Mach Travel Solutions Ltd Q2 FY2025 Concall Summary

Key Takeaways

• H1 revenue surged 68% YoY, driven by marquee corporate MICE events across banking, insurance, cement and auto, with the order book extending into February and March.
• H1 margins are seasonally low (~10%) because fixed costs stay constant while revenue is lighter; management expects the heavier H2 to lift margins materially as overheads do not scale with revenue.
• IPO has removed the working capital constraint that previously capped growth, eliminating interest costs and making talent acquisition easier as a listed entity.
• The company is entering weddings and building a B2C platform, but is moving deliberately to avoid burning cash, prioritizing profitability over valuation.
• What to watch next quarter: Whether the order book value is disclosed to the exchange, the pace of new leader hiring, and any early traction in the cement and steel empanelments.

Revenue Performance & Seasonality

• H1 revenue driver: Large corporate MICE events from banking, insurance, financial services, cement, and automotive sectors, executed both domestically and internationally, produced the 68% YoY jump.
• H2 is structurally heavier: Fixed costs (rentals, manpower, overheads) remain virtually the same all year, so when more orders execute in H2, the accumulated half-yearly gross margin rises because overheads do not scale with revenue. Each individual invoice carries the same 10-15% margin.
• Revenue recognition: The company quotes a per-person turnkey figure covering hotel, airlines, travel, meals, liquor, and event. The full invoice amount is booked as revenue, and the cost of all items becomes the cost.
• No recession signal: The company saw no drop during the 2008-09 Lehman crisis and has never seen a drop in any year apart from the two COVID years. Management argues that when the economy slows, companies invest more in dealer networks to push sales.

Amit Bhatia: "You know, 2008-09, we did not have any drop. Of course, we were a very small company then. But we have seen steady growth from the first year, apart from the two bloodshed years of COVID. We have never seen a drop."

Order Book & Demand Visibility

• Order book strength: Two large exchange-intimated orders (INR 22 crores for Switzerland, INR 7-8 crores for France) are either executed or in execution, and confirmed orders extend into February and March.
• Customer retention model: Business is likened to a wedding: if the event manager does not score 100 on 100, the customer will never give the next wedding. Customers from 20 years back are still with the company, and word of mouth travels both ways.
• Customer mix: Out of 119 customers in the last six months, roughly 20% were new customers; the rest were existing customers, plus a few businesses added and some conferences missed last year that were added back.
• Order book disclosure unresolved: Management will speak to the merchant banker and, if allowed, will inform the exchange by middle of next week. This is conditional on legal verification, not a confirmed policy change.

Amit Bhatia: "I cannot make a forward-looking statement, but this is how the industry works. But I cannot commit to you, but I can say that this used to happen before and this year's order book is looking very good."

New Business Initiatives

• Kolkata office opened: A physical office in Calcutta with a new team under a vice president with ~24 years of MICE industry experience, aiming to tap the eastern part of India. Already empanelled with 4-5 companies that have MICE business of crores.
• New empanelments: Plywood companies, steel TMT companies, additional cement companies, and computer hardware companies (specific to eastern India) have empanelled Mach; RFQs have started coming in.
• Weddings entry: The company has picked up two huge weddings and has entered the weddings business more aggressively this year; management will soon inform the exchange.
• B2C portal "Book My Yatra": Compliance completed; hiring of CTO, technology team, and product team has begun. The plan is to migrate the ~1 lakh people who travel with the company annually from the normal conference app to the Book My Yatra app, adding tickets, visas, and insurance. The approach will be "very bottom light" with minimal or no marketing expenses.
• Cement industry penetration: Empanelment is in process with one of the biggest cement players; intent is to penetrate deeper into an industry with huge volumes.

Amit Bhatia: "We do not want to rush into, hiring a new team and getting aggressive in terms of marketing or sales. And we do not want to burn money. We want to go slow."

Competitive Position & Pricing

• Market stance: Management states the company is one of the leading players in the MICE industry among Indian companies and the only listed pure-play MICE company in India.
• Competitors named: Thomas Cook, SOTG, MakeMyTrip, EaseMyTrip, Ebix.
• RFQ process: The company gets empanelled with corporates, receives RFQs, and must be the lowest bidder while offering better concepts, itineraries, and designs than competitors.
• Pricing flexibility: No fixed margin formula exists; the company may be aggressive or less aggressive month-to-month, varying by domestic vs. international and case-by-case. Domestic businesses yield higher percentage profit than international.
• Crude oil and air ticket exposure: The company hedges risk and quotes fixed airline costs, so ticket price fluctuations do not affect profitability. Falling crude prices confer no competitive advantage.

Amit Bhatia: "I can proudly state that we are one of the leading players in the MICE industry in terms of the Indian companies. I think we are the only company which is only into MICE, which has been listed, and we are one of the leading ones in India."

Margins & Scalability

• H1 vs. H2 margin mechanics: Fixed costs remain virtually the same throughout the year. When business increases in H2, expenses stay the same while more orders are executed, so EBITDA increases. Each individual invoice maintains the same margin, but the half-yearly gross margin rises because overheads are fixed.
• Scalability at higher revenue: If revenue reaches INR 1,000 crores, buying power with hotels would improve, enabling better negotiation. The only additional costs would be office space, more people, more leaders, and more overhead in HR and Accounts. IPO funds have no cost of money, creating a win-win position.
• Growth philosophy: Management wants to go slow to protect profit margins, believing better control comes from slow growth rather than exponential growth. The plan is to hire 2-3 leaders in the next 2-3 months.
• No margin target given: When asked whether 15% EBITDA could become 20% at INR 1,000 crores revenue, management gave general comments about buying power and fixed costs but did not confirm any specific margin target.

Amit Bhatia: "We would like to go slow because we do not want our profit margins to be hit. It will help us. We will get better control if we grow slowly rather than growing exponentially."

People, Operations & Capital

• Headcount: The current team is 79-80 people. To reach INR 1,000 crores revenue, the team would need to be ramped up with leaders, support staff, young people to execute and travel with groups, and more people in accounts, HR, and administration. No set formula or metrics exist for team size.
• No contract labor: Local vendors handle stage, sound, and decor setup; the company's own team travels from Delhi, Mumbai, or Calcutta to supervise. No temporary tour managers are used.
• Working capital: Previously, money was a handicap: picking up INR 10 cr business required INR 5 cr payment the same evening to airlines and hotels. The IPO has removed this constraint, and the current working capital position is comfortable with no roadblock seen for the current year growth plan.
• IPO benefits: Funds available, no cost of funds, interest cost saved (previously borrowed from banks), and talent acquisition is easier as a listed company.
• Geographic reach: No physical limitations on geography; the company can do business in North America, cruises, Africa, and Peru. West India (Mumbai, the financial capital) drives the majority of business; North also contributes; East and South are smaller.

Guidance & Commitments

Key Metrics