Welcome to MakeMyTrip's Fiscal 2014 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 the 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 30, 2013. Copies of this filing are available from the SEC or from the company's Investor Relations department. And now, I would like to introduce the speakers from MakeMyTrip, Deep Kalra and Rajesh Magow. Please go ahead.

Thank you, operator, and welcome to MakeMyTrip's fiscal 2014 first quarter earnings call. Before we get to the quarter's results, I would like to share with you an overview of the environment that we are currently operating in. On the macroeconomic front, India's economic growth has moderated to a level which we believe is far below the country's true potential. This has also weakened the rupee-to-dollar exchange rate while increasing its volatility. From a supplier standpoint, the domestic airline industry continues to supply through some choppy whether as capacity constraints and a weaker rupee kept airfares higher quarter-on-quarter by about 20% in the reported quarter, which negatively impacted passenger growth potential. Additionally in June, the flood disaster that took place Uttarakhand, a popular region in Northern India to escape the summer heat, has also weighed heavily on the minds of leisure travelers. On the other hand, we laud the reforms and positive actions being taken by the Indian government and the civil aviation sector. For example, the pending Jet Airways and Etihad equity partnership shows clear willingness on the government to move towards a liberalized and more market-based economy. Additionally, we believe that AirAsia's announcement to begin domestic services later this year will help stimulate air passenger growth through competitive pricing. Lastly, we continue to be bullish about mobile, presenting a potentially huge opportunity for us as there are currently 22 million 3G connections in India and expected to double by the end of fiscal 2014. Internet usage on mobile has already surpassed desktop access nearly 1 year ago in India. That trend shall only continue given the proliferation of sub-$100 Android-based smartphones from Samsung, Micromax and Karbonn and the drastic fee reduction being offered by telecom companies to stimulate 3G data usage. We believe we are best positioned in…

Thanks, Deep, and hello, everyone. The team at MakeMyTrip remain bullish of our long-term business prospects even as India continues to face headwinds in economic growth while developing the rupee-to-dollar exchange rate, capacity constraints in the domestic airline industry and lower year-on-year airline fees. In the face of these difficult operating conditions, we continue to focus on growing our Hotel and Packages business and further strengthened our leadership in the OTA market in India. As Deep mentioned, it is our relentless focus on delivering a superior end-to-end customer experience that has built MakeMyTrip as the brand of choice for online travel in India. As we had stated earlier, 2014 will remain an investment year for us at MakeMyTrip as we focus on widening our lead in the marketplace and drive the online adoption of hotel and holiday bookings in India. Furthermore, we continue to invest in HotelTravel.com to scale up its online hotel business in Southeast Asia [ph]. While this decision will impact our ability to achieve adjusted operating profits in this fiscal year, we believe the near-term investments will only make our business and brand stronger and more sustainable in the long term. In the fiscal first quarter, on a constant currency basis, we grew gross bookings by 26.5% year-on-year to over $335 million, while revenue less service costs grew -- rose to over $26 million, representing an increase of over 11% year-on-year. We recorded a $2 million adjusted operating loss as we continued to make investments in the key areas of technology and marketing while recognizing other expenses during the quarter. As we've been sharing all along, our strategy is to expand our Hotels and Packages business and improve our net revenue mix. As you can see in our results, we are well along our way towards achieving…

Thanks, Rajesh. Lastly, before we get into Q&A, I would like to take this opportunity to share some organizational changes in our leadership team approved by the board yesterday that will set the stage for the next stage of growth for MakeMyTrip. Over the last few years, the company has been growing organically and via acquisitions into new markets and geographies. In order to provide the required focus on each of the key strategic growth areas players of the company, we've been working on growing and augmenting our senior leadership structure over the past few years. We have invested strongly in our leadership team. And as a result, the company has senior executives who are now ready to take on larger roles. Going forward, I would like to give more personal focus on international businesses, strategy, certain specific projects and overall execution excellence. At the same time, our core business needs continued focus on execution, along with product and service enhancements. In order to enable the above, I'm delighted to announce the very well-deserved promotion of my colleagues, Rajesh Magow, to CEO-India from this current role as CFO and COO; and Mohit Kabra to CFO from his current role as Senior Vice President, Finance. As Chairman and Group CEO, I will continue to lead the group's strategy, drive M&A and ensure the common vision of delivering the best experience for customers across different lines of businesses and geographies. I'm confident that the changes will further help achieve our company's long-term vision here in our Indian and recently acquired business [ph] in Southeast Asia. I congratulate Rajesh and Mohit on their achievements and promotion. And with that, we'd like to open the floor for Q&A.

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

I'm wondering if you guys can comment on the net revenue margins. They seem to be pretty strong in both segments with Air actually ticking up slightly. So wondering what we should be expecting there going forward. And then a couple others, if I may. The H&P segment seems to be showing significant transaction growth, but it seems like that's coming in at lower prices. I was wondering if that's just faster growth in stand-alone hotels versus packages. If you could comment there. And then lastly, on the balance sheet, just curious if you can talk about the working capital outflow in the quarter as well as the cash flow from financing inflow and what's moving those line items.

Sure. So let me just start with the net revenue margin first. So as you would have noticed, Hotel and Packages margins improved from 12.5% to 12.9%. So starting with Hotel and Packages first and I'll come to Air after that. So in this quarter, what we are focused was, and it was a really kind of part 2 move in terms of just focusing on and not necessarily the entire 10,000 or 10,000-plus hotels that we had. Because it was high season, we focused on just growing volumes for a subset of those hotels, and that has just grown volumes in those hotels and which helped us get the incremental margin from those hotels. So it was a part 2 move. The idea was to just provide more throughput to those hotels as we get into demand from the marketplace and get better margins from that. As we go along, we will continue to kind of just quarter-by-quarter think of different strategies to attack the hotel market as we keep growing our transactions. That, as you mentioned, the transaction growth was very robust year-on-year, about 22%. So that was the reason why Hotel and Packages margin improved. Now in terms of long-term outlook, we continue to maintain that this margin will incrementally improve, and we should probably handle it more from a full year perspective the incremental improvement that will happen on the margin front. And so viewed from a long-term perspective, as we've been highlighting, it probably has potential to go up to 15%. On -- but it'll be very slow and incremental movement year-on-year. So that's as far as the Hotel and Packages is concerned. As far as Air margin is concerned, as we've been talking about, our estimated range of between 5%, 5.5%. Last quarter, we…

Yes, I think that's helpful.

Your next question comes from the line of Chad Bartley with Pacific Crest.

One question. So I understand the adjusted operating income will be negative this fiscal year. But I was hoping you could share your perspective on fiscal 2015 and your thoughts on how you're going to balance in continuing to invest for growth versus potentially returning to profitability and what that might look like.

At this point in time, I would like to just tell you that right now, we are just kind of looking at indefinitely, the focus is on growth, and we have our estimate for the next few quarters and the complete -- and this full fiscal year. We would definitely want to see how the macro improves in the next few quarters, and then in the following quarters kind of just get to the then estimating how would it look like in the next year. I would not like to comment at this point in time for what is going to be our strategy largely because we have to just keep watching the macro environment. As we mentioned on our call, there's a lot of macro headwinds that are there in the difficult times. We have performed well in this quarter, but we have -- we are -- we continue to watch and expect some improvement happening, especially in the intermediation [ph] sector, the supply constraints going away probably later this year with AirAsia coming in, et cetera. So just to answer your question, at this point in time, I would kind of reserve my comment on how would it look like in the next year. But this year, what we have talked about and kind of just given our guidance on that. And that -- after that, we are -- that's sort of our current estimates [indiscernible]. And this -- let's just wait for another quarter or 2 for us to be able to just -- able to give a better insight and better educated kind of estimate for the next year.

[Operator Instructions] At this time, we have no more questions.

Well, thank you, everybody, for joining in our call. We look forward to speaking with you all in the next quarter's call. Thank you so much.

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