MakeMyTrip (MMYT) Q4 2026 earnings review
Growth Stalls as Acquisition Costs Mount
MakeMyTrip's momentum hit a wall in Q4. Revenue growth decelerated sharply to just 1.9% YoY (6.7% in constant currency), breaking a multi-quarter streak of solid expansion. More concerning is the bottom line: Adjusted Net Profit fell nearly 30% YoY to $33.8 million. The core Air Ticketing segment reversed into contraction, while heavy customer inducement spending and a massive spike in finance costs from the 2030 convertible notes crushed overall profitability. While management points to tough YoY comps from the 2025 Maha Kumbh Mela and geopolitical headwinds, the deterioration in underlying profit generation paints a bearish picture for the quarter.
🐂 Bull Case
Bus ticketing and 'Others' (ancillaries) remain reliable growth engines. Bus gross bookings grew 18.2% YoY, and Other revenue surged 24.5%, proving the company's diversification strategy is effectively capturing non-flight travel demand.
Despite margin pressure, liquidity is excellent. The company ended FY26 with $782.8 million in cash and term deposits, providing ample ammunition for its $200 million share repurchase program (which saw $50.3 million deployed in Q4).
🐻 Bear Case
The primary volume driver, Air Ticketing, is shrinking. Gross bookings fell 6.2% YoY (-1.4% in constant currency), driven by a 1.8% drop in flight segments. If the core funnel narrows, cross-selling higher-margin products becomes significantly harder.
Adjusted Net Profit collapsed by nearly 30%. The culprit: a $13.4 million YoY surge in customer inducement costs and a massive jump in net finance costs (to $10.1M) linked to the 2030 convertible notes and FX losses.
⚖️ Verdict: 🔴
Bearish. Top-line growth has decelerated to a crawl, and the cost of maintaining user volumes through heavy customer inducement spending is severely eroding bottom-line profitability.
Key Themes
Air Ticketing Reverses into Contraction
Reversing. The Air Ticketing segment, historically the top-of-funnel acquisition channel, showed outright decline. Gross bookings fell 6.2% YoY to $1.44 billion, and flight segments dropped 1.8%. Management cited supply constraints in prior quarters, but the continued deterioration raises questions about long-term domestic air market share and pricing power.
Adjusted Margins Mask Soaring Acquisition Costs
A critical red flag: Management highlights 'Adjusted Margin' growth (+10.7% CC in Air, +11.5% in Hotels), but this metric explicitly adds back 'Customer Inducement Costs'. In reality, these inducement costs (contra-revenue) surged 17.2% YoY to $91.2M in Q4. The company is having to spend significantly more on customer incentives just to generate a 1.9% reported revenue increase, indicating a highly promotional and competitive environment.
Base Effects and Geopolitics Dragging Growth
Decelerating. Management attributed the weak February and March 2026 growth to a tough YoY comparison against the Maha Kumbh Mela festival in Feb 2025, alongside impacts from the ongoing West Asia conflict. While these are valid macro headwinds, they highlight the business's vulnerability to event-driven volatility.
Bus Ticketing Continues to Accelerate
Accelerating (Multi-quarter trend). Bus Ticketing remains the most reliable growth engine. Q4 revenue grew 7.3% YoY (11.4% CC) to $35.9M, driven by an 18.2% jump in gross bookings and a 27.6% increase in actual bus tickets sold. This segment benefits from ongoing integration with state transport corporations and private operators.
Ancillaries Providing Crucial Top-Line Support
Stable. The 'Others' segment (which includes rail, intercity cabs, travel insurance, and forex) grew a robust 24.5% YoY (30.6% CC) to $33.7M. As the core air ticketing business stalls, MakeMyTrip's ability to cross-sell these high-margin, low-friction services is carrying the overall top-line growth.
Hotel & Packages Volume Growth Offsets Pricing Weakness
Decelerating. While reported revenue for Hotels & Packages slightly declined (-1.2% YoY), gross bookings grew 5.2% and actual hotel-room nights surged 15.2%. This divergence indicates lower average daily rates (ADRs) or a mix-shift toward budget accommodations, but proves the platform is successfully driving volume in its most profitable segment.
AI Integration: 'Myra' Tool Scaling
Management continues to emphasize technology investments, specifically 'Myra', a GenAI-powered conversational tool used for trip planning and post-sales support. While not immediately visible in Q4 margins, the automation of customer queries (resolving ~50% autonomously in prior quarters) is a critical long-term lever to offset rising marketing costs.
Other KPIs
Stable. Grew a modest 4.1% YoY from $44.7 million in 25Q4. However, for the full FY26, it improved 12.8% to $188.8M, showing that while the year ended weakly, the annual operational leverage was somewhat preserved.
Accelerating significantly. Spiked from just $0.3 million a year ago. This was driven by a $23.8M interest expense tied to the 2030 convertible notes and $15.4M in foreign exchange losses, offset partially by a non-cash gain on the 2028 notes. This debt burden is heavily compressing the bottom line.
Stable. Liquidity remains robust, providing a massive buffer. During Q4, the company executed aggressively on its buyback program, repurchasing 900,000 ordinary shares for $50.3 million. $103.6 million remains on the current authorization.
Key Questions
Path to Normalization for Air Ticketing
Air ticketing gross bookings contracted by 6.2% this quarter. How much of this is driven by structural airline capacity constraints versus market share loss, and when do you expect volume growth to resume?
Sustainability of Customer Inducement Spend
Customer inducement costs jumped from $77.8M to $91.2M YoY in Q4, significantly outpacing reported revenue growth. Is this elevated promotional spend the new baseline required to maintain booking volumes in the current competitive environment?
Capital Allocation Strategy
With over $780 million in liquidity but rising finance costs dragging down net income, will the company look to retire more convertible debt early, or will excess capital be purely directed toward share repurchases?