how it does -- how it goes through this next quarter..

A follow-up point on that. With oil now below $80 a barrel and likely headed to $70, do you think this allows the airlines to maybe kind of prolong this low-fare environment to further drive passenger growth higher? And maybe also expand or add capacity faster than they would have done, let's say, if oil was at $100..

Yeah. Absolutely, Manish. I think it is well known that most important cost factor for any of the airlines is really the fuel costs on a direct basis and then the lease costs. So not only -- right now with I think airlines are getting a double benefit. They are getting the benefit of oil under 80 after a really long, long time.

They are also getting the benefit of a reasonably stable dollar, which helps in a lot of their lease costs, most of them being in dollars. So I think this will definitely help their P&L, but it will come down to the strength of the balance sheet of the respective airline. Some of them are in expansion mode.

A couple of these areas are literally just off the blocks, as you know. Asia has just announced that they are going to fly Delhi-Bombay, which is India's busiest trunk route. This carrier Vistara is yet to get off the ground, expected by December, whereas you know Indigo is of course going from strength to strength.

So I think overall it definitely is a big benefit for the airlines and it's going to come down to the balance sheet really in terms of just the expansion plans..

Great, great, thanks for that.

Switching to mobile, the app download number that you shared, is that just on smartphones, or does it include tablets as well? And then what percent of your transaction is from mobile when you add tablets into the mix?.

So this number of $4.1 million is only across the smartphone platforms as of now..

Okay, got it.

And then can you tell us what your conversion rates and monetization levels are on the smartphone versus the desktop?.

So Manish, if I can take this, this is Rajesh. They are quite comparable now. It's getting better. On the hotel side it's quite comparable with the desktop world; and on the air side it's getting better and coming closer.

The payment issues still remain and we need to -- from our side whatever we can do, we're working on it and trying to do whatever is possible to improve the conversion, so that there are no dropouts on payment side. But fundamentally, it is also dependent on the other sites, the payment gateway sites being ready from a mobile perspective as well.

So that will take some time. As and when the sites improve on the other sites, the conversion will continue to improve and go in right direction, but definitely getting better on the air side as well..

Okay, that's all I have. Thanks..

Thank you. Your next question is from the line of Gaurav M. from Citigroup. Please proceed. Thank you..

Yes, Hi, congratulations on a good set of numbers. Just had couple of questions. Mohit in one of his remarks mentioned that while hotels and packages net revenue margins have improved, you would like to take advantage of the growing internet penetration.

So does that mean that the margin improvement which you have seen, say in this quarter is not going to be seen say, going forward? And if I look at it from a year-on-year perspective should we then assume flattish margins for hotels and packages? That's my first question..

Sure. On I think the H&P margins we posted close to about 12.9% in our last -- 12.6% last fiscal and last quarter was 11.9%.

We kind of see in this quarter coming back and the margin is coming back close to about 12.4% and we expect that during the balance part of the fiscal also we will continue to be around getting closer to the current prevailing margins on H&P.

Most probably, it will be fair to consider that our margins might show only slight improvement over last year on a full-year basis and may not be a significant increase, because we are also seeing quite a few opportunities in terms of improving the penetration, particularly on the mobile side by offering some amount of tactical discounting on that particular channel because it's getting adopted pretty fast.

So some amount of investment will really is going there. But considering that the overall margins on the supply side have not come down at all, there will be an opportunity to get back to better margins in the coming future..

Okay. Just then a follow-up on that. So we saw that your value per transaction has been almost flattish during this quarter for -- I'm talking about hotels and packages.

So one should then assume that while your transaction volumes would be, say, will remain good but this number of value per transaction could come down in the next couple of quarters?.

For the current quarter; if you look at it year-on-year, the average transaction value has kind of improved by about 7, 8%. And that is actually pretty good considering the fact that our mix is kind of more and more shifting towards hotels as compared to higher mix of packages earlier.

So even with an increased mix of hotels in the segment, the ATVs have held on or improved; seems like a good sign. We should -- quarter-on-quarter we might see some amount of changes on this, but don't really expect any significant changes here on as far as the ATV is concerned..

If I could just add, just keep in mind the seasonality because the next quarter is going to be high season. So a high season quarter you tend to have a higher number, as you would see in this first June quarter as well. It was close to $400, $399 with the sales be precise. Just keep seasonality in mind.

Otherwise, it should be in that -- if you look at first two quarters, we have June quarter high season and September quarter low season quarter. It should be in that range..

Okay. Thank you..

Thank you. Your next question is from the line of Pinku Pappan from Nomura International. Please proceed. Thank you..

Hi. Thanks for taking my question. I was interested in knowing the trend on the personnel costs, excluding the stock compensation. If I look at it now sequentially, it was down in this quarter.

What is the outlook going forward? And what kind of a level should we expect here?.

I'll take that. On the personnel costs, you know, excluding stock based compensation, we expect you know, this to remain largely flattish. Not kind of really planning for any significant increases on that front, at least for the remaining part of the fiscal..

Okay.

And the 6% level that we see in terms of other operating expenses as a percentage of gross bookings, do you think that can be maintained?.

As you would see, what we are trying to do over there when it comes to operating expenses is shift the mix more and more towards marketing dollars, which is more like an investment in terms of driving growth, and you know, making the most of the revival that we are seeing in the domestic sentiment.

So we will continue to see that the operating costs on selling and general administrative expenses will continue to show leverage and we will continue to throw back our dollars into marketing. So the current trend is something that we will maintain going forward for the balance is still good as well..

Okay. Lastly, I would expect your hotel and packages average transaction values to continue to improve given that your outbound -- your international hotel bookings are on the rise.

Isn't that the way to look at it?.

On a full-year basis and on a fiscal basis going forward also, we expect some dilution to happen, as you are mentioning, because the mix continues to shift more and more in favor of hotels. And we are kind of driving that because it also helps improve the overall margin for the segment. So some amount of dilution is likely to be there.

And for more diverse terms of average transaction values for the SH&P segment as a whole, for the hotels and holidays segment as a whole, you can expect slight dilution in the average transaction value because the mix is shifting more and more towards hotels, and the average transaction value is lower compared to packages -- holiday packages..

Okay.

But within hotels, the international hotel bookings, it doesn't move -- obviously right?.

Absolutely, true. So within the hotels segment, we expect that while we will be building more and more into the lower star category hotels and so there will be some dilution coming in from there. But we believe that kind of, you know compensated with the improved mix from international hotels.

So for the hotels segment per se, that would be a fair assumption to take, that we will be able to largely maintain the average transaction value..

Okay. Thank you so much..

Most welcome..

Thank you. Your next question is from the line of Lloyd Walmsley from Deutsche Bank. Please proceed. Thank you..

Thanks, guys. You guys called out some pretty strong mobile app download numbers and the hotel transaction mix in mobile. Wondering if you can give us an update on how much of the usage coming in from mobile is first-time new customers. And then give us an update on how people are using the hotel bookings in mobile.

Is a lot of that same-day? And do you think there's a big opportunity there to bring more of the market for same-day bookings into mobile?.

Sure, Lloyd, let me take that. It's obviously a moving number because mobile is where we have seen the growth, as you noticed as well. So on your first question, we think approximately about 20% to 25% of the mobile users are coming to us for the first time, who would not have transacted with us before this, the first transaction on mobile or desktop.

So that's the kind of incremental demand that we have seen on the hotel side specifically. In terms of just use cases, booking trends, a significant part of the mobile bookings are coming from the last-minute hotels like, -- let's say, from zero to one or two days kind of window.

When it started a few quarters ago, it used to be like 75%, 80-odd-% and now it's about 55%, 60%. So the trend is changing towards even the -- it's even increasing on mobile as well. So you will have zero to three to seven days bookings also happening quite a bit. But it still continues to be majority of it last minute.

And, Therefore, it seems like this is a perfect kind of a use case for mobile, if you think about it.

So, it seems like that in terms of just a shift from our bringing in more and more new incremental demand through mobile platform, online from offline, which wasn't happening in the desktop world, its one big use case seems to be like last-minute hotels as I mentioned.

So these are the kind of trends that we are seeing and we will continue to build on this, because every quarter there is something or the other absolutely new that we pick up. But these are the two key trends that we see at this point in time. .

Then as a follow-up on mobile, you have been able to start growing your domestic hotel supply base I think last quarter as well as this quarter.

How much of that is coming from smaller hotels and guest houses that can now put supply online because of mobile? Is that a meaningful factor in the supply growth?.

So far we've seen not necessarily a material contribution coming in from absolutely like a low category hotels, very, very small value hotels. So far we've actually seen contribution coming in from more two-star, three-star category of hotels.

But I'm pretty sure that as the penetration improves overall and as it goes deal flows beyond the Tier 3, Tier 4 cities we will start seeing the lower category hotels' demand picking up for mobile as well..

So Lloyd, just to add, as we kind of keep increasing the number of hotels that we are offering, clearly on the lines that you mentioned, a large part of this is going to come in from the less than four-star category or less than three-star category. So to that extent, a large part of the additions will be from the lower-star categories of hotels..

Yes, one more additional data point, Lloyd, on this. that We actually did add last quarter an additional 100 cities on mobile as well, so we keep doing that and keep just expanding to reach to just include new additional cities with new inventory coming in, etcetera., as well.

So like I mentioned, as we keep seeing the traction and adoption going up on smaller cities as well, we will keep adding the inventory on those cities..

Great. Thank you, guys..

Thank you. Your next question is from the line of Lloyd Walmsley from Deutsche Bank. Please proceed. Thank you..

Congratulations on a good set of numbers. I just had a couple of questions. First was if you could give us a breakup of your growth between organic and inorganic. And, secondly, also wanted to understand if you could give a breakup of your business between domestic and international, both for the air and hotel segment.

And also, within the hotel segment would be really helpful if you could break it up between the standalone hotels and the hotels and packages..

Thanks, Sangmesh. Mohit here. in terms of all the overall businesses is stated in terms of domestic and international. When it comes to air, domestic is -- our content accounted for, say, about close to about 60% in terms of the overall business and internationally kind of outbound, also accounts for close fort about 25% in terms of the business..

Right..

And that rest, 15% percent is largely inbound or international but not ex-India. So that's a about....

I got it..

When it comes to air. When it comes to hotels and packages, the split is kind of even between domestic and international transactions, more or less. and Might vary slightly by the quarter, by the seasonality, but overall it will, you take a -- or a combined lean season, high season quarter approach.

We kind of almost had an even state between domestic and international..

Right, thanks.

Between standalone hotels, and hotels and packages, are there packages between the two?.

That mix, as I said, depends more on the seasonality. We tend to have a much higher mix of about 70% coming in from hotels. In the case of lean travel season quarters or holiday season quarters, like the one we have reported, and it tends to go to about an even state when we are into a high holiday season quarter like Q1 or Q3..

Right, perfect, thanks.

Also can you just give us some indication of how much your acquisitions are now adding to your overall growth number?.

As we have called -- most of our acquisitions have been in a low period ticket acquisitions, essentially into niche segments where we leverage them. Essentially to bring to – get into operations are at a fast pace, whether it is on the holiday side or on the hotel side.

So we haven't really been splitting that across and if we start doing that at some point in time, we will really get back on that one. .

Sure, perfect. Thanks. Also just a couple more questions. One was on Thailand. I just wanted to understand if you see the outbound travel -- passenger travel data that was published. So year-to-date about 15% the growth we've seen for passengers to Thailand.

Has that had any impact on your business? Are you seeing some sort of slowdown?.

Yes, I think there was an impact last year when at first we had the civil unrest and we did notice particularly, but in order to Bangkok. What we managed to do was actually divert and create packages which were either pass through or transit through Bangkok Airport or other destinations.

This last same quarter I don't think we are now facing any of this because it is a very, very large travel market. We have a reasonable share base but we have managed to counter any of this I think. So clearly I think for us Thailand is back. They have all -- outbreak of the civil unrest that we spoke of..

Perfect.

And just the last one, I know it's really far-fetched, but have you seen any impact of Ebola on the business right now? Any cancellations to any destinations?.

Not for us. You know most of our business -- as you know, even our international business tends to be very either South-East, Middle-East focused, or key destinations in Europe and US, a bit of Australia. So we frankly haven't noticed any as of now. We are watching closely the recent announcements that Australia made on some of the countries, etcetera.

So, obviously it's a concern for the travel sector worldwide, but as of now no impact..

Perfect, thanks so much..

Thank you..

Thank you. Your next question is from the line of Gaurav M. from Citigroup. Please proceed. Thank you..

Yes, thank you for the opportunity again. Just had one question. Are you seeing any increase in competitive intensity from other players? The reason I ask is that we've seen with other Internet segments that with the private equity money entering the segments the competitive intensity across many of the segments have gone up.

So is this the case in case of travel as well or the segments which you look at?.

Yes, Gaurav, it's a good observation, but in travel there hasn't actually been any fresh infusion of capital in, let's say, the number two, three, four competitors. There are two multinationals also there. So I won't say there's been an increased competition.

I think we are seeing folks like Expedia and booking.com are doing more and more on the hotel side, but I don't think there's an impact that has eaten into any of our numbers. You have seen very strong growth numbers, both in air and in hotels. If anything, we have increased share in both.

But that is definitely eating into either some of the smaller competitors. Some business of course continues to move from offline to online. But the sustained level of competitive pressure stays, I think, as both Rajesh and Mohit mentioned in their comments. We have had pricing and aggressive pricing in some cases on mobile and otherwise.

And there we have to stay competitive to a certain level in the market. But I don't think this quarter or even the last was anything out of the ordinary that we have seen. .

Okay. Just one follow-up on that.

Any sense on how much increase is the online cost for advertising, say, in the last one year for you, say, on a per-unit basis?.

There has been escalation on especially on search marketing, on big marketing. There has been some degree of escalation which we do try to convert through smarter buying, more efficiencies, a better conversion rate on the funnel management.

But there is, at least on the large search channels, that there has definitely been a high single-digit escalation..

Thank you..

Certain segments like international hotels where we have only started participating of late. The leverage on some of the key marketing spends in these kind of early segments, where you are going we've gotten into, will only start coming in over the next couple of years..

Okay. Thank you. Thank you. Your next question is from the line of Sangmesh Jatti from QVT. Please proceed..

Sorry, just forgot to ask one thing.

In terms of market share, have you seen any major change in trends in the hotel and air segment? Any segment that you've been gaining market share compared to your peers?.

We did point it out, Sangmesh, we have actually gained share on the air side. As against 12% reported earlier, we have today reported over 13%. So we certainly have gained on the air side. And in spite from our hotel transaction growth there we would have gained some on that side as well.

But we don't basically have any third-party folks to kind of manage it and confirm that. But definitely have gained on the air side..

Okay, thanks..

Thank you. Ladies and gentlemen, that does conclude your Q&A session. Thank you for your participation in today's conference. This does conclude the presentation. You may now disconnect and have a very good day..