MakeMyTrip (MMYT) is an India-based venture offering a wide array of travel services and products, primarily to the blossoming Indian market. India’s economy has been on a steady rise, fueling the increase in travel and tourism. MakeMyTrip has been a prime beneficiary, with an impressive 36.6% quarterly sales growth rate and a share price surging over 92% year-to-date. It is a trip worth considering, one with high risk but potentially high reward in emerging market stocks.
MMYT In India’s Exploding Travel Industry
MakeMyTrip is an online travel company operating globally, focusing on India, the United States, Southeast Asia, and Europe. The company provides services through three main segments: Air Ticketing, Hotels and Packages, and Bus Ticketing.
India is estimated to continue to be among the fastest-growing nations globally in the next decade, with the travel and tourism sector poised to explode. The country’s rapid middle-class expansion and substantial GDP growth underpins the travel boom.
Predictions show that by 2030, India will have an additional 140 million middle-income households and 50 million high-income households. This demographic shift, increased leisure time, improved transport infrastructure, and the rising appeal of spiritual tourism contribute to domestic and outbound tourism growth. India is predicted to become the fourth-largest global spender on travel by 2030.
MakeMyTrip’s Recent Financial Results
The company reported significant growth in the Fiscal year 2024. Revenue spiked 35.7% compared to the previous financial year, growing from $593 million to $782 million. The company’s annual gross bookings increased 24.9%, amounting to $8 billion.
In 2024, MakeMyTrip made a significant turnaround in profitability, posting an annual profit of $216.7 million against a loss of $11.2 million in the previous fiscal year. The company made notable strides in operating profit, which surged 76.7% year-on-year to reach $124.2 million. The fourth quarter’s results exhibited a similar growth pattern, with gross bookings and revenue expanding by 23% and 38.1%, respectively. The adjusted operating profit for the quarter registered a 70.4% growth, reaching $32.4 million.
The driving force behind the remarkable performance was the growth of the international air ticketing business, which saw segment growth of over 50%. Meanwhile, the hotels and packages segment showcased a robust growth rate of 28.8%, with adjusted margins growing by an impressive 41.3%, resulting in a margin of $88.9 million for the quarter. With a healthy cash position of over $600 million at the year-end, the company plans to use the robust cash flow to invest in promising organic and inorganic growth opportunities.
What Is the Price Target for MMYT Stock?
The stock has been upward trending, climbing over 206% in the past year. It trades at the high end of its 52-week price target of $28.13 – $93.29 and continues to show positive price momentum by trading above its 20-day (85.03) and 50-day (80.02) moving averages. The stock trades at a premium to industry peers, with a P/S ratio of 13.61x compared to the Travel Services industry average of 3.5x.
Analysts following the company have been bullish on the stock. For instance, BofA analyst Sachin Salgaonkar recently raised the price target from $88 to $95 and kept a Buy rating on the shares, noting optimistic travel trends in India.
Overall, Makemytrip is rated a Strong Buy based on six analysts’ recommendations and recently assigned price targets. The average price target for MMYT stock is $95.17, representing a potential upside of 5.47% from current levels.
Concluding Thoughts on MMYT
MakeMyTrip is effectively capitalizing on the impressive growth of India’s burgeoning travel and tourism industry, supported by the country’s economic upswing and expanding middle-class demographic. As a leading online travel service in India with a strong presence in the US, Southeast Asia, and Europe, the company has showcased an impressive revenue growth rate, driving the shares to triple in value over the past year.
The company’s robust cash position also allows it to invest in lucrative organic and inorganic growth opportunities. MMYT offers a high-risk, high-reward investment opportunity for those looking to tap into the booming emerging markets.
