Welcome to the MakeMyTrip Fiscal 2013 First Quarter Earnings 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 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, Jonathan Huang. Please go ahead.

Hello, everyone, and welcome to our fiscal 2013 Q1 earnings call. Today, we will be using certain non-IFRS metrics, which are reconciled with IFRS metrics in our press release tables, as we believe that our profitability and performance will be better demonstrated using these metrics. Joining us today is Deep Kalra, Founder and CEO of MakeMyTrip, who will summarize our achievements in the past quarter; and Rajesh Magow, our Co-Founder and Chief Financial and Operating officer, who'll elaborate on our quarterly results. Also on the call 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 turn the call over to Deep.

Greetings, everyone, and thanks for joining our call today. During the past quarter, we continued to see extraneous headwinds that made the operating environment increasingly challenging. These headwinds included a slower growing base with air passengers in India, a higher air ticket pricing environment caused by constrained airline capacity, a general slowdown in the growth [ph] in the Indian economy and the rupee exchange rate that continued to weaken during the quarter. I'm delighted to share with you however today that despite these headwinds, we managed to deliver year-on-year net revenue growth that was in line with our expectations and guidance. For the first quarter, our total net revenue grew by nearly 36% in constant currency terms. We believe our success is a result of continuously improving customer experience, adapting to the fast-changing industry and macro conditions and remaining focused on growing the Hotel and Holidays business. Let me now share with you the highlights of the quarter. I'm happy to say that we continue to make good progress in expanding our standalone hotels business by offering more selection and addressing issues surrounding customer booking habits. Our comprehensive strategies to grow the Hotel business resulted in 60% year-on-year growth in the online Hotel and online Packages business. In the quarter, we ran a TV campaign to drive increased awareness of our money back guarantee program for hotel booking, which resulted in an uplift in our website reserve [ph] and an improvement in our hotel conversion rates. At the same time, we continued to roll out the option for customers to stay at hotels at select properties to further address concerns of advanced payment with online booking. Today, our customers have access to over 8,900 fully searchable and bookable domestic hotels and guest house properties in India and over 183,000 international…

Thanks, Deep, and hello, everyone. I am pleased to share Q1 financial results achievement in line with our guidance. Our total net revenue growth on a constant currency basis was up nearly 36% year-on-year. We also made $2.5 million in adjusted operating profit, representing adjusted operating margin of 10.6%. This was an improvement from 7.8% margin in the same period last year. Our Air net revenue grew by nearly 31% year-on-year on a constant currency basis despite a very tough transaction growth environment as average your face [ph] increased substantially year-on-year due to supply and demand imbalance in the domestic air market during the peak season. We also improved our net revenue margin to 7.3%, up from 6.6% in the prior year's fourth quarter, as we earned greater performance link [ph] incentives and communion [ph] fees from our partners and customers, respectively. As for our Hotels and Packages business, net revenue and transaction growth continued to be robust. Year-on-year growth on a constant currency basis for this segment was nearly 41% for net revenue and 44% for transactions growth. Additionally, our net revenue margin in H&P was 12.5% for the quarter, which is in line with our expectations. Moving on to report our expanding profitability. In Q1, we expanded our adjusted operating margins of 10.5% as against 7.8% same period last year on lower year-on-year net revenue growth rates. This expansion was a result of operating leverage in all of our cost lines except our outsourcing costs under SG&A, as we ramped up our call center staffing level in line with our growth plan for the year in the offline Holidays business. Now let me turn the call back to Deep as he will share our updated fiscal 2013 net revenue guidance.

Thanks, Rajesh. As we progress further into fiscal 2013, our operating environment remains just as challenging as it was a quarter ago. The domestic airline industry continues to be pressured with slowing passenger growth and reduced seat capacity. More recently, India's overall growth rate continues to be quite slow [ph] while the rupee exchange rate remains volatile. Yet even in the face of these challenges, the team at MakeMyTrip continues to execute and deliver on our promised targets by adapting and innovating to deliver value for our customers. We believe that our strong strategic and financial position in the industry will allow us to pull further ahead of our competitors and maintain market leadership despite the various near-term challenges. Our strong balance sheet will also allow us to invest organically and inorganically to grow our business for the long term, while we continue to invest in creating a true online travel company, as we believe in the scale and leverageability that pure e-commerce businesses can offer. Now I'm pleased to state that we are maintaining our full year constant currency net revenue growth guidance of 30% to 32% year-on-year despite the current challenging operating conditions. However, we will have to adjust the prior U.S. dollar net revenue range of $103 million to $106 million to $99 million to $102 million solely to account for the further weakening of the rupee exchange rate as it moved from our previously assumed rate of INR 53 in quarter 1 to INR 55. Thank you all for listening in today and we'll now begin the Q&A session. Operator, please?

[Operator Instructions] You have a question from Lloyd Walmsley of Deutsche Bank.

Wondering if you can comment on the Hotel transaction growth. It looks like about 44%, which was a bit of a deceleration from the last few quarters. Wondering, in spite of the Hotel 3.0 website and the ad campaign, why you think it's decelerating. And I guess, some of that might be just lapping the LTT acquisition but where do you see that going forward? And then on the Air side, it looks like transaction growth was down 9%, which seems a little bit below the industry growth. Wondering if there was any activity or changes in levels of activity on Jet and IndiGo now that they're back on the site. And then if you can just comment on what kind of market share the recent low-cost carrier additions bring to you guys.

Okay. Lloyd, if I can take that, this is Rajesh. As far as I think e-growth [ph] that you pointed out as 44%, you're absolutely right in pointing that number out. Actually from our point of view, the growth was in line with our expectation, sequentially, optically from the last quarter, it looks lower but clearly at a higher base. More importantly, as we mentioned in the script early on, what we are more excited about is the standalone online transition growth for the Hotel, which was in this quarter, close to about 60%. So the lower traction that we are seeing to your comments on result goals are actually relevant more for the online transactions or online order bookings. And there, we've seen an impressive growth of about 60%. Can I address you to just repeat the second part of your question?

Yes, I guess sticking with the Hotel side, do you expect transaction growth to continue in that range through the balance of the year? I think this quarter is the first quarter where you're fully lapping the acquisition of LTT. So is that kind of -- is that range that you saw in terms of year-over-year growth where you expect it for the balance of the year?

So Lloyd, in all fairness, we will have to wait and see. This was a high season quarter as well. What we can say is that as far as online hotel booking market share is concerned, we have a lot of headroom there and we are seeing a lot of traction in terms of shift from the other players or the off-line players of more and more people coming and booking online. We see that trend to continue as we go along but difficult to make a comment on -- or a forward-looking comment on the overall H&P transition's role [ph] at this point in time.

And then the second part of the question on Air was just talking about your transaction, the clients, do you think that's in line with the industry that the data's been a little mixed for Indian passenger traffic but wondering if you think that -- it sounds like you think that your share is being held and then just what kind of market share are the new low-cost carrier additions bringing you that you mentioned earlier?

Yes, Lloyd, as I keep pointing out, for the month of June as we mentioned in our script as well, we have been able to sustain our market share on the domestic air market side, which was the case before the capacity reduction in fuel [ph] as well. So a good point was the case [ph] distribution that we are not losing our shares, market share on domestic air despite the tough environment. So we are confident that we should be able to sustain and maybe marginally improve as we go along as well. But the overall macro situation on domestic air, especially with respect to the reduced capacity, is likely to stay for some time.

Okay. Can you comment on just what kind of market share some of these new additions are bringing? Is it meaningful?

The new additions, you mean the low-cost carriers?

You bet.

Lloyd, this is Deep. So Lloyd, I think we're expanding -- there's only been expansion from really one airline meaningful, which is IndiGo. FlyShare have added a couple of -- 4 small aircrafts and gold [ph] added a couple but really the significant expansion is from IndiGo. The shift is towards low-cost carriers but then all the full service carriers also all now have actually a secondary brand which is their low-cost brand. So overall market shift has definitely been over towards the low-cost side. It's probably now 70% of the total fleets flown, 35% are probably under low-cost brands even if they are part of either Air India or Jet Airways but they're on the low-cost brand so there's been more shift there. However, the full promise of low cost is yet to be borne out particularly over the last 2, 3 quarters where fare is a bit high due to factor cost increases both on the fuel side as well as the rupee-dollar depreciation, has really kept the pricing pretty high. And that station is really one of the key causes why the air fares are what they are today. So we haven't really been able to see a lot of new consumers come in and fly at these fare levels. In fact, it's fair to say that a lot of people, I've mentioned in my script, have actually stayed away from flying, particularly in the leisure segment. So I think the full benefit of this is yet to be seen.

The next question comes from Manish Hemrajani of Oppenheimer.

This is Benign Doctor [ph] in for Manish Hemrajani. The only one -- there is a good reward from color of jungle [ph] convenient booking behavior. Maybe to win the November, [ph] the potential macro and currency situation. I'm wondering if you are gearing to more of domestic travels and short exits [ph] as you can spot some gains around?[ph]

I got the first part of your question. I'll take that and then ask you just to clarify what you meant by the second. So I think the consumer behavior, as you would imagine, is taken up between air or rather between transportation and accommodation. So on the transportation side, people are obviously looking for more and more budget options. I just mentioned before, a lot of the leisure-only travel as well as some degree of the small business travel is actually staying away or trying to cut back on travel given the current air fares which have gone up, like we said almost 30% on a year-on-year basis. Look, they're definitely keeping the discretionary [ph] travel and impacting that negatively. And so a bit of that is moving towards rail, but as you know in the holiday season, rail tends to be -- have a supply shortage so there's a supply constraint out there. I think the industry buses are actually picking up pretty smartly and are picking up a lot of the travel which can’t afford that rail side. So particularly in Southern India and Western India, we're seeing a good uptick coming from interstate bus travel and for -- what we will for us [ph] is that a lot of that is actually moving online, and I think we have reflected that in our gross numbers on the bus side up 80% year-on-year basis, and we think this is just the beginning of an interesting line of business. On the accommodation side, again people are looking for budget options. Guest house property is definitely doing very well. Other non-chain and 3-star and below properties doing very well, which is good [ph] for us. And a lot of our growth as we dissect and we look where it's coming from, is indeed coming from the budget properties. And we think that's again, what we -- a trend we're going to see a lot of going forward. I guess the budget properties, a lot of customers are actually searching for them online. Also the online customers tend to be value customers. And so it's a sweet spot to have budget properties as well as guest house properties on our side. We think that that's smart [ph] looking for value deals. Will you repeat the second part of your question?

[indiscernible] revenue and how much -- what is the mix between the budget hotels and the other [ph] chains?

Overall in the landscape, I mean for the industry and we can't comment on that, we're not really reporting our split of business. But if you look at the landscape, largely about 80% - 20% would be the independent to chain hotel by rooms and by properties that will actually be even more accentuated by [ph] difference. Of course on all the new properties going in now are part of the Indian chains and the [ph] international chains, but it's heavily skewed in favor of independents more than big [ph] budget. So budget is a level of [ph] definition, it depends where you want to cut back but let's say you want to cut that at about $50 a night and below that the place [ph] would still be about maybe 70-30 in terms of properties.

You said the bus ticketing is gaining some traction. How much would be that as a percentage of your net revenue?

As a percentage of net revenue, it is very small at this point in time, just low single digits but what we were trying to highlight was that we were getting traction in terms of transition growth, which was over 80% in the last quarter. So going forward, we expect it to become an important item on the overall revenue line.

Okay. Last one for me. How much was the impact of lending [ph] IndiGo in ranging with that?[ph] [indiscernible] during the I mean in -- just remind me [ph] so how much was the impact on the numbers in borders?[ph]

So we don't do Jet and IndiGo blackout which was just for [indiscernible] because it was just for 1 week and then the other one was for 2 weeks. It was not really material from the overall quarter when it comes to overall net revenue on transactions. It did impact a bit and which is I guess, in part, reflected in the overall net transaction growth. But as we mentioned earlier in the month of June, we saw there is a steady pace [ph] coming back and holding on to our overall market share close to about 11%.

The next question comes from Chad Bartley of Pacific Crest.

I wanted to ask a couple of questions around operating margin. I think it was about 10.5% in the quarter, down year-over-year from 12%. I want to make sure I'm looking at that correctly. And then how are you going to manage expenses and margins this year in this difficult environment? Is it still possible to expand margin or should be more conservative?

I'm not sure you're looking at the item [ph]. It's actually not down year-on-year. Year-on-year, same quarter, it is actually up. It was 7.8% last year same quarter, and it is now 10.5% as Rajesh pointed that out. I don't know if you were looking at the last quarter numbers. Last quarter, where it was 12.4% and from there it is down to 10.5%. But year-on-year, it is actually up and that's the right way to look at it and just look at seasonality aspect of it. And we do expect and we would look at the expense analysis, you would see the leverage actually has come from year-on-year pretty much as we then said, except the outsourcing cost as part of SG&A as I mentioned earlier. There, we'll be having [indiscernible] future quarters because you ramp up typically conference [ph]. In Q1, given that it was a peak season and the peak exceeded capacity which evened out in the subsequent quarters, so we do expect the leverage to continue and report a better margin, marginally better margin as we go along and some improvement year-on-year as well.

There are no further questions.

Since there are no more questions at this time, I would like to thank everybody for joining our call today. We love to see from -- hear from you next quarter, as we announce our Q2 results. Thank you again for listening to our Q1 earnings call. Bye-bye.

This concludes today's conference. You may now disconnect.