Ladies and gentlemen, thank you for standing by, and welcome to the MakeMyTrip Limited Fiscal 2020 Fourth Quarter and Full Year Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Jonathan Huang, Vice President of Investor Relations. Please go ahead.

Thank you, Cindy. Welcome, everyone, to MakeMyTrip Limited Fiscal 2020 fourth quarter and full year earnings call. I would like to remind everyone that certain statements made on today’s 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. These statements are not guarantees of future performance, are subject to inherent uncertainties and 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 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 23, 2019. Copies of these filings are available from the SEC or from the company’s Investor Relations department. I’m joined today by Deep Kalra, MakeMyTrip’s Founder and Group Chairman; Rajesh Magow, Co-Founder and Group CEO; and Mohit Kabra, our Group CFO. I would now like to turn the call over to Deep to begin discussion for today.

Thank you, Jon. Welcome, everyone, to our fourth quarter and full year earnings call for fiscal year 2020. I hope everyone listening is staying safe and healthy. I’d like to begin by sharing my thoughts on the reality we are faced with today and how we, as market leaders, are managing through this crisis. The ongoing global COVID-19 pandemic has severely disrupted the way we live and carry about our everyday lives. Since the February 25 report published by the WHO, which called for travel restrictions or prohibition as a measure to come back COVID-19, regulatory travel curves have impacted most of us across the world. India’s stay-at-home orders had severely disrupted our domestic travel industry since March 25, when the nationwide lockdown was implemented. This order had put a complete stop to all travel until the recent gradual lifting of restrictions on domestic flights, buses and hotels, which was on May 25. The disruptions to business have been unprecedented in our company’s history. To say that these are trying times for our team would be an understatement. However, I firmly believe that these are also the times when a company’s values and strengths are tested to the fullest. To emerge stronger at the other end of the crisis, we focused on four key priorities: first and foremost, to ensure our employees’ health and safety; second, to relentlessly support our customers amidst the utter chaos due to the sudden lockdown and flight cancellations; third, to reduce our fixed expenses to minimize cash burn during the short-term; and lastly, to aid the government in handling of the pandemic, while supporting the vulnerable section of our society. While my colleagues will share greater details on our cost optimization actions, I will elaborate more on the other three priorities. During the earlier parts…

Thanks, Deep, and greetings everyone. I hope you’re all healthy and well during these unprecedented times. I would like to start by sharing a quick overview of how the fiscal fourth quarter progressed and how we quickly adapted our business as the virus outbreak unfolded. Entering the quarter, we had planned to continue on our path of driving growth and share gains with a focus on minimizing quarterly cash burn. For the month of January, customer demand and bookings was full on plan across all our lines of businesses. Starting the last week of February, as news flow of COVID-19 outbreaks in Southeast Asia and Europe increased, we began seeing cancellations and a decline in bookings across our outbound travel products, but domestic demand remained largely intact. However, as we entered March reports of increased COVID-19 infections in India began to dent the demand across all domestic lines of business. As a result, we quickly pivoted our operations to minimize cash burn by flexing variable and semi-variable costs, in line with the reduction of revenue in the month of March. As a result, we still achieved our goal of further narrowing adjusted operating losses down to $10.3 million or $5.5 million adjusted operating cash loss, if you add back the precession expenses. We then followed up with a comprehensive review of our total cost structure to take some very difficult decisions on our fixed costs, including salary reductions to ensure we had plenty of liquidity to see us through the crisis. Starting in April, we implemented salary reductions to further preserve cash for our business. We also addressed other fixed costs by working with outsourcing partners to greatly reduce the amount spent. For support services, as we repurposed many of our in-house staff to help with this spike in customer…

Thanks, Rajesh, and hello everyone. I would like to echo that sentiment shared already by Deep and Rajesh that these are clearly unprecedented times for everyone. During the last reported quarter, I talked about the business crossing the $200 million milestone in terms of registered revenue while cutting down adjusted operating loss to about $11 million and the cash loss to about $6.2 million when added back with noncash depreciation and amortization expenses, and therefore getting closer to our breakeven objective. While we entered the reported quarter with the same operating momentum, we had to change gears halfway through the quarter due to the unexpected and unprecedented impact of COVID-19 on travel demand. We quickly shifted from driving growth with improving efficiency in variable costs like marketing and sales promotions to significantly cutting down fixed costs for the next fiscal year in anticipation of increasing travel restrictions by the end of the reported quarter. As we started seeing the impact to demand across our various lines of business during the first half of fiscal fourth quarter, we accelerated the ramp down of our marketing and promotional expense. As a result, despite the adverse revenue impact in later part of the quarter with lower marketing and sales promotional expense at 7.2 percentage points of gross booking versus about nine percentage points in the previous quarters, we were able to lower our quarterly adjusted operating losses to about $11 million in Q3 from – $11 million in Q3 to about $10.3 million in Q4. If we were to add back the noncash depreciation and amortization expenses our adjusted cash losses for the quarter came down from about $6.2 million in Q3 to about $5.5 million in the reported quarter. More importantly, as India faced in nationwide lockdown that began in late March,…

Certainly. [Operator Instructions] Our first question comes from [indiscernible]. Your line is open.

Thank you. And thank you for taking the questions. Can you elaborate a bit about the $30.8 million litigation set aside? Hello?

Yes. We can hear you. Sorry. Mohit, are you going to answer that? Are you on mute?

Hi. Hi. Hello. Yes. Sorry. I kind of kept it on the mute. I'll take the question. Like I mentioned, this is pertaining to one of our earlier acquisitions which we have also reported earlier as part of our 20-F for the last fiscal year. This is a matter which has been under litigation for a fairly long time now. We had received some adverse awards from the tribunal which was arbitrating on the matter and those awards are – have gone against us. However, we’ve kind of taken those awards to the appropriate court for appealing against them. And we believe we have got a good ground to kind of be able to get the awards reversed. The matter is still with the courts and these are multiple awards, and therefore, we believe there will be potentially multiple levels of appeal which will be available to us to appeal on these orders and also to resist any enforcement that might ensue. The matter currently is under litigation, and therefore, it would not be possible to call out, how this goes, but we have kind of taken a provision because we have got a number on the award, and the tribunal is kind of closed these proceedings. So we are awaiting a final judgment from the court in the matter, but have provided for the amount in the meanwhile. So it’s more one time exceptional amount.

Thank you. And I have one last question. These are extraordinary times, we all realize, but this management have any goal for when MakeMyTrip will become a profitable enterprise?

Like I called out – if you see the last fiscal year that we have reported, the objective was to kind of get into a range of within $10 million in terms of losses per quarter. The company was able to get there. In the third quarter of the fiscal year wherein we had kind of – our adjusted cash losses were down to about $6.2 million. In fact, even in Q4, if you see, despite part of the quarter being significantly impacted by COVID, we were able to kind of keep the cash losses at about $5.5 million. And within that, I've called out, as per our management estimate, at the months of January, February were pretty much breakeven months until the impact of COVID hit us very sharply in March. So I think from a point of view of getting the business to turn a full cycle, I think we were able to achieve that during the pre-COVID period; however, with COVID coming in now, at least for the next quarter or two, there's almost like a reset of the business because pretty much all travel services have been shut for the first two months of the fiscal which we have already underway in starting April. We do believe Q1 will probably see the worst of impact on the business because revenues are going to be very meager or negligible. And therefore, we have taken significant steps to cut down the fixed cost in a big way. The quarterly run rate on fixed cost has been brought down from almost like $45 million, $50 million to less than $30 million. And therefore, we do expect that we will be able to kind of keep the burn into the 20s, if at all, during the first highly impacted quarter. But thereafter, we should be able to kind of improve with every passing quarter as the business recovers. So our expectation is that we should be able to get back to that range of $10 million, hopefully, over the next few quarters, and thereafter, target breakeven. Again, a little too early because our businesses, like I said, travel services is just about started – restarted in a manner of sort, just like two to three weeks back. I think over the next quarter or so, we should get a clear color of how the trajectory is looking like and how soon can we get there.

Thank you.

Thank you. And our next question comes from the line of Rishit Parikh with Nomura. Your line is open.

Hi. Thanks for taking my question. Am I audible?

Yes. Yes. You are.

Okay. Thanks for taking my question and then congrats [indiscernible] despite adversity, right? But just wanted to understand couple of things; one, from an inventory perspective, what are the trends you're seeing in terms of [indiscernible] business, hotel business? Are we seeing a lot of fallout because some of these guys will be at the margin and will not be able to survive this pandemic rise? So that's one. And then how will that sort of impact the take rates going into the next couple of quarters because there could be likely compression from airlines and from H&P there could be likely compression in the budget hotel, right? How should we think about it going in the next couple of quarters?

Yes, Rishit. Hi, Rajesh here. Maybe I can just take, they’re both good questions. On the supply side, if you look at it from the hotel business standpoint, as you know that it has been very fragmented supply ecosystem that we have. Our understanding and belief right now is – and this is based on all our engagement that we've kept it going with our partners across the board all segments during the lockdown as well is that, yes, there could be a possibility where very small low-budget kind of properties where they may feel some kind of a stress, and may not be able to make it or may not be able to sustain the long-term kind of weak revenue or slow recovery as the business comes back. But a large part of the industry should still be able to manage. The fact is that for quite of them, actually, it's not necessarily the only business, they actually have multiple other businesses in travel et cetera, as well, so there could be a bit of a setback temporary and often not have any business happening. But I – as a just an overall business also, they're able to sustain it. And – and a lot of the other higher-segment or mid-segment category of hotels have already made investments. And the ones invested in the property already, large part of the capital investment has already happened and begin on the fact that they've been able to just restructure their debt structure, if at all, that, that becomes an issue. On all things considered, we don't believe that there is going to be material impact on the supply side, if there could be small fraction or percentage of or supply that might not be available. And the overall supply is huge.…

Okay. Okay, fair enough. Second, I just want to understand, I think there is a fair business area that you mentioned that you're confident of gaining share. So just wanted to understand what are you seeing in terms of competition? I would assume on the air side, [indiscernible] weaker, which should give us some run rate, but on the H&P side, what are we seeing essentially from a competition standpoint?

Again, Rishit, if you look at the competition overall, so you know that we have OTA, the other OTAs, a couple of them that you already mentioned and then there are global OTAs, specifically in the hotels and packages side. And then there has been competition from the offline world as well, all the tour operators, the traditional travel agents and so on, whether it is historically Cox & Kings and then they went out of business sometime back even pre-COVID, they were going through their own set of challenges. So on an overall basis, across, whether it is an off-line competition or an online competition, our belief is that – and this is again coming somewhat out of the past experience as well, whenever there has been crisis that we've been able to just pull it away and emerge more stronger given the brand strength and now the three distribution platform strength that we have and the overall kind of market position that we have in consumers' mind for brand perception for all three brands that we have now. We believe that we would be relatively speaking in a better position. Given that the amount of challenge is very big right now and some of those numbers are out there in the public, whether it is the cash position for some of the players who are already public that's quite apparent and visible or the cost structures or whatever kind of market share that they had. So – and even for the off-line world, given – specifically for tour operators, given the fact that the international travel is going to take, relatively speaking, more time to come back, there's going to be a lot more focus on the domestic. I think, actually, the recovery of the travel is going to be led by domestic travel. And we're kind of very strong on that front as well. In fact, for the last quarter, we've been just making some serious amount of investments on our online platform to make sure that we kind of bridge the gap, if at all, there was, whether it was on supply side or on our platform from a customer experience standpoint. So I guess all things considered, that's what our belief is. And like I said, it is also coming from the fact that we've seen this happening even in the past whenever there was a down cycle.

Thank you. And I’m not showing any further questions at this time. I'd like to thank everybody for joining the conference today. This concludes the call. Thank you for your participation.

Thanks everybody.

Thank you everyone.

Thanks everyone.