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

Lloyd Walmsley - Deutsche Bank Gaurav Malhotra - Citigroup Arya Sen - Jefferies Kevin Kopelman - Cowen and Company Rishi Jhunjhunwala - Goldman Sachs.

Welcome to MakeMyTrip’s Fiscal 2016 First Quarter Earnings Result 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 now available from the SEC or from the company’s Investor Relations Department.

And now I would like to introduce the speakers for MakeMyTrip, Deep Kalra. Please proceed..

Thank you. Greetings to all from the MakeMyTrip offices in Gurgaon, India. I’d like to start by sharing some detail on the strong positive impact of the exploring smartphone penetration has had on Indian e-commerce over the last several quarters of fiscal 2016.

A new wave of Internet penetration via mobile connectivity is clearly underway and it’s driving a great opportunity for businesses that are mobile web and app ready.

In a recent study KPMG and IAMAI estimated that India despite low Internet penetration at 19% has the world’s third largest Internet user base at 278 million of which almost 50% or 159 million are mobile-only Internet peoples.

With affordable smartphones flooding the market, the mobile Internet user base could swell to 400 million by 2018 with overall Internet users close to 0.5 billion mark. In other words India will soon have more smartphone users than there are people living in the United States.

This could also help rural India’s growth story on 2G and 3G connectivity, while urban India most with high speed connectivity on 3G and 4G. In the first phase of the Indian online travel market, commoditized travel products such as seat bookings in trains and airplanes, which do not require rich content, moved online quite rapidly.

In the second phase smartphone technology powered by latest features and increased bandwidth significantly increased customers’ comfort with mobile devices. Such comfort and familiarity combined would be anywhere, anytime convenience of mobile devices guiding exclusive growth in rich media online travel booking such as hotels’ transaction.

This explosive growth is reflected in our Q1 transaction numbers. To elaborate, India’s standalone online hotel transactions for MakeMyTrip increased by 78% year-on-year and India’s standalone hotel transactions via mobile more than tripled year-on-year. From the launch of MakeMyTrip.com till today, we have been India’s leading online travel agency.

In the past 10 years, we have increased our share of the overall domestic air market, which includes traditional travel agencies as well as the airlines themselves, to over 15%. Concurrently, we have been developing our hotels and packages business, which now represents almost half of our net revenue.

Based on our experience in the recent quarters and our reading of the current market environment, we believe it’s time for us to accelerate growth and increase market share in the Indian hotel market as we have done in air tickets during the past decade.

To further strengthen our market leadership, we need to be aggressive in the current fiscal to establish increased distance in transactions, mobile and hotels and therefore we have undertaken proactive business enhanced marketing strategies, the results of which are clearly visible in the operating and financial results for the quarter.

We believe the leading metrics for our stakeholders to track our progress in this phase of market share growth, this transactions growth in our H&P business with particular focus on domestic hotel-only transactions via mobile devices.

Accordingly, we are making some additional disclosers in the H&P segment and also making some changes as to how we present guidance, which Mohit will explain shortly.

At this stage when the hotels market in India is predominantly offline, it is given that we will need to be aggressive in marketing and pricing in order to attract new users online and increase our market share.

That said, we continue to believe that strengthening our leadership in the Indian hotel market will require more than just aggressive pricing. It will need investments across the entire customer lifecycle from the top to bottom of the purchase channel, in technology and people and across the supply chain.

Therefore, we will continue to invest in trusted MakeMyTrip brand in our hotel supply network, in our best-in-class mobile apps, in safe and convenient payment options, and in outstanding customer service from the beginning to the end of our customers’ trip.

In the near- to medium-term, our revenue growth will reflect our aggressive pursuit of market share in the strategic hotel and packages business. However, I do believe we are making the right decision for the long-term and I would like to take this opportunity to reiterate our commitment to staying India’s number one online travel agency.

Before I pass on the call to Rajesh I’d like to talk about our recent investments. Earlier this month, we announced acquiring 28% stake in HolidayIQ of $15 million. HolidayIQ is an Indian travel community site providing user generated reviews for more than 50,000 Indian hotels.

We see great synergies in this deal as our expansive customer base and large installed base of mobile apps pairs well with HolidayIQ's deep repository of hotel reviews.

We believe by leveraging each other's user base and platform, we can significantly scale up the best possible Indian user generated content to help our customers take an informed buying decision on their hotels and holidays bookings.

We have also invested $5 million in Bona Vita Technologies Private Limited acquiring 67% share holding on a fully diluted basis. Bona Vita is a new venture founded by Mr. Amitabh Mishra who has extensive experience in the technology domain. He was the Chief Technology Officer at Snapdeal.com, a leading Indian e-commerce company till recently.

Bona Vita intends to use this capital to build a differentiated product offering in the travel industry. And now I will turn the call over to Rajesh..

Thanks Deep. I will start by reviewing our mobile progress. In the first quarter of fiscal 2016, we delivered exceptional growth in domestic hotel transactions booked on mobile devices. As Deep has shared earlier, our India standalone hotel transactions on mobile platform more than tripled compared to the last year same quarter.

Shopper visits on our mobile app also tripled, while mobile shopper visits to our Web site doubled. We ended the quarter with approximately 8.5 million cumulative mobile app downloads, up more than 150% annually.

In the India standalone hotel segment, mobile transactions accounted for over 43% of our total online transactions, up from 38% just a quarter ago. Perhaps more exciting than where we have been on mobile is where we are going with it.

We are currently rolling out the largest and most ambitious update to our mobile app, the re-designed features, an entirely new interface, revamped booking flows for flights, hotels and holidays, an improved payment module, and deep integration with Google Maps in our hotel booking partners.

We are planning to roll out the Android version in stages soon through the Google Play Store and our iOS app is scheduled to go live by the end of August. Highlight of our hotels and packages businesses in this reported quarter was the India standalone online hotel transaction growth of 78% on a year-on-year basis.

It was a result of our conscious choice to aggressively acquire hotel customers on the back of rapidly changing consumer behavior to book hotel transactions on mobile. Our H&P net revenue mix also reached 48% from 45% in the previous quarter.

On the packages business side, our push on the long-haul travel resulted in high growth of Europe outbound bookings.

We believe at this time when the Indian hotels market provides an increasing opportunity for us to drive online penetration it will be prudent to pursue market-share gains through transaction growth even at the cost of tempered revenue growth in the short-term.

As market leaders, since inception, it will only help us grow both revenues and profitability in the mid to long run as the segment sees increasing online penetration. We also ended the quarter with more than 25,500 domestic hotels and more than 250,000 international hotels being offered for online booking to our customers.

We intend to increase our domestic and international hotel counts organically, meaning via hotels we sign directly and via opportunistic relationships with domestic and international aggregators of hotel supplier.

Speaking of which, I would like to discuss our relationship with some of the recent start-ups like OYO Rooms or Zo Hotels who have come up in the recent times with a focus to play supply side roll by engaging with the property owner to enhance stay experience in the budget category hotel.

We believe this would only help improve the sale of these budget hotels and we would continue to play our role as the key distribution platform in the market for everyone leveraging our user base and brand strength in the market. All of them have been actively partnering with us and this will help us grow our hotel volumes in the budget category.

Moving on to the air ticketing business, as per DGCA the domestic air ticketing transactions grew about 19% year-on-year during the reported quarter. Our Q1 air ticketing business delivered constant currency revenue growth of nearly 18% and transactions growth of about 46%.

Our domestic air ticketing market share exceeded 15%, up from approximately 12% a year earlier. During the quarter, domestic ticketing volumes continued to benefit by special fares offered by carriers and as market leaders, our growth continued to be higher than the growth of the market.

We have also invested behind enhancing the online experience of our customers who book domestic air tickets with us whereby they can now do online date changes or cancellations for all or any of the passengers of excess booked. We have also rolled out the online date change features for our customers on international air ticketing.

And with that, I will turn it over to Mohit for financial review..

Thanks Rajesh. I will refer to our results in constant currency terms and during the reported quarter the Indian rupee depreciated by approximately 6% year-on-year versus the U.S. dollar.

In Q1, MakeMyTrip delivered net revenues of $38.1 million, which represents a constant currency growth of 14.7%, while the adjusted operating loss was $1.6 million versus a profit of $257,000 in Q1 last year.

While this lagged the growth guidance rolled out at the beginning of the fiscal year, it was a result of conscious efforts to drive transaction growth in the India standalone online hotel segment with aggressive pricing strategies particularly on the mobile platform. I'll now elaborate on the financial performance across the key business segments.

For the quarter, net revenue from the air ticketing business was $18.3 million, which represented an year-on-year increase of 17.6%. This growth was largely a result of strong year-on-year transaction growth of nearly 46% partially offset by about 14.9% decrease in the average transaction value.

Net margin on the air ticketing business was down to 5.5% versus 5.8% in Q1 last year and 6.2% in the previous quarter. The Q1 margin was in line with our view of the air ticketing margins for the current quarter.

We will continue to target high transaction growth in the air ticketing business to offset any margin compression during the rest of this fiscal year. Let me now present the financial highlights of our hotels and packages business.

We are encouraged with the rebound in the year-on-year transactions growth of 78% in the India standalone online hotels business. However, the de-acceleration in holiday packages and international online hotel transactions tempered the overall transaction growth in the hotels and packages business to 14.4% on a year-on-year basis.

As a result of this shift in mix from holidays to hotels which reflect the increasing customer preference to buy standalone air tickets and hotels instead of bundled package products, the average transaction value was down by about 13% and gross bookings remained almost unchanged on a year-on-year basis.

Revenue lead services costs from the H&P business grew to $18.4 million, which was a 10.4% year-on-year growth. This was largely driven by the transaction growth I just talked about. The margins in the hotels and packages business stood at 13.3% and were in line with the 13.2% margin we reported during the last fiscal year ended March 15th.

During the rest of the fiscal year, we will focus on accelerating growth in the hotels and packages segment excluding on our EasyToBook business unit which was primarily acquired for its technology assets.

It would be relevant to mention here that the transaction growth in the hotels and packages business in this quarter, excluding the EasyToBook business, stood at 27.6%. I would now talk about the guidance for the rest of the current fiscal year, 2016.

We believe growing mobile penetration among Internet users, increasing online shift in the predominantly offline hotel segment and our balance sheet's strength provides us a unique opportunity at this stage to accelerate market share growth in the hotels and packages segment and further strengthen our leadership position in the key Indian hotels market.

We expect this would entail additional marketing investments and pricing tradeoffs for aggressive acquisition of hotel customers. This combined with margin pressure in the air ticketing business could lead to modest year-on-year growth in net revenue.

Accordingly, to reflect the current business environment and priorities more appropriately, we believe it's relevant to provide transaction growth guidance in the strategic hotels and packages segment for the rest of the current fiscal year 2016 in addition to the net revenue guidance that we have been providing in the past.

We hereby initiate our new year-on-year transactions-based growth guidance for the rest of fiscal-year 2016 as follows; hotels and packages transaction growth excluding ETB of 50% to 55%, and India standalone online hotel transactions growth of 75% to 100% on a year-on-year basis.

In view of the above priorities and focus on hotels and packages and India online, hotel transaction growth which is going to come at the expense of margin and other associated costs, our current guidance on net revenue growth in constant currency is being revised at 10% to 15% for the full fiscal year 2016.

We believe this will be in line with the long-term strategy to take the business ahead. We would now like to open the call for Q&A. Operator, please..

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

Yes, I was just wondering if you can give us an update on the competitive landscape in hotels and packages. Like what do you think your market share is of online and where is that trending? It sounds like competition is pretty fierce there.

And then as we look at your plan to invest to accelerate growth, how much of that is coming from marketing versus should we be modeling lower take rates and what is driving that? Are you seeing competition more on the pricing side or on the marketing side or both?.

Sure.This is Deep. I will take the first part of that. So Lloyd, yes, competition has stayed fairly intense, particularly from one of the players who evaluate Indian players, Goibibo which is [national] and we are seeing pretty intensive pricing currently.

But if you look at the last report out, there is a third party report out, which I think has been there now for about a quarter, and fairly accurate report. I think it’s fair to say that about 7% to 8% of the market has moved online overall and we do have a market share there of close to about 40% of the OTA side of the market.

So after this quarter, that should have only improved as you have seen, very strong transaction growth results on the Indian hotel standalone Indian hotel site, which is the critical part of the business, which we have been focused on and we have indeed, probably further doubled down on transactions there.

So I think we should see some improvements that market is coming online also faster. As we mentioned in the call, there are now various aggregators of budget hotels which are helping bring down these budget properties online faster and then, of course, just mobile penetration and good pricing being offered on mobile is helping this.

So besides Goibibo, I think the rest of the players are still definitely in the market but the most aggressive pricing would be from this one player..

Maybe just the second part of it -- sorry, Lloyd, you have a follow up or should I just state the second part of your question?.

Yes, please go ahead with the second part..

So what is driving this growth and whether it is new marketing strength or the existing pricing strategy? I would say, from our point of view, it has been a combination of the two in this quarter and going forward it will remain so.

And the reason, as we’ve tried to kind of articulate in the script as well, is that given the tailwinds that we have seen in the mobile penetration, on the mobile side and we are very encouraged with the growth that is happening on the app side.

So it is lot of push that we are trying to do on the app side, which is a combination of pushing the adoption or the usage on apps, which is obviously a long-term benefit from our point of view and therefore going aggressively on pricing and trading off some margins out there, and on the other side we are just increasing our investment on the marketing side as well.

So from modeling perspective take rates, we should factor in some compression as I guess we tried to qualitatively mention and discuss as well.

At least for the rest of the year, given that our focus is going to when we’ve guided on the transaction kind of growth that we are targeting is going to be a function of push and a greater push, which will be driven through marketing investment even going forward, as well as aggressive price -- aggressive pricing strategy..

And I guess it sounds like you got a new mobile product about to come or just shipped.

How much of your -- of the competitive dynamics do you think is just having an inferior product and is that something you feel good about with the new app?.

No, it’s actually -- it’s no, definitely not an inferior product. I mean, if cumulative downloads or our monthly active users is any indication, it’s actually from product perspective and the feedback that we get is it’s actually pretty good.

This -- the new launch was in the works and this is an ongoing improvement, ongoing innovation, in terms of just further improving and enhancing the customer experience with just reducing the number of, kind of, attempts that in the final for the customer to actually do the final transaction.

So it was part of a continuous innovation, which was there in the pipeline and it’s going out, and some of this will continue to happen even in future.

So this is not necessarily the last thing that we would innovate on the mobile side, because like we had mentioned that in the past, most of our technology investments are going in the mobile platform and more so in the app world, just consistently enhancing the customer experience overall.

So, I don’t think we should take it as inferior product or even the overall customer experience. Our overall customer experience has also been far better whether it is the booking experience or after-sale experience, we believe vis-à-vis the competition as well.

So, I don't think there is any concern around whether it is an overall customer experience or the product that we have.

It's just to, kind of -- while everyone is kind of busy trying to gain share or trying to build their own share, given that there is movement happening from offline to online bookings, we just want to make sure that we keep leading our position there as well..

Our next question comes from Gaurav M from Citigroup. Please proceed..

Just a couple of questions. One is on the guidance, if you can just give us the starting point of how should we look at it.

While we know the hotels and packages growth ex-ETB is 50% to 55% in India, hotels standalone growth is 75% to 100%, right? If you could just give us a starting point that will become quite helpful for us to sort of use it for modeling perspective? That's the first question. And I'll ask the second question later on to you..

Gaurav Mohit here. On the guidance number, I will cover both the transaction growth guidance as well as the net revenue growth guidance as we rolled out.

On net revenues, we've kind of, as Rajesh and Deep was just explaining, we clearly believe that currently driving customer acquisition on the mobile side and customer retention over there, which will kind of pay-off in the longer run, we believe will take us to be very aggressive on the pricing side, but it will be on India Hotels bookings, which means that we would expect margin compression to be coming in on the hotel's transactions, as a result of which we believe that the net revenue our growth will look muted as we keep on increasing our share of bookings coming on the mobile platform.

So clearly, a large part of -- and as we have called out earlier, most of our kind of net revenues growth guidance has been based on our net revenue growth that we see in the hotels and packages business.

Now that we are kind of calling out further compression in margin, we believe the overall net revenue growth will come down from what we had called out earlier to the new range that we have put out.

And also just to kind of make it lot more comprehensive and easier to kind of put together, we thought it was relevant to therefore call out what is the growth that we are now targeting in the hotels and packages business overall, and also in the India standalone online hotel bookings.

So if you look at it while for the reported quarter for hotels and packages excluding ETB, the transaction growth was in the range of about 27% or so, we are actually calling out much higher transaction growth, over 50% for the rest of the fiscal year as we believe we'll be able to see a lot more traction as we kind of focus all energies on the hotels and packages side, including on the pricing side.

And along with this we'll see lot more growth coming through on the India standalone hotel bookings where we are guiding in the range of about 75% to 100% growth on a year-on-year basis for rest of 2015..

Mohit, I actually just wanted to check that 360,000 number for hotels and packages transaction, ex-ETB, which grew 27.6% year-on-year and which you are guiding to 50% to 55%.

What was this number for the whole of FY15 please?.

FY15?.

That number was 282. That number was 282, we've actually called that out on the 6-K that we have filed for read as well..

You are 316, sorry I'm taking time. Your number which is -- just one minute, please. 282, sorry, my mistake, I missed that. The second question is for Deep.

Since you mentioned about OYO Rooms, Zo Rooms and such guys who are sort of aggregators of budget hotels, wouldn't they also want to not remain just as aggregators and try and build their own platform to increasingly get traffic directly onto their platform rather than have an OTA like you or ibibo or anyone else? So wouldn't the game plan for them would be to sort of take away the traffic increasingly onto their own Web site and put -- and how much of a risk would be that from a volume perspective?.

Yes, no problem, it's a fair question, and I think we've kind of spoken about this earlier as well. As you would note even now, we have actually pretty large, significant sellers, probably the largest sellers for most of the big aggregators.

There are over 10 such credible players and there are probably 25 aggregators, some of them regional, the ones I called out were the larger ones, but there are quite a few other ones also recently getting funded.

What we see this doing in the immediate term is definitely bringing more hotel supply in the budget category online much faster than would have happened otherwise because these independent hotels were run traditionally, they were coming, taking their own time to come online.

That has got accelerated no doubt with the branding, with the better product, with the higher awareness, et cetera, we're seeing that come.

As of now, we have not seen any of the aggregators, I'll call them that, in the budget category wanting to go direct only and frankly it does not really makes sense because if you want to look at some of the parallels, I think China has got a couple of parallels, and if you look at let's say Hanping or a couple of other chains there, very similarly they were working closely with OTAs as well as doing direct business.

So, this is to be seen as a budget chain, which has grown dramatically but is under one brand umbrella and is trying to give a standardized product in a category which hitherto had very -- had no real standard.

We see this as quite positive in the mid-term as well and even going forward if we see it from a consumer point of view customers are not, we don't expect in this category to have this huge brand deference. I mean this is clearly a price category.

We have a lot of customers in this category and when -- we have surveyed them, we find the most important thing for them beyond price is location and its quality of service. So, I think they are filling in the gap of quality of service and the customers want to see the choice.

And as you know, most of these hotels have come up with branded, new branded or newly rebranded hotels are coming up in fairly congested areas where there are multiple hotel options, very often near airports or near railway stations or new big bus, interstate bus depots, et cetera.

You'll find numerous choices and that's what the consumer really wants to see. We are not seeing this as being something which is going to go direct alone and that is not also what we've heard from any of the folks we're working with. Actually we're working quite closely with all of them with the bigger players.

So we don't see that as a risk at all, in fact we see that as a positive factor and therefore call that out in the script..

Just last question, Mohit that number which you said for 282 was for the quarter ending June 2014. I actually wanted for 12 months ending March '15 if you can give us the number for the hotels and packages number of transactions and EasyToBook transactions, please..

I could give you readily for the last quarter. It stood at about 304.5..

And maybe I'll find into this thing..

Our next question comes from the line of Arya Sen. Please proceed..

Firstly, I mean, if I look at the number of transactions in packages, which is hotels and packages, excluding ETB minus standalone hotels, there seems to have been a significant decline in that, about 20% odd.

So, if you could discuss why that has happened and what's the trend over there?.

Arya, can you please repeat your question we just missed the question..

So if I look at the number of packages, which is basically your hotels and package excluding ETB, which is $282 million minus standalone hotels booked, so I would presume most of that is basically packages booked online. So that in first quarter this year compared to last year, there seems to have been a 20% decline in the packages side.

Why has that happened and what's the view going forward over there?.

I got it. Let me just explain it to you. So, couple of reasons actually; one is from a long-term perspective, it's actually quite positive and quite strategic in nature, which is in the domestic packages business there is beginning to -- we have started to see these shifts happening to a bundle product buying to an a la carte buying.

So, if you really see, which is kind of reflecting in this quarter result as well, both standalone domestic, air transactions growth has gone through the roof about 46% odd and standalone hotel transaction also at about 78%. So that's one reason. The other reason was temporary for this quarter.

They were two or three events that happened which was -- I mean, it was kind of a carryover effect of the Nepal earthquake or the Kashmir floods that happened that kind of caused some muted growth on the packages bundled products for hill stations specifically and that kind of caused a little bit of a decline in growth as well.

But on the positive side of it, as far as outbound packages were concerned as we called out, long-haul Europe it did quite well. So Europe bookings were -- did grow actually significantly last year. But then on an overall basis, the reason for slower packages growth was this two-fold..

So, I mean going forward what’s the view on that? So will it continue to decline like at this rate or even at -- so effectively even if you are talking about 0% to 10% kind of decline, not even 20%.

I mean effectively this part of the business will not grow much, is that how we should look at it?.

It will -- so Arya, what we are seeing it -- so we want to see -- this is just one quarter that has happened.

What we are very clear about it is that the shifts will continue to happen more and more because it's also a function of the flat sales that are coming out from the domestic carriers and therefore lot of the people are actually booking the flights on discounted price first and then they are booking the hotel later.

That shift will continue to happen which is like I said it is actually a good thing from a long-term standpoint, from an operating leverage standpoint. But for the overall holidays business, overall packages, would that mean that the packages would actually not grow? That I would not say.

The rate of growth might be slower, much slower than what we’ve been talking about in the online transactions growth side. But I wouldn’t say that it is going to go on a decline yet. I would wait for another quarter or two for us to be able to kind of jump to that kind of a conclusion.

So right now, for now I would take it as a slower growth on packages side and a higher growth on standalone a la carte hotel side with the kind of guidance that we’ve given on the hotel side very clearly and picking up the kind of full year historical kind of trend on the packages growth side and then estimate that rather than just taking a very pessimistic view of that..

I thought I would just add on to what Rajesh mentioned.

So if you also kind of look at it on a year-on-year basis, even a mix of India online hotels, within the MMT excluding ETB transaction numbers has increased from about 48% to 49% to about 68% to 69% now, which effectively means that we can continue to grow this category at the high growth rate that we have kind of grown it in the last quarter and even it’s kind of -- the rest of the categories which is packages, et cetera, grow small or even flatter -- remain flattish through the year, we should overall see good amount of transaction growth coming to the overall segment.

So basically the mix is getting better in terms of India hotels composition..

And what sort of growth was there in packages in the past few years? If you were able to look at FY13, '14, '15, what sort of growth rate did packages see in those years?.

So in the earlier years, clearly packages had good growth and that’s how the packages used to, until about three to four years back, account for almost 80% of the revenues on the hotels and packages segment used to come in from packages.

But as you see if you kind of notice particularly over the last couple of quarters or say over the last one year, we’ve clearly seen that the mix shift is happening rapidly in the field of hotels compared to packages and kind of called it out. Clearly there seems to be a change in customer preference as well.

I mean, there is more and more of online booking happening and customers -- and this is also getting aided by the fact that there are a lot of special offers being rolled out by airlines for advance purchase of air tickets and therefore customers are kind of booking those air fares early in the dates and then following it up with standalone hotel bookings rather than buying bundled packages because then they get the benefit of discounted air fares which account for a large part of the portion of the packages price..

Right. And how has the…...

So Arya, I guess you were also looking for historical growth rate. So historically the packages we take used to be between 30% to 40%..

And also the average ticket size in standalone hotels, how has that changed, I mean what has been the change in this quarter over the same quarter last year, I mean -- and how much of that change is sort of related to aggressive pricing and how much of it is related to maybe you moving towards smaller hotels which are lower ticket size?.

So if you look at it in terms of overall ETBs, how they’ve been trending on the online hotel fees for India hotels, there has been a little bit of a reduction in the average transaction value close to about 14% to 15% in dollar terms but effectively when you see it adjusted for currency rates it’s kind of in single digits.

And large part of it is actually coming through on account of -- particularly on the mobile side..

And last sort of request from my side, if you could please share some of the numbers for standalone hotel given that you are giving separate guidance for that on gross booking and net revenue both for last full year as well as the last few quarters if you could share those numbers?.

Sure Arya. So we kind of have started with [this] overall composition of transactions that kind of started increasing significantly within the hotels and packages segment for the India hotels, we thought it was relevant to call that out because right now it's more like doing transactions.

But I get your point and we plan to see what we can add [exposure] as we go along cross bookings or revenue as well..

And if I could just add to what Mohit said earlier, from a model perspective for now and we kind of obviously thought about it, we have also given an H&P minus ETB number so -- and you will have the transaction value, the blended transaction value also with you and we’ve also given the revenue guidance.

So I guess it will be -- and the blended transaction value is kind of also reflecting the share shift that I spoke about earlier that is happening from packages to standalone hotels, et cetera, as well. As it has -- as you would perhaps noted, year-on-year it has gone down from $399 to $322.

So I guess you should use that and use the H&P transaction guidance number to get to the gross booking and the take rate could be the balancing figure to get to the revenue numbers because revenue guidance is also there.

So I think right now that could be used for modeling but as we go along we would definitely keep like -- we've started doing more additional disclosures in the segments, which is fastest growing and we’ll keep adding as we go along, we’ll keep adding more as and when required..

Our next question comes from the line of Kevin Kopelman from Cowen and Company. Please proceed..

Just really a quick follow-up on take rates.

Can you talk more about underlying trends in your take rates that you have agreed with suppliers excluding pressure from coupons and discounting things like that across each travel segment?.

From a take rate point of view or margins from the suppliers, we haven't really seen any compression on that count and that kind of remains as is or has only kind of being improving over the last one-year because with increasing volumes that we are now able to separate for our partners, we clearly are able to kind of driving more performance in bonuses or annualized incentives from them which are volume linked.

So we haven't really seen any significant impact or contractions from the supplier end market. What's better reflected is the incremental pricing that is getting discounted or effective discounting that is happening with customers which is really reflected in the net reported margins. No real happening on the supplier side..

Our next question comes from the line of Rishi Jhunjhunwala from Goldman Sachs. Please proceed..

A couple of questions. Firstly, if I remember it correctly, last quarter you had mentioned that one of the reasons why your net revenue margins in hotel business went up was because of superior growth in standalone hotels in India.

I can see that that growth still remains pretty strong and in fact remains the growth driver for the overall H&P revenues.

So despite that, why have you seen such a sudden decline on a Q-o-Q basis on the revenue margins?.

Mohit Kabra:.

47.6:.

Secondly on the overall guidance side for the revenue growth….

We are losing your voice..

So, I mean on the overall guidance side, you have cut it down from 22% to 26% constant currency to around 10% to 15% and it seems like a large part of that is driven by a deceleration in growth in the H&P. And you have talked about how ETB has impacted your overall growth.

But how has that changed versus previous quarter because I am assuming that would have been the case in the previous quarter as well? So what exactly changed that led to such a significant cut in the guidance?.

Actually Rishi, your voice was coming and going. So last part of the question was absolutely not audible..

So let me repeat that.

So basically, I was saying that your ETB has impacted growth in this quarter but what has been the reason for such a significant guidance cut considering it would have there in the previous quarter as well for you guys as far as constant currency growth is concerned?.

I will just take that Rishi.

So couple of things over there compared to previous quarter and this kind of -- remember, two or three things which are kind of playing out over there; one, clearly as we had called out not really kind of driving growth and ETB pricing, because it was more -- well that’s an acquisition to get the technology access that we had with them rather than driving international hotel bookings coming in from hotels business [Technical Difficulty].

That's one reason that kind of we can [Technical Difficulty] overall that revenue growth. Secondly, the increase -- one thing that we have kind of [Technical Difficulty] beginning in the hotel site another reason why we believe that the overall net revenue growth is much softer compared to the kind of transaction growth that we had hold of.

That's another reason for [Technical Difficulty] guidance on net revenue growth and thirdly as Rajesh was pointing out, overall there seems to be [potential] for customers to keep from buying bundled packaged products to buying standalone hotels, which currently are seeing lots of discounting than in the past and therefore, on a better scenario on the net revenue [Technical Difficulty]..

We have no further questions. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Thank you and good day..