MakeMyTrip profit plunges 65% as West Asia conflict hits international travel; domestic travel drives Q1 growth

MakeMyTrip, preparing for its India listing, posted a resilient performance in the first quarter of FY27, with strong domestic travel demand helping offset a slowdown in international travel caused by the ongoing West Asia conflict. While revenue and bookings continued to grow, profit dropped sharply as higher finance costs and currency movements weighed on the online travel company's reported earnings.

For the quarter ended June 30, 2026, revenue rose 6.2% year on year to $285.6 million. On a constant currency basis, however, revenue grew 16.1%, indicating the significant impact of the Indian rupee's more than 10% depreciation against the US dollar during the quarter. Gross bookings increased 9.4% to $2.85 billion and grew 19.9% in constant currency.

The company's reported profit for the quarter fell 64.7% to $9.1 million from $25.8 million a year ago. Results from operating activities, however, improved 8.3% to $43.7 million, while adjusted operating profit rose to $51.4 million from $47.3 million. Adjusted EBITDA increased 7.5% to $55.5 million.

The sharp decline in profit was largely due to a steep rise in finance costs. Net finance costs jumped to $28.3 million from $4 million a year earlier, primarily because of higher interest expenses related to the company's convertible senior notes due 2030.

The company acknowledged that the quarter was shaped by both macroeconomic and geopolitical challenges. It said international outbound travel from India remained subdued because of the ongoing West Asia conflict, affecting growth in its international business. At the same time, strong seasonal demand and healthier domestic travel activity helped cushion the impact and supported overall growth.

Rajesh Magow, group chief executive officer, MakeMyTrip, said, "Despite macroeconomic disruptions, particularly in international travel, travelers made alternative choices for their leisure travel this quarter. As a result, we delivered a strong performance, underscoring the strength of our diversified range of travel products and services available on our platform."

He added, "While there are short term headwinds due to the West Asia conflict impacting oil prices, we remain positive about the long-term outlook of the travel and tourism market in India on the back of infrastructure development and rising propensity to travel in India."

Domestic travel offsets outbound slowdown

Hotels and packages remained the largest growth driver for the business. Revenue from the segment increased 6.7% to $151.2 million, while adjusted margin rose 10.3% to $134.5 million. Gross bookings grew 8.5%, supported by a 19.9% increase in hotel room nights booked during the quarter. The segment's adjusted margin percentage also improved to 18% from 17.7% a year earlier.

Bus ticketing continued to outperform other segments. Revenue climbed 15.9% to $44.9 million, while adjusted margin increased 21.7% to $51.8 million. Gross bookings expanded 20.8%, driven by a 23.9% rise in bus ticket volumes. Revenue from the company's other businesses rose 19.6% to $33.9 million, led by ancillary services.

Air ticketing, however, reflected the pressure on international travel. Revenue from the segment declined 7.5% to $55.6 million, although on a constant currency basis it still registered 1.1% growth. Gross bookings increased 7.6%, while adjusted margin edged up 1.5% despite the reported revenue decline.

"On the demand side, international outbound travel from India remained subdued due to the ongoing West Asia conflict, affecting growth in our international travel business and our results for the quarter ended June 30, 2026. Nevertheless, strong seasonal demand and improved domestic travel activity during the current quarter partially mitigated this impact, enabling us to maintain resilient overall performance," said the earnings release.

The quarter also saw operating costs move higher. Service costs increased 10.4% to $82.7 million because of robust demand for packages and car bookings. Marketing and sales promotion expenses rose 11.1% to $48.8 million, while customer inducement costs increased to $106.8 million from $89.1 million a year earlier as the company stepped up spending on incentives, events and brand building.

Despite the near-term pressures from geopolitics, higher oil prices and currency fluctuations, MakeMyTrip ended the quarter with cash and cash equivalents of $370.7 million and term deposits of $423.6 million, providing it with a healthy liquidity position as it navigates an uncertain international travel environment.