MakeMyTrip Ltd (MMYT) 2022 Q1 法說會逐字稿

Hello, everyone. I'm Jonathan Huang, Vice President of Investor Relations at MakeMyTrip Limited. And welcome to our fiscal year 2022 first quarter earnings webinar.

Today's event will be hosted by Deep Kalra, our company's Founder and Group Executive Chairman. Joining him is Rajesh Magow, our Co-Founder and Group Chief Executive Officer; and Mohit Kabra, our Group Chief Financial Officer.

As a reminder, this live event is being recorded by the company and will be made available for replay on our IR website shortly after the conclusion of today's event. At the end of these prepared remarks, we will be hosting a Q&A session.

Furthermore, certain statements made during today's event may be 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 event 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 13, 2021. Copies of these filings are available from the SEC or from the company's Investor Relations department.

I'd like to now turn the call over to Deep to begin today's webinar.

Thank you, Jonathan. Welcome, everyone, to our first quarter earnings call for the new fiscal year. I would like to start by wishing all our listeners good health as the world continues to manage through the ongoing COVID-19 pandemic.

As shared on our previous call in late May, India was hit by a massive second wave of new infections during the reported quarter. The second wave started in late March '21 and peaked in early May with more than 400,000 new cases a day. The situation, fortunately, has significantly improved over the last month or so with weekly average infections now trending at about 40,000 new cases a day in the last 2 weeks.

While this number is still high in absolute terms, it's only roughly 1/10 of the peak rates seen in the reported quarter. More encouragingly, the percentage of our population partly or fully vaccinated has also doubled since early May.

Today, more than 1/4 of the country or over 346 million-plus people have been partially vaccinated, and over 95 million people are now fully vaccinated. This has significantly helped lower the 7-day average of daily recorded deaths to less than 1,000 per day, down from a peak of nearly 4,200 per day in late May.

Recently, our central government has ordered another 600 million vaccine doses and is targeting to have 940 million-plus adults vaccinated by the end of this calendar year. While social distancing, masking and restrictions on movement during the second wave has helped to bring down new daily infections, we believe once more of the population gets vaccinated, life and travel would gradually return to normal as exemplified by the experience of countries with higher vaccination rates.

While the disruptions from the pandemic have been unprecedented, it has helped accelerate the shift towards online shopping across India during the last few quarters as e-commerce users has reached over 250 million so far. According to a report published by Worldpay FIS, the e-commerce industry has substantial room for further growth and can reach over $110 billion by 2024.

Though the travel industry has been significantly dented by the pandemic, our long-term view is that the inherent need of people to experience the world and travel hasn't changed. Our views are being validated by the pent-up demand seen within the leisure segment as restrictions are lifted.

We witnessed this demand after the first wave's impact ended and are likely to see a similar pattern play out as the recovery from the second wave continues to unfold.

It's fair to say that our operating results this past quarter fared far better than the same quarter a year ago when our entire nation was forced to shut down in April and May of 2020.

Helping to further the industry's hope for a faster recovery is clearly ongoing vaccinations, sensible and targeted movement restrictions and higher lockdown fatigue that would drive travel demand going forward.

In anticipation of recovery post the second wave, the Ministry of Civil Aviation has also increased airlines' flown capacity to 65%, which hopefully should continue to ramp up as the demand situation improves. Similarly, more than 90% of chain hotels and over 80% of top independent hotels are now fully open for bookings.

Lastly, during the second wave, we were fortunate enough to have an established pandemic playbook to help us weather through the current bout of virus-induced volatility with minimal operating cash burn during a highly challenging operating environment in the reported quarter.

The good news is that we believe that the worst of the second wave may be behind us, evidenced by the improving week-on-week travel demand seen across our business since early July. With increased vaccination rates, we believe that domestic travel demand will continue to recover in the coming months and online users will use the MakeMyTrip group of brands to plan and book their much needed and desired post-pandemic trips.

We're also encouraged to see our government's recently announced support for the travel industry by providing financial assistance to multiple tourism stakeholders in the form of working capital and personal loans.

Furthermore, the European Union has also recently accepted the use of Indian-made vaccines for travel to 16 countries within the region as part of the Green Pass program. Countries allowing fully vaccinated Indian travelers to forego quarantine requirements include France, Austria, Switzerland, Germany, Iceland and 11 more. We anticipate over time, more countries will once again open its borders to our travelers, which will help us gradually recover bookings for outbound travel services.

With that, I'd like to hand the call over to Rajesh to share some more color on our fiscal first quarter.

Thank you, Deep, and hello, everyone. I hope you and your loved ones are safe and healthy during this ongoing pandemic.

As Deep had already outlined, the progression of the virus during much of fiscal Q1, I would like to just echo the fact that the -- fortunately, the impact to our business this past quarter, while still very material, was not nearly as severe when compared to the same quarter a year ago. This was due to the fact that the country managed to bend the massive second wave without resorting to a complete nationwide lockdown and adopted a more localized and nuanced approach this time around. In fact, most forms of transport and hotel properties, while operating with greatly reduced service levels during the hardest hit month of May were still available.

During much of the quarter, we continued to adapt to ever-changing travel restrictions and requirements and stayed focused on the projects with a long-term view, while managing operating costs tightly in the short term to minimize quarterly cash burn.

As you can see, while the post first wave business momentum was lost during Q1, our performance compared quite favorably year-on-year.

We achieved more than 2.8x the volumes in segments in our air ticketing business, nearly 11x the volumes in room nights in our hotels and packages business and nearly 10x increase in volumes of tickets in our bus ticketing business. This performance was supported by essential travel continuing with restrictions, while leisure and business travel were more severely impacted.

Also importantly, while this quarter's adjusted operating losses were unavoidable, given the dramatically reduced level of demand due to the second wave, we were still able to restrict our cash losses to less than $5 million in the quarter by effectively managing our variable costs.

During the quarter, the business tracked similarly to the number of new cases recorded across the country with volumes starting to gradually decline late March into April followed by a steep drop-off in May and then recovery beginning in late June.

The good news is that we continue to see the recovery momentum continue into the first couple of weeks of July as daily flown passengers for our domestic air ticketing business reached 40% of levels achieved in January of 2020 and nearly 50% of recovery on a book basis. We have also seen similar pattern of demand profile play out within our domestic hotels business with average daily room nights bottoming out in the month of May, followed by a sharp month-on-month recovery in June and continuing into July, with roughly 50% recovery to pre-pandemic levels so far seen in Q2.

Not surprisingly, our bus ticketing business also saw similar demand patterns and has also seen good recovery to nearly 35% of pre-COVID levels in July to date.

With caseloads remaining controlled and vaccinations increasing, we are hopeful that if there is a third wave, it would be less severe and that the recovery trends seen so far in July will continue.

Now I would like to share some more color on the progress and trends by lines of business in the reported quarter, starting with our hotels and packages, where we are pleased to see that over 70% of the room capacity within our domestic hotel network is open for bookings at the end of the quarter.

Furthermore, our hotel partners remain keen on driving high occupancies by offering attractive rates for customers. The ongoing recovery since June has also been led by the premium segment of hotels, which allowed us to grow our share with these partners to exceed even pre-pandemic levels in July. Across most major chain hotels, we are achieving greater volumes in the first half of July versus the same period pre-pandemic.

During the second wave, our team remained focused on impactful projects to improve customers' experience with our brands. For example, we added greater contextualization within the funnel experience than before, like adding relevant reviews for family travel.

We enriched our points-of-interest databases to enable more refined searches and also improved upon our free cancellations offering to respond to the need of the hour during the second wave. For our alternative accommodation supplies, we also launched Request to Book, which will help us onboard more hosts by allowing them to interact with potential guests before agreeing to rent out their properties on our platform.

In addition to improving the experience for shoppers and suppliers, as reported earlier, we added additional distribution channels to cater to different customer segments. MyPartner for B2B demand now has over 13,000 partners on board. Furthermore, our SME-focused myBiz channel and the Quest2Travel corporate platform with very convenient business travel booking solutions continue to expand with the new accounts.

Now let me share some of the highlights from our air ticketing business, where the market recovery of passengers flown now stands at 36% versus pre-pandemic peak in January of 2020, an improvement from the 15% market recovery level in May.

To highlight the sharp pace of recovery, we are seeing in the first 2 weeks of July that the number of passengers flown across our brands reached 40% of pre-pandemic levels, up meaningfully from 18% in the May through trough and up from 26% seen in June.

If we compare the same data on a book basis, we hit nearly 49% of our pre-pandemic daily segments in the first 2 weeks of July.

During Q1, our flight teams also continue to adapt and roll out new products to help travelers navigate through the myriad of changes during the second wave. As an example, we made changes to handle bookings for customers with no last names for brand Goibibo and served up even greater personalization of offers on our listing page to drive greater conversions.

As international travel slowly opens up to Indian travelers, we also rolled out a destination adviser to help users search between multiple destinations that best suits their needs based on popularity, price or duration of flight as well as COVID and visa requirements. In addition, we rolled out a maps view of all the countries embedded with their respective COVID requirements to further help users plan their trips better.

Now let me move on to share an update on our bus ticketing business, where roughly 50% plus of the inventory is back online. In July, so far, we are also seeing roughly 33% in daily seat recovery within our business, highlighting the strong recovery momentum that has continued since June. The good news is while the bus business was also impacted by the second wave, with tough demand in May, we have seen regions like Western and Northern India recover faster than the South and the East as they were first hit with the second wave and also the first to see a reduction in cases.

Our previously announced program for top bus operators called Primo has continued to gain good traction and has seen improved customer satisfaction scores amongst passengers traveling on these services. In addition, we rolled out redBus Sathi to help new operators on our platform with onboarding and familiarizing themselves with the available online tools in order to help them drive greater occupancy and greater business volumes.

Moving on to share a quick update on our other ground transportation business, which includes cabs and train ticketing. As a result of second wave, the volume of cab rides in Q1 was about 1/4 of pre-pandemic levels and just about 1/3 of pre-pandemic average daily seats for rail ticketing. The good news is the profitable business has also seen very strong recovery in the first week of July versus pre-pandemic as we've seen nearly a recovery of -- to 1/2 of rides per cabs and over 3/4 recovery for rail.

During the quarter, we launched our cabs product within our corporate myBiz channel, adding in greater functionalities like specific cabs and vendors based on the type of corporate customers, employee status and easier flow for approvals and wallet usage.

Now allow me to share some trends seen in our corporate business, which was naturally severely impacted by the second wave in Q1, where recovery dropped to 16% for myBiz and 8% for Q2T on bookings terms versus pre-pandemic. The good news is exiting Q1 and into July, we have seen sectors like pharma, health care, real estate and biotech companies recovering to almost 100% of their pre-COVID industry level, travel levels, and other sectors like utilities and defense companies following close behind.

Overall, in July, we've seen recovery in excess of 50% for myBiz hotel room nights and nearly 100% recovery in Q2T. When compared to pre-pandemic days, we are also anticipating nearly 53% recovery of active accounts on our platform versus pre-pandemic and expect nearly a full recovery in conversions.

Despite the severe impact of the second wave in Q1, we were successful in acquiring 60 new midsized and large accounts and about 274 SME accounts, and successfully renewed our annual agreements with all large enterprises that were up for renewal in Q1.

With that, I would like to hand the call over to Mohit to share more color on our financial results in Q1.

Thanks, Rajesh, and I hope all our listeners are staying safe and healthy. As the reported quarter was hit by the second severe wave of the pandemic, which dented the business recovery achieved over the last fiscal year, we focused on minimizing operational cash burn during the quarter whilst trying to grow year-on-year over Q1 of last year, which saw the first wave of the pandemic. As a result, our quarterly adjusted operating losses were less than $9 million compared with losses of over $21 million during Q1 of last year.

Adding back noncash depreciation and amortization expenses, the adjusted cash operating losses were less than $5 million during the quarter compared to losses of over $16 million in Q1 of last year. While we are encouraged with the business recovery seen so far in July, we shall remain focused on operating cost optimizations, particularly until the time that the industry fully recovers from the pandemic.

During the reported quarter, our gross bookings increased by over 330% year-on-year in constant currency terms. But due to the second wave, it was down by over 60% on a quarter-on-quarter basis.

Moving on to our business segments. Air ticketing adjusted margin stood at $19.2 million, representing an increase of almost 4.5x the level achieved in the same quarter a year ago, but lower by half on a quarter-on-quarter basis on constant currency terms.

Our strong market share in the domestic air ticketing business continued to help us as this part of the business has shown more resilience compared to other traveling services, particularly in the periods severely hit by the pandemic waves.

The adjusted margin for our hotels and packages business stood at $12.3 million in Q1, which is nearly 10x the adjusted margin in the same quarter a year ago but lower by nearly 2/3 on a quarter-on-quarter basis in constant currency terms.

As for our bus ticketing business, adjusted margin stood at over $3.9 million and represented nearly a 12x improvement from the year ago levels of Q1 last year, but down nearly 2/3 as compared to the prior reported quarter in constant currency terms.

Lastly, the adjusted margin in Other businesses was $2.5 million, representing a year-on-year improvement of recovery of nearly 2.2x but just less than half the levels achieved in the prior reported quarter in constant currency terms.

Let me now share some details around operating costs and profitability during the reported quarter where we continued to sharply focus on fixed cost discipline and optimizing marketing efforts amidst the second wave.

I'll begin by addressing our variable expenses, which largely comprised of marketing and sales promotions. Before entering the fiscal first quarter, with rising confirmed new cases of COVID-19, we quickly scaled down our planned marketing campaigns, which were intended to stimulate demand during the peak summer travel season based on recovery seen in the previous few quarters. As a result, these expenses could be curtailed and stood at about 4.4% of gross bookings and improvement even from the prior reported quarter's spending of 4.8 percentage points of gross bookings.

As for our fixed costs, our adjusted personnel and SG expenses came in at about $28 million compared to about $33.3 million in the previous quarter. This was largely achieved by flexing our variable outsourcing expenses to reflect lower customer servicing volumes during Q1.

Lastly, while we are focused on tight cost management and being cautious of a potential third wave, we believe with increased level of vaccinations and the medical infrastructure created post the learning from the second wave, we have passed the worst of the pending and headed for better times for the travel industry in the forthcoming quarters.

With that, I'd like to turn the call back to Jon.

Thanks, Mohit.

(Operator Instructions)

The first question comes from Gaurav Rateria from Morgan Stanley.

Good show in a tough and challenging quarter. So my first question is on actually the cash flow because if I look at the last year same quarter, the cash flow performance was very, very different. There was a huge working capital release, and there was a positive operating cash flow.

But this quarter, we have seen a working capital locking of around $24 million, $25 million, and the operating cash flow is quite negative numbers. So just trying to understand what really changed? And how should we contextualize this quarter versus the last year same quarter when the pandemic hit us in the country?

Sure, Gaurav, maybe I can take that. And if you see last quarter, pretty much right until the end of the quarter, the business was completely down, and recovery pretty much started only from the second quarter onwards.

As we said, June was a comparatively better quarter within the reported -- better month within the reported quarter, and therefore, business recovery had started happening to some extent from June itself. And therefore, in that manner of sorts, these are not really like-to-like kind of in quarters.

And right through the pandemic, there have been significant amount of changes to the working capital cycle, depending upon the kind of recovery or setback that we have seen on the business side. So that will be a little difficult comparative to make between this quarter versus the same quarter a year ago.

Okay. And second question is on the competitive intensity in each of the segments. Any color on what's changed in the last couple of months or maybe things are stable? Any color on that will be very helpful, both on -- especially on the air and hotel and package segment.

Yes. Gaurav, this is a good question. Maybe I can take that. Well, I think it'll be fair to say that nothing significant here to call out, which is materially different from what it was in the last quarter or in the last few months.

Pretty much the market remains the same. From our point of view, we continue to sort of incrementally keep gaining our market share on the domestic flight side, while there could be sort of other players who are also trying to maybe be a little bit more aggressive on discounting, et cetera. But from our point of view, we are sort of holding on to or improving our market share.

And yes, so in terms of just the old OTAs, if you will, I mean, as you know, the Cleartrip has been acquired by Flipkart. We haven't really seen any action on that front from their side as well. So all in all, as far as air segment is concerned, no real change from what the situation has been in the past.

As far as hotels is concerned, again, no significant change at all. The global OTAs continued to be -- given the fact there's no international travel that has opened up, so continued to be operating at the same sort of levels. No massive action. I'm sure that they're still all focused on their respective markets as well.

And in the Indian market from an intermediary standpoint, we are sort of clearly leading the pack out there as well. So again, it's a very stable situation, if you will, from a competitive landscape standpoint.

And last question from me. On the regulation side, any color on the recent draft regulations, which came out from Consumer Affairs Ministry? And how to think about the impact on the business? Also, there have been some news flow around the CCI, putting obligation around putting the sort of budget hotel players back on the platform. So on the regulation side, any color will be helpful.

See, maybe on the draft rules first, and the rules are draft, and we've all sort of got together as pretty much every industry player in the e-commerce space and drafted our representations through various industry forums and then have sent our feedback and inputs to the ministry and just basically explaining the rationale behind for all the inputs and the recommendations sent.

And I think it'll be fair to say, typically, in a draft rule, always, you will find where there would be gaps. And the good news is that it is -- the industry is being consulted right now. And the fact that we've all sort of got together and given our representation back. So let's see how it goes.

I think it's going to be an iterative process, but we are very actively engaged on -- just in terms of our own participation in terms of just along with the industry -- other industry players in the forums and going back to the ministry and representing that.

We'll keep, I guess, everyone posted how things evolve there. As far as -- Mohit, do you want to take that CCI question?

Yes, sure. I mean, Gaurav, could you just repeat it once more?

Yes. There were some news flow around the CCI putting an obligation to put the low-budget hotel operators back on the platform, which were not there earlier. So any color on that? If that has changed anything on the business side for us?

Sure. The CCI actually kind of recently in the honorable commission had passed a consent order, and essentially, a consent order is that all parties have consented to kind of work together. And therefore, they have passed on a consent order basis which the relisting for some of the chains who have not been on the platform can be kind of initiated or needs to be initiated and we are on that process. And hopefully, we'll kind of share more as the process kind of gets to culmination. But we are on it. And like I said, this is a consent order, and therefore, it is coming with the active consent of MakeMyTrip as well.

The next question comes from Ashwin Mehta of AMBIT.

So congrats on good set of numbers. One question in terms of net revenue margins this quarter, what drove the increases in the hotels and the air ticketing piece? Because hotels, it seems is still being driven by the more premium hotels.

And secondly, if you can give some indication in terms of sustainability going forward for that?

Sure, Ashwin, maybe I'll take that. As you can imagine, this was a quarter severely really hit by the second wave of the pandemic. And we have seen when the market kind of demand appetite is extremely low, we'll usually find suppliers kind of willing to put in a bit more in terms of margins to try and find liquidity and try and kind of drive volumes. And this is exactly what we've kind of seen playing out during the reported quarter.

Like, we have been calling out in the past, we believe our margins are largely kind of in a stable. If you look at it strategically, you could always have slight increases or decreases depending upon the specific quarter.

Overall, like we had called out, our hotel margins were kind of coming in more around the 17%, 16%, 18% levels in the last few quarters, but that was also because there was a significant mix of premium, which was getting sold, that has started correcting -- course-correcting over a period of time. And we'd not be surprised, particularly on the hotel side, the margins continue to remain strong, more on the higher side of the 17% to 20% range rather than necessarily being on the lower side. So I think a little bit of tactical for the quarter and also, to some extent, a part of the mix kind of gradually addressing itself.

Fair enough. And just one more. If I look at the domestic passenger data given by DGCA, there was a 53% sequential decline. But in our case, there's almost a 62% decline in our flight segment. So anything in terms of the higher competitive intensity on the air side because there are quite a few of the players, which are pure air in terms of their exposures? So it would be good to get a sense in terms of that because some of them are playing on that no convenience fee and even IRCTC seems to have launched something with a lower convenience fee for...

Maybe I can take that also. And usually, the gap kind of largely comes in on account of the manner that the data gets reported. So you can see, DGCA data would be kind of more based on packs traveled during the period, whereas our numbers will be more based on packs booked during the period. And therefore, there is generally an overlap or a little bit of a difference between the 2 sets.

Overall, therefore, we kind of keep giving our share -- our market share in the domestic market. And like Rajesh had called out, our market share has remained strong. It hasn't kind of diluted. It's only been kind of improving over the year. So therefore, it's not that we have lost share. This might be more a gap in the manner that the data is kind of called out by the DGCA versus the manner in which we report, which is based on bookings.

Okay. Fair enough. And the other part in terms of the competitive intensity there and any impacts or any changes that you have seen in terms of strategy from, say, a Cleartrip, which has now been acquired by Flipkart?

So Ashwin, maybe I can take that. Nothing specific from Cleartrip side yet. It's the same what we've been seeing it for the last few months or what we saw in the last quarter. And even the other players, again, it's just a similar nature. I mean there is no real change in the intensity either going up or going down. There is some amount of discounting that is happening in this segment in the market and that has been continuing for a while. Let's see how it sort of goes. I mean, at some point, as the market gets a little bit more consolidated, it should get rationalized going forward as well.

Next question comes from Rishit Parikh from Nomura Securities.

Congrats on a decent quarter here. So I've got 2 questions. One, I think we've seen some of the discounting come back again on the website, right? So I just wanted to understand your views. Is it largely driven by the hotels and the partners? Or we are also equally participating to that extent? And how should we think of profitability, say, the next quarter onwards? That's the first.

And second, if you could just provide a little more color on the corporate segment. What are we essentially trying to do there? How many corporates or SMEs have we onboarded because that's one area where I think the competition could comparatively be much lower, right, where some of the new OTAs are not focusing. And what are we adding in terms of value, which can sort of help us gain significant market share in the -- once the recovery comes through?

Yes. So let me just maybe take both of them, Rishit, both are good questions. So the first one, the answer to your question and your observation is that, yes, it is predominantly coming from the partners. And we -- just to make sure with -- if you would recall, we had called it out earlier as well. So there's a lot of the now tools and the features that are available for the partners for them to be able to decide on the go, depending upon how much do they want to do, what is their focus area, would they want to drive the yield from their point of view or the occupancy from their point of view. They keep coming up with different sort of promotions, different sort of offers depending upon how they see the demand moving.

Yes, we do indefinitely provide them a lot of the intelligence, a lot of the market intelligence in terms of how the demand is moving and the variability of -- or the volatility rather of the demand based on different price points, et cetera.

So therefore, a large part of the sales promotions or the offers, et cetera, that you would see would be driven by the partners, leveraging our platform for sure. And therefore, we haven't really seen our own sort of margin getting diluted because of that. And I think you should also keep in mind that during the difficult quarter, as we were just going through the second wave of the pandemic, the focus is a lot more on occupancy. And there is definitely more sort of desire to invest more money into the market to just capture the latent demand sort of there in the market.

So I guess we've been working very closely with the partners to make sure that we are able to just get them the best of the ROI of the investment that they end up making on our platform. So that's the kind of play that's been happening on the hotels side.

And now coming to the corporate -- second question on the corporate side, you have a really good question again. And we've been focusing -- we also believe, by the way, that, that's a very important area. We had spotted this 2, 2.5 years ago when we started making investment, and we've been continuously improving the product experience. In fact, both in terms of just changing the -- just improving or enhancing the experience from a booker standpoint, whether it's a booker who is the actual employee traveler or someone who is the assistant or an admin or a central booker, if you will, in a particular organization, looking at what their specific needs would be in terms of making the whole booking and the Go Safe experience very, very seamless and frictionless for them, on one side.

On the second side, we've been expanding the product portfolio. So as I just called out in the script early on that we have now added the cabs product as well, besides we've got flights, we've got hotels, both domestic, international; flights, both domestic, international. And we've now added cabs, and rail and the other products are in the pipeline.

So we'll keep adding more and more products so that it becomes almost like a one-stop shop for a business traveler for a particular organization, whether it's a small and medium enterprises or it is a large corporate, which is being catered to from our another platform called Quest2Travel.

So we'll continue to keep sort of working on it. We do believe that it will be an interesting space for us to be able to gain market share on that. In the last quarter, we acquired close to about 250, 260 accounts, which were like small, medium enterprises accounts, midsized accounts, including midsized accounts and good about 60-odd large and upper end of the midsized accounts as well. And every quarter, even in the previous quarters, similar sort of trend of acquisition has been happening as well.

So lot more focus on acquiring as the business has been or the business travel was sort of quiet and on all these -- like in the last 3, 4 quarters, the focus was to acquire the customers as much as possible and enhance the product capabilities. So clearly, we believe that all of these investments are going to pay rich dividends in the quarters to come.

Rishit, maybe just to add on to what Rajesh has already called out and addressing some other parts of your question, our own spend, if you look kind of that I've called out, actually on a quarter-on-quarter basis, our marketing and promotional spends have actually come down as a percentage of gross bookings.

So compared to about 4.8% in the previous quarter, these expenses actually stood at about 4.4% in the current quarter, which has been reported. So we've not really began deploying significantly from our end, and like we had mentioned, that possibly will only go up as we start seeing significant amount of recovery coming through, not necessarily in a time when the recovery is actually kind of getting dented. So I just wanted to kind of call that out.

Secondly, if you see, despite the significant impact on business recovery, which had gone into kind of high 50s, and even if you see some of the exiting months of the previous reported quarter, we had kind of gotten into almost like 60s and 70s in terms of domestic recovery, this quarter has pretty much seen recovery only in the high teens when it comes to volumes.

And despite kind of the significant dent on volumes, our adjusted cash burn was kind of pretty much under $5 million, which means as we start kind of seeing some amount of business recovery come back, we should hopefully be kind of back on the path to profitability. And this quarter is probably more like an aberration because of the significant impact from the second wave.

Understood. That was helpful. Rajesh, just one follow-up on that question. How many SMEs or large accounts would -- we would have onboarded by now? And what is the market size like that we would aim to get there?

Well, Rishit, good question, again. So maybe I'll just follow up with the actual number. But Jonathan, would you have that handy with you? Maybe you can just read out again.

Yes. So Rishit for Q2T kind of a large corporate enterprise, we've about 100 accounts onboarded so far. And for our myBiz program, we've about 1,000 key accounts, close to 5,000 small, medium enterprises already logged in. And for even much smaller business, we've about 10,000 already onboarded.

So our last question comes from [Amol Desai from Midas Work Investments].

[Amol], you are still on mute.

[Amol,] you might want to use the chat function.

Maybe if there's anybody else in the queue, you could kind of head them up.

Yes. So the next question comes from Citi, Vijit Jain.

So my question -- I have two questions. One is on the domestic air travel business. Could you give a sense of what your current market share would be? I know last quarter, you mentioned a number of mismatches between how DGCA reports, and given the small scale of the overall flight business there, it might be a little colored. But just a sense on what your market share right now would be in the domestic aviation business?

And my second question is just looking at some of the other competition you have in the air space that have raised funds recently and are looking to maybe get more aggressive in the market post fund raise. So how do you look about the competitive dynamics, at least in the air space going forward from that perspective?

Sure. Vijit, maybe I can take that. Our market share is close to about 30% of the total market right now. And maybe I can just take this opportunity to clarify the earlier question or the comments from our side as well in terms of flown traffic, how market flown passengers have been growing because we do keep a good track of those numbers as well.

So as I see those numbers for the month of June, for example, the flown passengers market was about 23% recovery, about 95 million flown passengers; and July 1 to 4, for example, was about 36%. And then subsequently, in the subsequent weeks of July, it has only been increasing, and it has gone to about 50%, 55% as well in the last few days. And average daily departures has also been sort of increasing month-on-month from May onwards. May was 29%; June, 33%; and July 1 to 4 was about 44%.

And our recovery on the loan passengers actually has been ahead of the market. So market was growing at -- recovery was at 36% on flown, and we were at 41% like-to-like, let's say, for the first 4 days of July. And similarly, for June, when -- while market was at 23%, and we were at 26%. So just to clarify that a little bit more. And this is more like an absolute like-to-like comparison so that there is no confusion. And I've already shared the market share number broadly as well.

Yes. And sorry, the second part of my question is more than 1 of the competition in the air space specifically, I guess, I can call it, have raised funds in recent times, right? How do you see the overall competitive dynamic evolving from here, I guess? And do you see Booking making more active interest in the domestic business? I know Booking is dominant in India inbound, but do you see them making a more concerted effort in the domestic hotel market as well? Those are my questions.

Maybe I'll take that, Vijit. So Vijit, I think through the pandemic, what we have noticed and what has also been shared to us, with us by some of our hotel partners is that most of the multinationals have actually not been active, a large part of their business is inbound. So with inbound completely drying up, in fact, even till today, nobody -- no foreigner can actually come back to India, even if you're double vaccinated, which is an anomaly in itself, but since we can go to various countries now.

But because of that, I think the business has been muted, the business development efforts on the ground have been muted. Not to say that they're not doing anything on domestic. We do track those numbers carefully, and they are obviously much smaller than they used to be in a much smaller part because there's no inbound as well on them.

So we have taken that opportunity actually to double down on because we felt, firstly, only domestic travel was coming back. It is squarely a forte of ours. It was a desperate need for our hotel partners because their fixed costs are much higher than intermediaries. And I think those partners who were willing to come forward, take some calculated risks, open up their hotels either entirely or partially, we were able to work closely with them and bring forward deals, which I think met the market requirement.

And I would like to stretch that even beyond hotels itself. So if you look at alternate accommodation, that's been one of the silver linings of the COVID cloud, where we have found that a lot of people who -- either who would not have looked at alternate accommodation, villas, et cetera, earlier on, they were only hotel customers, now found that this was probably the safest option and started looking at such opportunities. And therefore, we went and doubled down and contracted many more. We are now close to -- getting close to 30,000 contracted independent properties.

So that has been, I think, partially strategic, partially opportunistic, but I think it's worked out quite well because now we squarely established ourselves in this space also. So yes, that's what I think we can share on that question.

Great. And just one final question from my side. Any updates you can give me on the ad business and on the TripMoney business? And how you look at it in the -- in this current fiscal year, fiscal '22? What do you expect from those verticals?

Sure. Vijit, while it's actually quite early days for both because just in the last quarter or 2 only, we sort of rolled out both of them in a meaningful fashion, if you will. But it is definitely very promising from a long-term point of view.

So right now, just from a product enhancement standpoint, on the ad tech platform, the third-party advertisement platform, we recently enhanced the capacity to add sponsored listings as well. So right now, the focus has been just to make sure that the platform is more comprehensive in terms of capability. But having said that, we've already started doing a lot of the partner side advertisements, et cetera, as well.

In terms of numbers, I think in the subsequent quarters, when it becomes more meaningful and significant, probably, we'll be able to -- will make more sense to give you more color on that. It's just a very humble beginning right now, but it definitely has a lot more promise.

Now as far as TripMoney is concerned, the same sort of the status of the platform right now. Again, the focus there is to add more products. We recently have added more insurance products. We are also now bringing in credit card, and we potentially would want to bring in like the other adjacencies like the foreign exchange as -- much before maybe the international travel opens up.

And the way we are looking at that platform is that while it will continue to keep offering the travel-related or travel complementary products, but it could also be an independent sort of platform, just adding the -- more other financial services sort of product as well. And again, we are thinking a lot more long term. These are clearly the platforms where we are thinking that these are more long-term bets. And right now is the time to invest in the capabilities. And in times to come, we'll definitely get more sort of meaningful numbers in terms of transactions or the revenues coming in from there. And as they become worth sharing, we would definitely come back and share them.

Well, thank you, everybody, for joining our call today, our first webinar. And if you have any questions for us or the team, please feel free to reach out directly. And I wish you all a very nice day. You may now disconnect. Thank you.

Thank you.

Thank you, everyone.