Welcome to MakeMyTrip Fiscal 2013 Third Quarter Earnings Call. The company wishes to remind you that certain statements made on this call are considered forward-looking statements within the meanings 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 25, 2012. Copies of this filing are available from the SEC or from the company's Investor Relations department. The company will be recording today's call, which will be made available for a 2-week replay. Later, we will be conducting a question-and-answer session and instructions will be given at that time. I would now like to turn the call over to our host, Mr. Jonathan Huang. Please go ahead, sir.

Hello, everyone, and welcome to our fiscal 2013 Q3 Earnings Call. We will be using certain non-IFRS metrics, which are reconciled with IFRS metrics in our press release tables. We believe that our profitability and performance will be better demonstrated using these metrics. Starting off the call today is Deep Kalra, Founder and CEO of MakeMyTrip, who will give us an update on the quarter. Joining him is Rajesh Magow, our Co-Founder and Chief Financial and Operating Officer, who will discuss the financial results. Also with us is Keyur Joshi, our Co-Founder and Chief Commercial Officer, who will be available to answer any questions that listeners may have at the end of this call. Now, let me hand the call over to Deep.

Thanks, and thank you for joining our third quarter conference call today. I'm happy to share that in the fiscal third quarter, makemytrip.com continues to be the #1 OTA site in India, and as per December's comScore data. Our total monthly unique visitors surpassed 8.5 million and we achieved more than 136 million page views on makemytrip.com. In the quarter, we achieved revenue less service costs of $22.4 million which was in line with our guidance and expectation. However, we did incur a loss of $0.07 on an adjusted diluted EPS basis as we continue to invest in changing our revenue mix towards more hotel and packages. I'd like to now give you color on each of our revenue lines, hotel and packages, air, and emerging or other segments, starting with hotel and packages. As you can see, we had a very good quarter in our Hotel and Packages business, where we witnessed 68.2% growth in transactions over the same period last year. In line with our strategy, we took it upon ourselves to drive more domestic hotel bookings online which began with broadening our consumer selection, improving the online shopping experience and ensuring customer delight. We believe our comprehensive approach has continued to strengthen and increase loyalty towards the MakeMyTrip brand. In Q3, we continued to broaden the selection for our customers and now, offer over 10,700 domestic hotels and guest house properties. During Q3, we also enhanced our consumer search and booking experience by launching the ability to book domestic hotels across our mobile platforms. We're pleased to see high levels of engagement for hotels coming via our various mobile offerings. To further their convenience, customers are now able to pay us upfront or at the hotel and are guaranteed a full refund if they see a mismatch…

Thanks, Deep, and hello, everyone. The highlight of the quarter was our robust performance in hotels and packages. During this peak travel quarter, we recorded over 68% year-on-year growth in transaction which was supported by the strong growth in online hotel bookings and the consolidation of hoteltravel.com hotel transactions during the back half of the quarter. As a result, on constant currency terms, our net revenues and gross bookings grew by over 52% and 67%, respectively. Given the success of our previous efforts to drive more offline customers to use MakeMyTrip.com, we saw a slight decline in our net margins to 11.1%. As for our Air Ticketing business, as I'm sure you all know, the Indian airline industry challenges continued into Q3 and contributed to the dilution of our air net revenue margins. We focused on gaining share in the domestic air market and grew transactions by nearly 16% year-on-year, while the overall passenger market shrunk by 9% in the last quarter. However, our net revenue margin reflected lower commissions and incentives from our partners as domestic low-cost carriers contributed more towards our Air Ticketing business during the quarter. Additionally, we continue to manage booking fees to grow market share and this strategy -- and that strategy also contributed to the dilution of net revenue on margins down to 5.3% from 6.5% in the previous quarter. As Deep highlighted earlier, we will look to balance the fees charged in order to increase net revenues while possibly moderating our total domestic air market share. Now let's discuss our profitability. Our bottom line performance reflects the contracting air passenger market which continue to make transactions growth difficult. During the quarter, our lower air net margin directly impacted net revenue which directly affected operating profits as certain semi-variable operating expenses could not be scaled down in the same proportion. However, the higher air fare combined with our focus to gain market share did result in higher year-on-year growth in gross bookings and transactions. We want to emphasize that even as the industry remains turbulent, we are, as we have said all along, focused on building our business for the enormous opportunity that the Indian travel market presents. Although we don't expect an immediate return to profitability, we are very optimistic about the future and believe you will see tangible results from our ongoing cost rationalization in the next fiscal year. Lastly, we are maintaining our fiscal 2013 revenue [indiscernible] quarter guidance at $89 million to $91 million at an average exchange rate of INR 54 per dollar for the fourth quarter. This reflects our assumptions of 13% to 16% net revenue growth on a constant-currency basis. Now, let me turn the call back to Deep for his closing remarks.

Thanks, Rajesh. As we enter the final quarter of the fiscal year, we believe the recent government announcement on aligned foreign direct investments by foreign airlines is a step in the right direction. However, it's likely to take a few quarters before it has resolved the air domestic industry issues. We remain confident and excited about the vision we have for our Hotels and Packages business for the coming fiscal. With the acquisition of HotelTravel.com, we are flying fast ahead of competition by offering Indian travelers increasingly more choice when they travel overseas and arming them with user friendly tools, whether via desktop or via mobile. We believe the recent overseas investments we've made will accelerate our overall business mix more towards Hotel and Packages revenues, improve net margins and operating leverage. We also believe that there will be better times ahead for the domestic airline industry as carriers gradually increase capacity, work to strengthen their balance sheets and innovate on pricing strategies to [indiscernible] passengers to fly more in India. Now, I'd like to open up the call for questions.

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

Looks like you had some strong gross bookings particularly on the H&P side. I was wondering if you guys can quantify how much of that came from acquisitions. I think you gave us a transaction growth on an organic basis, approximately, but in terms of gross bookings, can you quantify that? And then, are the economics of those acquisitions any different such that they may have been part of what impacted the H&P take rate in the quarter, such that it may be structurally a bit lower going forward, or is that something specific elsewhere in the business?

This is Rajesh. Just to answer your first question, bulk of our growth in this quarter actually had come from organic business in MakeMyTrip and not a lot that has come from inorganic because we had only 2 months numbers that got added from HotelTravel acquisition. So you know, we are not disclosing this but I can tell you, majority of the growth came in from the organic business. To answer your second question, the dilution in Hotel and Packages items, I think, very briefly, we touched upon in the script as well. What we tried to do was -- as we were focusing on transactions growth, we did go out and give selective offers in the marketplace. So there was no real dilution of margin that happened on the supply side. So from the supplier, whatever we were getting was intact. We just, in light of our focus to grow transactions growth from an offline market to online, we gave some selective offers in the marketplace and that kind of diluted a little bit of our margin in this quarter. Having said that, if you look at 9 months ended margin, it is still in the range of 12%, 11.9% to be precise.

So you don't see anything -- you don't see it under pressure going forward really it's more discretionary?

No, not really. As we've been growing our volumes, with the growth of this kind of volumes, we don't see it getting affected from the supply side. However, on the market side, on the demand side, we will have to, like I said, just to incentivize booking online as we see very strong trends emerging from the consumer side, the shift happening from offline to online that it will continue on a selective basis but we don't see any impact happening from the supplier side.

Great. And then on the air side, just curious if you think air take rates or net revenue margins stabilizing around where they are now or potentially even come up if you pass on more consumers, how should we think about those looking out?

Well, that's a good question as well. So this quarter, as you would have noticed, we are at about 5.3% and I said, it's a function of capacity constraint, higher fares, all the airlines particularly thinking too much on the -- thought focused on the bottom line. In terms of whether we will see going forward any upside on this margin, I would refrain from kind of going -- being very optimistic around it. It could be small upside here and there, but largely, it is going to be around this kind of range, so 5.3%, 5.5% kind of range.

Your next question comes from the line of Manish Hemrajani.

Coming from the question that Lloyd had on contributions from HotelTravel, since you had only about 2 months of contribution there, how is the growth there compared to the overall growth in H&P for the company?

So growth in hotel travel in this quarter was modest, but we do see a lot of potential because there's a lot of investment that we are making, integrating the 2 companies, exposing our hotel inventory on the hotel's travel site and vice versa. So we are quite optimistic of the growth going forward on hotel travel, but in this quarter, specifically to answer your question, it was modest growth.

Sorry, Manish. I'm Deep. Just to add to that, we -- as I mentioned, that we've seen the first kind of integration already, where a lot of the hotel travel properties are now available for Indian customers. We've also seen some of the other things when we look at the company that there is a good possibility to exchange best practices and to cross-pollinate. So I think all the stuff that we've been doing as a very analytical approach on the supply side of hotels, cross billing direct connects and then working on the market management at a very detailed level. We think that, that is one of the areas we will be able to see some of the upside coming in the few quarters ahead of us from HotelTravel.

Got it. And are the margins there comparable to what you have on the MakeMyTrip site?

Yes, more or less, we have the same range.

And then switching to air, what's your outlook for air in the current quarter given the price discounting you've seen in India of late. Do you see a sustainable rise in demand past quarter and do you think we could turn positive on passenger volumes overall to the industry this quarter?

So, Manish, I think on the macro situation, 2012 numbers came out overall the year was significantly lower among the first years ever -- full years where demand was lower than the last year. The quarter as I mentioned, was actually 9% less than the same quarter last year. We don't see the situation remodifying itself immediately because capacity is not imminent, except a few planes being added by some carriers. The SDI comment made, as you might know as well, a lot of coverage in the Indian press. We'll probably take another few weeks, if not 1 month or 2 to get, I guess, to finally see investment coming in. And then, we will see an add capacity. So I think, we're going to have to wait a while. In terms of MakeMyTrip growth, we have managed to grow transactions against the grain. The growth in transaction, the 16% was in the same light where actually the industry was 9% down. We've been gaining share. But as mentioned by Rajesh, I think, we are going to tactically be paying with convenience fee and the discretionary fees charged to increased revenue and which might have some impact on the share, but should have only a positive impact on the revenue.

Got it. So -- talking about share, can you cite some of the factors that helped you gain market share here? And should we expect to see further gains? And where do think your share could get over the next 2 or 3 years?

Yes. I think it's fair to say it was a combination of factors which have helped us gain share in this industry. Obviously overall, the move from offline to online is helping all the online players including supplier direct. But I think, some of the stuff we have done in terms of detailed features, functionalities which are helping the consumer, both the habitual consumer -- stuff like one-click checkout and InstaBook, as we call it, has been helping -- it's been a feature we released in the last quarter and we have seen a lot of traction out there. Some of the features released this quarter have also helped a fair deal -- I think, the tips program is actually seeing a lot of traction and consumers are obviously liking that, where they are being helped towards looking for the best fare or the best purchases. Overall, a lot of hiding factors on usability I think, have helped. So usability has definitely been the single most important piece which has helped us in otherwise a pretty difficult climb as you are seeing a lot of suppliers going direct as well. I would definitely work to that. I think also, our contracting team has done a good job when airlines have launched new routes. We've definitely been very proactive about that. There's also been a good increase with fee incoming from our mobile offering. So I think, mobile growth has been strong and is definitely helping in the overall buy. As well as Flight Plus Hotel is also picking up nicely. And lastly, I think, we're seeing fairly good repeat rates and loyalty in this segment which sees fairly frequent purchase at least by a certain segments of Travelers, particularly business and small and medium enterprise travelers. We are seeing strong loyalty kicking in. So I think overall, these have really been big reasons for the increase in share from 10.8% in the last quarter of the last fiscal to 13% as mentioned in December. Going forward 2 or 3 years it's pretty hard to comment on shares. But I -- we are confident we will hold on, if not increase, our share over that timeframe, in this increasingly competitive market, not just by other OTAs but also by suppliers with their direct offerings, but we're very confident that we will continue to hold on -- again, if not grow our market share.

Got it. So most of the share shift has been from offline to online. Are you seeing some share shift from other OTAs as well?

Yes. So I think that it's probably not what I was intending to say. I said while the industry does move so we definitely gained -- overall the online industry has gained some. But we have got more than our fair share so I mean it's hard to quantify. We definitely gained ahead of other OTAs on the basis of market reports and other inputs that we do get. And if you look at [indiscernible] and the traffic has definitely moved, our gains have been higher than competition.

Got it. Last one from me. You did do some buybacks last quarter but I would have expected you to be a little bit more aggressive on that front given your share prices. What's the rationale there to hold back on getting more aggressive on the buyback part?

It's essentially a program which is -- we put in place a program and we've got the threshold levels. So once it's a program, it's actually part of an automated process and it's also balancing that we do internally between cash which is critical as the industry goes through a tough time. And again, we believe that fundamentally, the share price is going to move up with performance and the buyback temporary pop up in difficult times. So fundamentally, I think, we're going to use that instrument with discretion.

Yes. If I could just add to that, Manish, we also have, given our trading volumes, we actually have an actual act of -- as part of this program that how much maximum can you buy on a day. So we've been constantly keep looking at it, what are the volumes are, how we're able to keep moving and all that, and we keep moving at the right and appropriate time, wherever we think that we got to kind of intervene and do more buybacks and we will -- as we go along, we will continue to do that as well.

The next question comes from the line of Molly Branch [ph] of Pacific Crest.

This is Chad. Can you guys hear me?

Yes.

I wanted to ask you a couple of questions. Can you talk a little bit more about your efforts to reduce cost and how soon that could help maybe improve profitability? And then as we think about fiscal '14, should we think about margin more in line with fiscal '12 levels or is that potentially too aggressive at this point?

Hi Chad, this is Rajesh. On the cost rationalization side, there are couple of areas that we are looking at very closely and pretty much an ongoing effort. So we, across the board, keep looking at, as we have been highlighting in the past as well, opportunity for automation, wherever possible just to make sure that on the fulfillment side, especially that we keep moving. Customers online are increasingly, we started with domestic air and we've been moving from segment to segment to international air to hotels in terms of just taking care of their requests so whether they are refunds or cancellations or any kind of general queries, et cetera addressed online so that you don't have to really hire people in those areas as we grow our business. So that has been a continuation -- a direct and an ongoing effort which has been there for the last couple of years and we've been aggressively looking at those opportunities. And besides that, we have also looked at, given our B2C market share on the domestic air side grew fairly robustly. Overall market shares are touching at 13% and the fact that the margin overall, on the air side has diluted. We have revisited our B2B air strategy and kind of ramped that down which had a certain number of people putting that business on that channel because we don't now believe that reaching out to those customers or expanding or growing through the B2B channel will be important moving forward as we see that the B2C growth has been fairly robust. So we've looked at that specific area besides the ongoing, like I said, automation initiatives. So effectively, in the cost line items, looking at people cost and looking at SG&A specifically and within SG&A, outsource cost specifically as well. In terms of operating profit margin, for the next year as you know that we haven't really been guiding the market on the operating profit side. So we'd refrain from giving any kind of a general guidance on that. We'll keep it limited to the revenue guidance and that's what we believe at this point in time that we would like to share. And I guess, you will have to watch out for another quarter in TV print how are we doing on profits and then, kind of estimate the operating margin going forward.

I would now like to turn the call over to management for closing remarks.

Thank you for joining our fiscal third quarter earnings call today. We look forward to speaking with you on the next quarterly call in May.

Thanks, everyone.

Thank you, all.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a good day.