MakeMyTrip Limited — Form 20-F Summary
Reporting period: Fiscal year ended March 31, 2021. Although the request refers to 2020 Q4, this filing is an annual report for FY2021; it also provides unaudited results for the quarter ended March 31, 2021. Financial statements are prepared under IFRS and amounts below are in U.S. dollars.
Business context and reporting period
MakeMyTrip operates online travel platforms MakeMyTrip, Goibibo and redBus, principally serving India through air ticketing, hotels and packages, bus ticketing and ancillary services. India accounted for 98.9% of FY2021 revenue. The filing describes severe pandemic-related disruption to travel demand, followed by a domestic recovery that weakened again amid India’s second COVID-19 wave.
Financial and operating metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $163.4 million | $511.5 million |
| Operating loss | $67.7 million | $429.4 million |
| Net loss | $56.0 million | $447.5 million |
| Loss per share, diluted | $0.52 | $4.26 |
| Operating cash flow | $64.5 million generated | $112.7 million used |
| Cash and cash equivalents | $295.1 million | $129.9 million |
| Term deposits | $154.9 million | $38.0 million |
| Total assets | $1,309.0 million | $1,083.2 million |
| Total liabilities | $417.8 million | $220.9 million |
Cash and term deposits totaled $449.9 million at year-end. The company reported a $261.6 million net cash position excluding lease liabilities. Total loans and borrowings were $204.0 million, including the convertible notes and lease liabilities. No amounts were outstanding under working-capital and overdraft facilities; a $70 million affiliate credit facility was undrawn.
FY2021 revenue fell across all major lines: air ticketing $57.0 million (down 67.3%), hotels and packages $68.0 million (down 71.2%), bus ticketing $24.9 million (down 61.7%), and other revenue $13.6 million (down 62.7%). Gross bookings declined to $1.64 billion from $6.09 billion. Transactions also contracted sharply: flight segments to 15.0 million, hotel room nights to 8.5 million, and travelled bus tickets to 26.7 million.
Management’s non-IFRS segment measure, Adjusted Margin, totaled $184.1 million versus $723.4 million. Adjusted Margin percentages were 8.2% for air, 17.9% for hotels and packages, and 8.2% for bus. These measures add back customer inducement costs and are not substitutes for IFRS results or necessarily comparable with similarly named measures at other companies.
For the quarter ended March 31, 2021, revenue was $79.2 million, operating income was $0.3 million, and net income was $3.2 million. In the comparable quarter ended March 31, 2020, revenue was $104.9 million and net loss was $338.6 million, including the $272.2 million goodwill impairment charge.
Material changes versus comparable periods
- FY2021 revenue declined 68.0% year over year as restrictions and reduced travel demand affected all major businesses. Gross bookings fell approximately 73%.
- Operating loss narrowed to $67.7 million from $429.4 million. The prior-year loss included a $272.2 million goodwill impairment and a $30.8 million litigation provision; neither item recurred in FY2021.
- FY2021 Adjusted Operating Loss was $18.0 million, compared with $69.9 million in FY2020; Adjusted Net Loss was $9.2 million, compared with $86.5 million.
- Cost actions reduced marketing and sales promotion expense to $22.7 million from $166.6 million, personnel expense to $105.7 million from $129.8 million, and other operating expense to $51.1 million from $185.4 million.
- Operating cash flow improved by $177.2 million, to $64.5 million generated, while FY2021 financing cash flow included $224.0 million of net proceeds from the convertible notes.
Outlook, commentary, risks and unusual items
There is no quantified financial guidance in the filing. Management said the second COVID-19 wave was expected to materially affect FY2022 first-quarter revenue and described itself as cautiously optimistic about domestic travel recovery beginning in FY2022’s second quarter. The timing and extent of recovery remain uncertain and depend on infection trends, restrictions, vaccination and consumer demand.
In response to the downturn, the company reduced salaries, staffing, marketing, outsourced call-center capacity and other costs, and closed company-owned travel stores and airport counters in India. It also reported sequential domestic-demand improvement after vaccination began, before renewed restrictions late in FY2021.
Principal risks include prolonged travel disruption, competition and discounting, supplier or airline commission reductions, reliance on third-party systems and suppliers, foreign-exchange exposure, Indian regulatory changes and Trip.com’s significant influence. The company does not hedge its foreign-exchange exposure; a 10% U.S. dollar appreciation against the rupee was estimated to increase FY2021 loss by $19.1 million.
The company issued $230 million of 0.00% convertible senior notes due 2028 in February 2021. Holders may require repurchase at par on February 15, 2024 and February 15, 2026, or following certain fundamental changes. A separate $39.2 million arbitration award in the Hotel Travel Group dispute remains under challenge; the company recorded a $30.8 million provision in FY2020. The filing also describes significant disputed Indian tax and indirect-tax matters and an ongoing competition investigation. Management states that it believes the claims are not likely to be upheld, but outcomes remain uncertain.
A material weakness identified in FY2020 related to goodwill impairment forecasting controls was addressed through revised procedures. Management and the external auditor concluded internal control over financial reporting was effective as of March 31, 2021.
Important facts for investors to verify
- Whether post-year-end travel demand and revenue recovered as management anticipated, particularly after the second wave and subsequent restrictions.
- Cash availability and obligations attached to the 2028 notes, including the 2024 and 2026 holder repurchase dates, conversion terms and potential dilution.
- The assumptions supporting goodwill valuation and the integration and reallocation of goodwill among air, hotels and packages cash-generating units.
- Developments, potential exposure and adequacy of provisions for the Hotel Travel Group arbitration and Indian tax, service-tax and GST disputes.
- Whether cost reductions are sustainable without impairing customer service, supplier relationships or future growth, and how Adjusted Margin reconciles with IFRS performance.
- Trip.com’s voting, board-nomination and pre-emptive rights, and any resulting governance or dilution implications.