MakeMyTrip (MMYT) Q3 2026 earnings review
Growth Re-Accelerates, but Convertible Notes Obscure Profitability
MakeMyTrip delivered a decisive operational beat in Q3, with Constant Currency (CC) Revenue growth accelerating to 15.4% YoY (up from 12.6% in Q2), signaling a recovery from the macro-slowdown seen in H1. Adjusted Operating Profit hit a record $50.7M (+10.2% YoY). However, headline Net Income collapsed 73% to $7.3M. This is optics, not operations: the drop was driven entirely by a $24.2M spike in non-cash interest expenses related to the 2030 Convertible Notes. Excluding this accounting noise, the business is structurally more profitable than ever, with Adjusted Net Profit rising 14.4% to $51.4M.
🐂 Bull Case
The company is extracting more value per transaction. While Air Ticketing volumes were flat (+0.4%), Adjusted Margin for the segment grew 20.4% (CC). Bus Ticketing margin surged 26.1% (CC), demonstrating pricing power and operational leverage.
The 'Others' segment (Ancillary, Other Travel Services) is growing exponentially, up 43.3% YoY in revenue (CC). This diversification reduces reliance on the commoditized air segment.
🐻 Bear Case
Gross bookings for Air Ticketing grew a meager 0.4% YoY (reported). While yield management is strong, the lack of volume growth indicates persistent supply-side constraints in the Indian aviation market or market saturation.
Net finance costs skyrocketed to $27.7M (vs $4.8M a year ago) due to the new convertible notes. While non-cash, this accounting drag will suppress GAAP EPS for the duration of the notes (due 2030).
⚖️ Verdict: 🟢
Bullish. Look past the messy GAAP Net Income. The core business is re-accelerating after a sluggish H1, margins are expanding across all segments, and the company is generating record Adjusted Operating Profit. The volume stagnation in Air is the only blemish, effectively offset by yield growth.
Key Themes
The Profit Divergence: GAAP vs. Adjusted
A massive divergence has opened between reported and adjusted profitability. Reported Net Income fell 73% to $7.3M, while Adjusted Net Profit rose 14% to $51.4M. This gap is driven by $24.2M in interest expense on the 2030 Convertible Notes. Investors must switch to Adjusted metrics to gauge true operational health.
Bus Ticketing & Others Powering Growth
Accelerating. While Air is mature, the 'Bus Ticketing' and 'Others' segments are the new growth engines. Bus Ticketing revenue grew 21.2% (CC) and 'Others' grew 43.3% (CC). These high-margin segments are increasingly diversifying the revenue mix away from pure Air/Hotel dependency.
Domestic Air Supply Constraint
Stable/Stagnant. Management explicitly cited 'exceptional supply side constraints from Indian airline carriers' as the primary reason for muted Air Ticketing revenue growth. With Gross Bookings up only 0.4% reported, MMYT is relying entirely on take-rate expansion (margin +20.4%) to drive growth in its largest segment. This pricing power may have limits if volumes don't return.
Hotel Segment Volume & Price Mix
Accelerating. Hotels and Packages Gross Bookings grew 15.9% (CC), driven by a 20.3% increase in room nights. This volume-led growth confirms robust leisure demand. Interestingly, revenue grew slightly slower (14.4% CC) than bookings, implying a slight mix shift to lower ADRs or aggressive pricing to capture volume.
Marketing Spend Efficiency
Stable. Marketing and sales promotion expenses rose 10.5% YoY to $52.3M. However, as a percentage of Gross Bookings ($2.78B), marketing spend remains disciplined at ~1.9%, consistent with prior periods. Customer inducement costs (discounts) rose significantly ($103M vs $80M), suggesting higher promotional intensity was required to stimulate demand.
Other KPIs
Robust liquidity. Includes cash, equivalents, and term deposits. The company remains over-capitalized, providing ample firepower for M&A (like the recent Happay acquisition note) or further buybacks.
Accelerating. Up 33% from $0.39 in the prior year. This metric strips out the noise from the convertible notes interest and share-based compensation, offering the cleanest view of shareholder value creation.
Accelerating. Margin expansion was impressive, rising to 7.0% of Gross Bookings from 6.1% a year ago. This efficiency gain cushioned the blow of flat volumes.
Guidance
Management provided no specific numerical guidance for Q4 or FY27 in the press release. They cited 'robust travel demand' and a focus on expanding wallet share. The lack of specific guidance is standard for MMYT releases, but the re-acceleration in Q3 trends suggests continued momentum into Q4.
Key Questions
Air Volume vs. Price Disconnect
Air Ticketing Adjusted Margin grew 20% while Gross Bookings were flat (+0.4%). Is this margin expansion sustainable via take-rates, or do we need volume growth to return to drive FY27?
Promotional Intensity
Customer inducement costs jumped to 3.7% of Gross Bookings from 3.1% last year. Is this the new normal to combat competition, or a temporary lever to stimulate demand during the quarter?
M&A Strategy Post-Happay
With $830M in liquidity and the Happay acquisition closing, are you looking for more B2B/Corporate targets, or will capital allocation shift back to consumer-facing consolidation?