MakeMyTrip Limited (MMYT) Q4 2022 Earnings Call Transcript

MakeMyTrip Limited (NASDAQ: MMYT) Q4 2022 earnings call dated May. 25, 2022

Corporate Participants:

Vipul Garg — Vice President, Investor Relations

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Mohit Kabra — Group Chief Financial Officer

Analysts:

Gaurav Rateria — Morgan Stanley — Analyst

Prashant Katari — — Analyst

Vijit Jain — Citi — Analyst

Sachin Dixit — — Analyst

Presentation:

Vipul Garg — Vice President, Investor Relations

Hello, everyone. I’m Vipul Garg, Vice President, Investor Relations at MakeMyTrip Limited. And welcome to our fiscal year ’22 Fourth Quarter and Full Year Earnings Webinar. Today’s event will be hosted by Deep Kalra our company’s Group Chairman and Chief Mentor, joining him is Rajesh Magow, our Co-Founder and Group Chief Executive Officer and Mohit Kabra, our Group Chief Financial Officer.

As a reminder this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today’s event. At the end of these prepared remarks, we will also be hosting a Q&A session. Furthermore, certain statements made during today’s event may be considered forward-looking statements within the meaning of the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, are subject to inherent uncertainties and actual results may differ materially. Any forward-looking information relayed during this event speaks only as of this date and the company undertakes no obligation to update the information to reflect changed circumstances.

Additional information concerning these statements are 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 July 13th 2021. Copies of these filings are available from the SEC or from the company’s Investor Relations department. I would like to now turn the call over to Rajesh for his remarks. Over to you, Rajesh.

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Thank you, Vipul. Welcome everyone to our fourth quarter and full year earnings call of fiscal 2022. I hope everyone joining us today is keeping safe and healthy. India went through third COVID wave with Omicron variant that started in December 2021 and continued during January and February. While the reported cases were high, severity of infection was low as compared to the Delta variant wave, possibly aided by significant vaccine coverage, which has now crossed about 1.9 billion doses.

Travel slowed down with the onset of Omicron, but picked up again later part of the quarter when Omicron started to recede. Demand started to come back especially for leisure segments albeit momentum remained under pressure due to inflationary pressure due to price increase of fuel leading to high air fares. This full fiscal year overall was the second pandemic-impacted year for travel sector with robust recovery phases in between in between waves. However, what is encouraging now is that pandemic related movement restrictions have been lifted across India and pretty much in the rest of the world except China, leading to travel coming back to near normal. Consumer sentiment for travel, especially for leisure is quite positive right now and more and more people are looking to travel for vacations in 2022.

Government of India also opened commercial international flights from 27th March and this is helping revive the international travel demand as well. In fact, as we enter summer holiday season, we are witnessing pent-up demand for both domestic and international leisure travel. While the interest and demand momentum has been strong, we are watchful of geographical — geopolitical crisis, inflationary pressures and its ripple effects on the overall economic environment and travel demand in future. As highlighted earlier, there has also been a significant improvement in online buying behavior during the pandemic leading to growth in Internet users across all demographics. As a result, while other e-commerce categories have seen accelerated growth in number of transactions, we expect online travel sector to benefit from the shift in the future as things normalize and more and more people start to travel.

Currently, there are 622 million active mobile Internet users in India, which are expected to grow to about 900 million by 2025, driven by smartphone penetration. Similarly, online shopper base is expected to reach 220 million by 2025 from the current base of about 160 million. We are also aiming to increase our online penetration to bring new users to transact on our platform by not only continuing to focus and grow our leading travel use cases of air, hotels and packages, including alternative accommodations and bus, but also investing behind adding and growing other travel and adjacent use cases in line with our already called out vision to be the Travel Super App.

We recently expanded our rail and intercity cab booking services with the redRail on redBus platform as well as an independent redRail app and Ride our intercity cabs to make our redBus platform a comprehensive ground transport services platform now. This would help booking any of the services super convenient for ground transport travelers. We also believe both rail and cabs offering will be a significant source of new customer acquisition in the coming years.

With our promise to add ancillary use cases in this reported quarter, we launched Global Cash Card by TripMoney, our travel focused fintech initiative to cater to forex needs of our international outbound travelers. In terms of targeting new travel growth segments apart from going deeper in penetration to Tier 3 and Tier 4 cities on the B2C side, we are now aggressively growing B2B corporate travel segment with our SMEs and large enterprise product solutions via myBiz and Quest2travel brands that are becoming increasingly popular with the clients. In addition, we are also driving B2B2C demand through our myPartner and My Affiliate solutions.

Coming to the highlights of Q4 quarter now. During the reported quarter, despite the headwinds and slowdown in business compared to the previous quarter, we were able to ensure sustained profitability in operations with gross bookings touching a $1 billion. In our air business, we continue to maintain our leadership position. We continue to gain market share and our share in Q4 ’22 were 30.1% as compared to 29.7% in Q3 fiscal year ’22. For domestic traffic, leisure destinations like Srinagar, Dehradun, Leh have shown more than 100% recovery. High airfares due to increase in fuel prices affected the demand momentum to some extent, but we continue to see steady recovery on the back of pent-up demand in leisure travel during summer holidays. International flight daily departures supply has also now started to scale in April 2022, nearly 65% of the capacity has come back overall as compared to January 2020, which is prepandemic. U.S., Maldives and Nepal are key destinations wherein capacity recovery has touched 100% while U.A.E. is at about 85% of pre-COVID supply levels. As things open further, demand recovery will be led by popular destinations for Indians like Thailand, Malaysia, Singapore, Indonesia, Dubai, Maldives, all of Europe, etc.,

Coming to our hotels packages and alternative accommodations business where demand pattern was not any different from January and February months where January and February months were somewhat impacted by Omicron, but steady recovery starting March on account of leisure travel, weddings, social and corporate events. Supply of rooms has now started to stabilize and we have seen steady demand recovery across all price segments. Most of leisure destinations are already clocking volumes above pre-pandemic levels and the outlook for Q1 remains strong. We continue to improve our product offering and bring more and more hotels online. As mentioned earlier, we are going deeper into the country and we have now hotels listed from 1600 cities as compared to 1300 cities in fiscal year ’20. This extensive inventory is helping us bring new users from Tier 3 and Tier 4 towns on our platform.

We have further improved the experience for our Luxe collection of super premium properties. We have started offering Luxe packages which deliver more value to the customer and bring additional revenues for the hotels. These value added services have been well received by our customers. One of the trends that will continue to remain strong is preference for alternative accommodations and short breaks. People are opting for staycations in homestays such as villas and holiday homes. We continue to invest and grow this business. Total active properties on our platform have now increased to more than about 34,000.

We have witnessed a 70% increase in homestay listings from Tier 2 cities and unexplored destinations over prepandemic levels. Homestays is a key segment for us from strategic point of view and is one of the fastest growing segments. Our holiday package business was slow at the start of the quarter like other businesses, but we were able to grow month-on-month and currently this business is already above pre-pandemic levels.

Majority of travel during the first half of Q4 was dominated by domestic destinations where international travel started to pick up towards the end of quarter. During the quarter Kashmir, Himachal, Andaman, Goa and Northeast were the destinations which attributed to about 85% of the domestic demand. This trend seems to continue for the Q1 as well with an addition of destinations like Ladakh. For international destinations the demand was majorly dominated by Maldives and Dubai. However, with easing of restrictions Europe also started picking up towards end. Going ahead into Q1, the demand trends are similar with the addition of new destinations such as Mauritius and Bali.

Coming to our bus ticketing business, Q4 saw a steady recovery post the third wave. It is expected that the demand picking up further in April, June quarter on account of school vacations, reopening of offices, especially in IT sector inventory will bounce back further, particularly in the Southern region. Towards the end of Q4, we also saw green shoots on new fleet addition from operators in a few states. This is a silver lining as operators have shown interest in new fleet addition for the first time since March 2020 and augurs well for both inventory expansion as well as improvement in net promoter score.

On the product side we enabled bus operators to cross sell add-ons in booking and post-booking touch points. In the first phase, operators can enable food related add-ons, same will be extended to other categories such as luggage, travel essentials etc., in the current quarter. Primo, our program for top rated sellers which aggregates the best rated services is shaping up well. We have close to 2,450 physically branded buses on the road across the length and breadth of the country and this is helping us create a robust top of mind awareness. There have been several new initiatives to differentiate the Primo experience, including three redBus lounges which are live across the top boarding points pan India.

Other ground transport use cases, which include rail and intercity cabs continue to scale and bring new users on our platform. We witnessed strong growth in both seats and gross bookings value despite Omicron impact. Ground transport contributed to 27% of the overall new users acquired on Makemytrip and Goibibo platform in Q4. Significant part of this new traffic comes from the non-English speaking Tier 3 and Tier 4 cities thereby expanding the reach of our offering to new geographies and user segments. We are already witnessing strong growth in our rail bookings business. We witnessed 66% growth in seats in Q4 fiscal year ’22 over Q4 fiscal year ’21 surpassing pre COVID levels. During the quarter we launched the standalone redRail app with an app size of 7.2 MB. This is the lightest app in the industry to target the Bharat user base. The app has already seen 160,000 downloads in first 30 days of launch with 75,000 active user base.

Ride by redBus, our curated and certified intercity cab offering with quality vehicles and train drivers is also piloting into no big cities, Bangalore and Delhi, 21% of our overall bookings originating out of Delhi and Bangalore are now certified Ride certified. Driver application which is a key component in the post-booking experience was enhanced to allow for detailed tracking and auditing Ride promises like driver wearing uniform and mask and clean cabs. All three of our brands, MakeMyTrip, Goibibo and redBus continue to enjoy highest top of mind recall and consideration. We have industry-leading repeat rates, for Q4 over 70% of transactions were done by existing customers, clearly showcasing the strength of our product experience and brands.

Coming to our expansion in GCC, Q4 has been a strong quarter for GCC with our continued focus on efficient customer acquisition by enhancing customer proposition and competitive advantage. While COVID did affect the growth, the region is bouncing back and is expected to recover to pre-pandemic levels in 2022. For the quarter GCC business grew by 52% quarter-on-quarter.

Our travel focused fintech platform TripMoney is shaping up well as well. We continue to invest and expand our offerings. We have introduced Book Now Pay Later payment option while booking travel, flight or hotels on MakeMyTrip as well as the Goibibo app. TripMoney has established a marketplace, attracting 15 leading fintech players, NBFCs and banks to offer easy travel credit to the travelers. Initial response to BNPL on the MakeMyTrip platforms has been very encouraging with 60% growth in BNPL transactions quarter-on-quarter over the past one year. TripMoney has also strengthened its position in the forex space by acquiring a majority stake in leading online currency exchange platform in India called BookMyForex. With this TripMoney has a unique position in the industry by being the only player in travel fintech space to offer a suite of services like INR denominated global card, multi-currency forex card, foreign currency delivery pan India and instant foreign remittances.

Coming to our initiatives for non-direct B2C demand segments, myPartner is our product to power offline travel agents. We have now on-boarded more than 25,000 travel agents, net additions of new travel agents in Q4 was about 3,089. By end of March 2022, 52% of overall agents have transacted at least once on the platform and the number continues to grow steadily. We are bringing more value to the agents through product enhancements. During the quarter we launched new on-boarding page to empower faster and smoother on-boarding for agents, also launched a detailed [Indecipherable] section on the platform to facilitate faster reconciliation for the travel agents.

Our myAffiliate program is to power other online platforms for travel services. This initiative is aligned to our outlook for the future. During the quarter our exclusive partnership with Amazon Pay went live and PhonePe went live in April, 2022. These partnerships are aimed at providing greater value for customers with access to MakeMyTrip’s best-in-class flight and hotel offerings. There is an accelerated digital shift happening because of the pandemic, and through these partnerships, we will be able to extend our customer reach to Amazon Pay’s and PhonePe’s large consumer base, especially in smaller cities and towns. Our aim is to make travel bookings extremely convenient for new adoptors, thereby increasing the online penetration of travel bookings. Our technology investment in catering to corporate travel demand have started paying off as people have started returning to offices in greater numbers. Gross bookings for corporate business during fiscal year ’22 grew by 266% year on year, driving non-B2C mix to high-single digit. We acquired 262 key accounts and 502 SMEs on myBiz during Q4. Some of the key accounts that went live were Lenskart, IndiaMART, SC Johnson, ABP News, etc.,

On Quest2travel, our active customers count has surpassed preCOVID level, active customers on Q2T reached 155 in March ’22 versus 114 in January ’20. Some of the notable customers acquired during the quarter were Nykaa, Tata Medical, Bira [Phonetic] Tata Motors Finance, Primeworks etc., We continue to work on both our products to enable seamless integration with the corporate systems and drive employee adoption. It is noteworthy that despite being a late entrant to the corporate travel segment we have emerged as a significant player in the corporate segment in terms of gross booking value as well as revenue.

To conclude, consumer sentiment remains strong especially for leisure travel while the demand momentum could have been even more stronger but for high fares and inflationary pressures. We are hopeful of full recovery to pre-pandemic levels in domestic travel demand by first half and international travel demand by second half of the upcoming fiscal year 2023.

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

Mohit Kabra — Group Chief Financial Officer

Thanks, Rajesh. Hello, everyone. I hope you’re all staying safe and healthy.

Online travel booking in India is still an under-penetrated market. Our aim is to continue to grow our offerings and bring more and more users on our platform via the newly built travel use cases while ensuring that high repeat rates drive profitability in our leading business segments. As reported earlier during the last couple of years through the pandemic, we have adopted a two-prong strategy on cost rationalization to drive better operating leverage.

Firstly, we have made concentrated efforts towards long-term fixed cost reduction. And secondly, brought in more efficiencies in our variable expenses and in particular the customer acquisition costs. As a result of this, despite a 12.4% sequential decline in gross bookings versus the previous quarter, we maintain strong profitability and post an adjusted operating profit or adjusted EBIT of about $12 million. Adding back non-cash amortization and depreciation, the adjusted cash operating profit or the adjusted EBITDA stood at about $15.5 million. For the full fiscal year FY ’22, adjusted operating profit is at about $23.2 million as compared to an adjusted operating loss of $18 million in the previous fiscal year and a loss of about $70 million in full-year ’20, which was the pre-pandemic year.

Moving on to our business segments. During the quarter, air ticketing adjusted margin stood at about $44.8 million representing a growth of 20.5% year-on-year in constant currency terms. This is the first quarter where we have seen growth over pre-pandemic comparable quarter of Q4 FY ’20 in the domestic air ticketing market. Considering that regular international flights have been restarted since 27th of March 2022, the recovery in the international ticketing segment which stood in the 40s during the reported quarter is likely to improve in the coming quarters. With the strong recovery in air ticket business, margins on expected lines have come back to pre-pandemic levels and stood at about 7.1% during the reported quarter.

Our OTA brands both MakeMyTrip and Goibibo continue to be the top two travel brands in the country with a combined market share of over 30% in the domestic air ticketing business. Adjusted margin for our hotels and packages business stood at $42.3 million witnessing a growth of 22.2% in constant currency terms. Just as in the case of the air ticketing business, the recovery to pre-pandemic levels is much stronger in the domestic hotel bookings compared to international hotel bookings, which is likely to gather pace in the coming quarters with the reopening of regular commercial flights. The margins in this segment stood at 17.7% for the quarter and 17.9% for the full fiscal year. These are likely to remain stable in the 17% to 18% range.

In our bus ticketing business, the adjusted margin stood at $12.4 million, registering a growth of 15.7% over the same quarter a year ago in constant currency terms. The redBus brand continues to be a leader in the bus ticketing segment in the country, and in future, we are leveraging this to make a foray into adjacent ground transport services like intercity cabs, rail bookings, etc., as mentioned by Rajesh. Adjusted margin for other businesses during the reported quarter stood at $5.7 million witnessing an increase of 13.6% over the same quarter last year in constant currency terms.

Moving on to our operating costs. We continue to be prudent with our variable expense especially the customer acquisition costs. Marketing and sales promotional expenses stood at about 4.5% of gross bookings compared to 5.6% in the previous quarter. Overall, with domestic business recovery under the belt, we are hopeful of international recovery gathering pace in the next fiscal year. To leverage the same, we have launched the Great India Travel Sale to nudge travelers to book early in the ongoing seasonally strong summer quarter.

While we continue to pursue organic growth, we keep looking for a strategic acquisition opportunities to enhance our product portfolio or add technical capabilities. We are well-capitalized to be able to pursue such opportunities. Last month we had announced the acquisition of a majority stake in India’s leading currency exchange platform BookMyForex, which will help us in offering forex services to our MakeMyTrip as well as Goibibo customers. With international travel reopening, forex services are showing early signs of traction and we expect growth momentum to increase as outbound travel recovers faster here onwards. We will continue to look for such investment opportunities in the new growth areas that Rajesh has already talked about.

With that I’d like to turn the call to Vipul for any Q&A.

Questions and Answers:

Vipul Garg — Vice President, Investor Relations

Thank you, Mohit. [Operator Instructions]

The first question is from the line of Gaurav Rateria of Morgan Stanley. Gaurav, you can unmute your line and ask your question.

Gaurav Rateria — Morgan Stanley — Analyst

Hi, congratulations on great performance. Am I audible?

Vipul Garg — Vice President, Investor Relations

Yes. Gaurav.

Gaurav Rateria — Morgan Stanley — Analyst

Yeah, the first question is, typically in a down quarter where we see an impact because of various COVID waves, we have seen competition getting more impacted than MakeMyTrip. So, has that been the case in the current quarter, which is what led to the market share increase? And has that kind of played out in the hotel segment as well?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Yeah, hi Gaurav, maybe I can take that. Yeah, I guess historically post-facto when we look at all the numbers or when you just compare it from the market, it probably is the case and I think it’s testimony of the fact of the long-standing presence for the brand across the segments that we have and very high repeat rate that we also have on our platform. As I was mentioning in the script, our repeat rate is about 70% plus right? So obviously that is what we have seen as a trend historically. As far as this reported quarter is concerned, I guess we will wait and see and it might as well be the case as well.

Gaurav Rateria — Morgan Stanley — Analyst

The second question is with respect to some of the partnerships that you talked about. It will be great to get some color on what kind of traction that we are seeing there and how different it is from historical partnership that we have had and where not material progress happened. Do you expect this to really become big at some point in time?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Yeah, again, a good question Gaurav. No, I would say specifically if you are referring to my affiliate partner sort of program — partnership that we had with Amazon Pay that we’ve gone live with and we very recently gone live with the PhonePe as well, as I highlighted the objective of these partnerships are essentially trying to ride on the sort of broader and wider customer reach to the deeper India that these platforms have by virtue of them being in those categories right? So which clearly reaches to Tier 3 Tier 4 cities as well. So, the early trends that we’ve seen from the numbers happening on these platforms, clearly we are seeing — one, that we are seeing new user contribution coming in more and more from Tier 3 and Tier 4 cities, which is very encouraging, which is exactly what was our objective as well. And we have seen decent traction on the absolute number of sort of bookings also coming in from these platforms, especially Amazon Pay because PhonePe we’ve just sort of gone live recently. And in the subsequent quarters, we will — we should be able to share more color on that.

But as far as Amazon Pay is concerned, I guess one difference from the past, maybe some of the similar sort of partnerships that we had was that this time around the integration is deeper and with our brand. So from a consumer point of view, when they go on Amazon Pay they basically are getting the benefit of MakeMyTrip brand, pretty much the same UI, same product experience because that’s what is controlled from a pricing standpoint. It’s effectively from a consumer point of view, the transaction is happening on MakeMyTrip. So, the reliability or the trust in the brand that has been there on the MakeMyTrip you get naturally along with sort of riding on the broader base of traffic on these platforms.

Gaurav Rateria — Morgan Stanley — Analyst

That’s really glad to know that. Last question is to Mohit on how should one think about the advertising and sales promotion expenses especially in a normalized environment? I would assume that it should increase from the current levels where you need not require to spend so much and competitive intensity to little bit increase compared to down quarter like the March 2022 quarter?

Mohit Kabra — Group Chief Financial Officer

Yeah, I mean you’ve seen that variability in the multiple quarters that we’ve reported. Even during the current fiscal year, the recovery was better in Q3 and therefore the spend was slightly higher. And the recovery in Q4 was marred by the Omicron variant, and therefore, we’ve seen much lower not only absolute spends but also lower marketing and promotional spends as a percentage of gross bookings. I think we will continue to keep this broadly in line with the growth momentum or the recovery momentum. Once we’re well past the overall pre-pandemic levels, both on domestic and international, I think we’ll have a much better comparative versus the pre-pandemic expense levels, which used to be about 9% to 10%. We — in the current trending, we don’t see this really going anywhere beyond say the 6.5% to 7% mark, but again too early to call that out. Like I said, we’ll will take it step at a time at least now that we’re close to complete recovery on the domestic side, the fact that we are — which is a larger part of the business, close to about 75% of the business even pre-pandemic used to be domestic. Considering that domestic has completely come back and we are able to see a significant reduction in the customer acquisition costs, I have reason to believe that we’ll be able to do a similar efficiency improvement even on the international side of the business. So, overall the trending should not change very differently, although quarter to quarter the numbers would change based on actual recovery.

Gaurav Rateria — Morgan Stanley — Analyst

Great, thanks a lot and all the best.

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Thank you, Gaurav.

Mohit Kabra — Group Chief Financial Officer

Thanks so much Gaurav.

Vipul Garg — Vice President, Investor Relations

Thank you Gaurav. The next question is from the line of Prashant Katari [Phonetic]. Prashant, you can unmute yourself and ask your question.

Prashant Katari — — Analyst

Yeah, hi, thanks for giving me the opportunity. So, I had questions on hotels as well as bus in terms of the growth that we’ve seen on the unit metrics side, so hotels is just about 2% to 3% growth and bus is actually a drop. Can you just explain what is happening there because I believe the market should probably be growing faster than that, but maybe I’m wrong?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Yeah. Maybe I can take that, Prashant. No, observation is not off, Prashant. But the reason is, and even if you look at even historically, you would always see that the overall recovery coming out of the waves. This quarter, mind you, as we highlighted was actually January, February, a large part of the quarter was impacted by Omicron. And when we see the recovery, the first segment to recover is always flights, and then it starts — then hotels and then bus sort of fall in place. And then specifically for bus, it is also a function of — as we were also highlighting in the script, it was also a function of some of the use cases, which is effectively linked to the office-going people, which is effectively linked to the opening of the offices, which has happened only very recently. And there are some specific reasons why it takes a little bit more time. There’s a lag effect for bus recovery and which is exactly what we are seeing in current quarter. So, it’s just a matter of this recovery happening with a little bit of a lag effect, both for hotels and bus and nothing else. And we are currently seeing that robust recovery coming on both hotels and bus in the current quarter.

Prashant Katari — — Analyst

Okay. Thanks for that. And the other question was just on the profitability side. Any new thoughts in terms of how much margins do we want to achieve by when? Because you would obviously notice what is happening globally in terms of — investor expectations are rising in terms of higher profitability sooner rather than kind of waiting forever. I mean, any thoughts that you have in terms of maybe an improved guidance on that front would be great?

Mohit Kabra — Group Chief Financial Officer

Sure Prashant. Maybe I can take that. And just to add to what color Rajesh had shared on the previous question, just also wanted to call out that actually on the hotel side, like we have been saying, the recovery has been a bit slow in the budget segment of hotels. And as you would recollect, close to about 50% of our volumes used to come in from the budget segment, where we are seeing gradual recovery. Whereas if you actually look at the mid to the premium segments, I think we’re already sitting at close to pre-pandemic or higher than pre-pandemic volumes. So, that’s one of the reasons why the overall recovery, particularly on the segment side, — because the volume numbers on the budget are much more, the recovery looks a little muted in hotels because of the budget segment per se. In fact, the recovery in gross bookings is much better than it is on the segment side for the same reason. I thought I’ll just call it out.

On the profitability side, like you would have seen, I think, through the year, at least our guidance for the last fiscal year was that considering the waves that we are seeing on the pandemic side, and last year saw two pandemic waves, one in the first quarter and the second overlapping between the third and fourth, my callout was that we would like to be in the plus or minus $10 million range. Highly impacted quarters could see small negative adjusted operating losses whereas the good quarters on recovery, we could possibly be at the top end of the range.

And if you see this quarter also, the last two quarters, as we’ve beaten the top end of the range of $10 million. This quarter was also higher and the previous quarter was also higher. So, I think on the fact that we would like to accelerate the profitability, I think we’ve kind of seen that come through. I think now it’s going to be more a question of trying to drive back the 100% recovery including on the international side and also drive growth momentum beyond the pre-pandemic levels. And while doing so, I think we’ll be more focused on ensuring that the operations remain profitable.

We don’t really are in a hurry in terms of driving profitability as a percentage of gross bookings. I think if you are able to get to even a mid-single digit of profitability on the net profitability side that would be our aim. Right now, it’s much better off. If you see on gross bookings, we are where we have a blended margin of about 11-odd percent. Currently, our adjusted operating profits are more than 1 percentage point. I think even if we are able to maintain this at about 0.5 percentage point level or thereabouts that should trend well and allow us to keep reinvesting behind growth and keep reinvesting behind the adjacent areas of future growth that Rajesh has called out.

Prashant Katari — — Analyst

Let me just — I mean, our concern is that you have been in the business for 20 years and yet to kind of make a decent profit on the net bottom line. I mean, there would come a point where maybe you’ll also get disrupted and we would rather that you make some nice cash profits before that eventuality happens. So, I mean, there is that maybe a nice time window out here today when the competition is lower, when the travel is recovering and when the hotels and airlines want these passengers and customers to come in, which is a new — could be looking to make profits. Maybe this window will not last forever. That’s the only concern we have.

Mohit Kabra — Group Chief Financial Officer

No, of course, partly, to look at it in a — while the business has been in operation for 20 years for all practical purposes, the domestic business started only about 15, 16 years back. And within that, if you see the business which is predominant at that point in time, which is air ticketing, that is probably as profitable as the biggies in the OTA market globally, right? Whereas if you look at some of the other segments beyond air ticketing, like hotels, etc., we have been in that segment only for about five to seven years for all practical purposes. And therefore, the larger mix of the business now is coming in from non air ticketing segments. And these non air ticking segments have been, like I said, been only in play for the last five, seven years. And therefore, they’ll need time to get into a mature phase profitability. But they’ll definitely get there over the time period of, say, the 10 to 20 years that you’re looking at. So, I think we are very sure of that on the other segments. Air ticketing clearly is comparable and is on that path already. Some of the other segments will get onto that path and overall take the profitability higher for the blended business.

Prashant Katari — — Analyst

All right. Thank you.

Vipul Garg — Vice President, Investor Relations

Thank you, Prashant. The next question is from the line of Vijit Jain of Citi. Vijit, you can please unmute yourself and ask your question.

Vijit Jain — Citi — Analyst

Thanks, Vipul. So, my first question is, any impact you’re seeing in your customer acquisition costs from the new Apple privacy rules? And do you have any sense of any impact that could happen from whatever Google might do? And related to that, do you think that impacts some of your global competitors like Booking, Airbnb, should they decide to come back into India at some point now that international is recovering?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Yeah. Hi, Vijit, maybe I can take that. On the first question, the answer is no. We haven’t really seen any impact yet and we’ll watch the space as it goes. And it’s also the fact, Vijit, that as we’ve been sharing earlier as well that we do have a very high share of direct traffic, direct/organic traffic on our platform, given the fact that the brands have been pretty strong over the years. And this is across all three brands that we have. So, the short answer is so far we haven’t really seen any impact and we’ll see how it goes. As far as your second part of the question is concerned, Booking.com and Expedia or any of the international OTAs and see they have been around. I mean, they have been around for many years. And maybe during the pandemic, the focus was — given the international borders have not really opened up, focus was more on their core markets. But for the last couple of quarters, they are active and they will continue to be active in the domestic market as well. And from our point of view, our strategy and execution roadmap is pretty focused on continuously sort of keep improving the customer experience, making sure that the supply depth is there, making sure that our penetration goes to Tier 3, Tier 4 cities.

There are a bunch of investments that we made during the pandemic on sort of going out and reaching out to the different demand segments as we highlighted, even the non-direct B2C segments, etc. All of these investments that we’ve made in the last couple of years are only going to help. Additionally, it’s also, all the adjacent cases that we have sort of invested behind through TripMoney and all. Now, all of them are just going to help us get more and more new users and more and more establish our brands further on consumers’ mind in terms of just the comprehensive shop for travel use cases of all kinds and even enabling travel use cases including consumer lending and so on. So, I guess we will continue to keep staying focused on our — executing our strategies. And healthy competition is always welcome and we’ll keep sort of dealing with it.

Vijit Jain — Citi — Analyst

Thanks, Rajesh. Rajesh, my second question is on the MyAffiliate program that you talked about. So, first off, is that across all segments, already that is bus, train, air as well as hotels? And a related question with that is you mentioned PhonePe. I’m just curious given that PhonePe is a part of Flipkart, which has Cleartrip? How does that work in that sense?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Interesting. The first part of your question is to start with flights and hotels. And we can always add more services as we go along, but to start with the flights and hotels. We do have redBus independently, by the way, powering Amazon Pay even before this MakeMyTrip affiliate alliance that we had. And so, the bus was already there. Bus was already there on PhonePe as well. We don’t have rail yet. But potentially we can add and maybe we can add the other ground transport, etc., as well as we go along.

And the second part of question, Vijit, is that, operationally, otherwise, PhonePe and Flipkart sort of run — are being run completely independent entities. There was absolutely no sort of concern. They are different business models, differently and independently run outfits. And there were no concerns because we were, in any case, using PhonePe even historically, just to get the new user acquisition from them like many other players in the market would be using them. And this was an opportunity to see if we can sort of exclusively power them from flights standpoint and subsequently hotels as well. And therefore, we went ahead, but we don’t have any sort of such concerns them being — having the same ultimate parent and so on.

Vijit Jain — Citi — Analyst

Got it. Thanks, Rajesh. So, if I can just squeeze in one final question. You mentioned some of these investments during the pandemic, right? And I was just — sorry if this is already clarified in the filing, but I see your net cash generated from or used in investing activities is around $119 million for 2021, went to $78 million in 2022. If you could give a broad stroke overview of what this is? Mohit.

Mohit Kabra — Group Chief Financial Officer

Vijit, maybe we could take that as a follow-up?

Vijit Jain — Citi — Analyst

Yeah, sure. Thank you. Those were my questions.

Vipul Garg — Vice President, Investor Relations

Thank you, Vijit. We have now questions from Sachin Dixit. Sachin, you may please ask your question now.

Sachin Dixit — — Analyst

Sure. Hi, Rajesh and Mohit thanks for the time. I have a quick question on the customer side, right? So, customer behavior and customer loyalty. So, one, like, if you can provide some color on your MMTBLACK programs, how are they going on? Like, are customers willingly paying or it’s mostly getting passed on as like bundled cost with the credit cards and etc.? Secondly, can you — do you have any color on the wallet share that a customer is spending on them? I do understand the repeated and all are pretty good, but any color on like — on the overall wallet share that a typical loyal MakeMyTrip customer is spending on MakeMyTrip?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Sachin, your voice was breaking. But I heard part of your question and I think it was to do with our loyalty program, Black program, and let me try and address that. So, our loyalty program, MMTBLACK on MakeMyTrip and goTribe on Goibibo is actually doing very well. I think, overall, over the years from all the learnings in the past, we’ve been able to effectively crack the code on the loyalty program for an intermediary like us that has been now working quite effectively. We continue to keep growing the number of users. And I can give you just one sort of data point that will support what I just said. Our repeat rate in general overall platform versus the repeat rate coming from the BLACK loyal members is about 20% higher than the normal non-BLACK members. So, which is sort of a good measure to test whether the program is working effectively or not. So, clearly, from a consumer behavior standpoint, when they see the value, the real value, tangible value coming through as part of the loyalty program, there is clearly traction to that program..

Sachin Dixit — — Analyst

Sure. The next question that I had was on the customer wallet share color. Like, so any context on how much of the wallet share is the customer spending on MakeMyTrip?

Rajesh Magow — Co-Founder & Group Chief Executive Officer

Yeah. No, I think it’s a very good question. And part of the reason why we are a comprehensive shop is that the goal behind the scene is to get more and more wallet share for practically every travel use case that the customer might have. So, just to give you an example, you know, from a cross-sell, upsell standpoint, we see a lot of the flight bookers end up buying hotels with us and vice versa. And a lot of the — of late, we’ve been acquiring a lot of the new users on our Rail platform. And from Rail platform, we have started to now very effectively sort of also offer Bus as a cross-sell option as well for a lot of the, let’s say, for example waitlisted customers on Rail, which is like a very big use case in India and then you end up doing that. So, basically, what we are trying to do is to, from a customer point of view, take a view with the customer at the center and think about possible every travel use case that he would need from his point of view or she would need from her point of view in that session or in the subsequent sessions or during the course of the time, right? And will we be able to sort of address every possible need or not. And the direct output of that would be that we’ll get more and more wallet share from one particular customer over time. That’s really the idea. We haven’t — don’t really have any the actual wallet share reported out. But over the next few quarters when we have more data on this, given that the cross-sell and upsell is effectively picking up across the platform, we should be able to give more color on that.

Sachin Dixit — — Analyst

Great to hear. Thank you.

Vipul Garg — Vice President, Investor Relations

Thank you, Sachin. If anyone has a question, please raise your hand. Otherwise, we have no other person in the queue. We’ll just wait for a few more seconds if anyone has any questions.

All right. Thank you very much. We have no more questions, Rajesh, in the queue. So, we can end the call with your closing remarks.

Rajesh Magow — Co-Founder & Group Chief Executive Officer

All right. Thank you, everyone. Thank you for your time for the call today. Stay safe and healthy. Thank you so much.

Vipul Garg — Vice President, Investor Relations

Thank you. You may disconnect.