MMYT: Conviction List Inclusion Will Drive Long-Term Upside Despite Air Travel Weakness

Analysts have trimmed their fair value estimate for MakeMyTrip by about $0.50 to roughly $111.40 per share, citing slightly higher discount rates, modestly softer growth and margin assumptions, yet maintaining a constructive view supported by recent positive coverage and conviction-list inclusion.

Analyst Commentary

Recent Street research reflects a broadly constructive stance on MakeMyTrip, with valuation frameworks balancing strong growth optionality against execution and macro risks in the travel cycle.

Bullish Takeaways

• Bullish analysts point to the initiation at an Outperform rating as evidence that MakeMyTrip is still in the early stages of institutional coverage expansion. This is seen as supporting a higher long term valuation multiple as awareness and liquidity improve.
• The addition to a major APAC conviction list at Goldman Sachs is viewed as a vote of confidence in management execution and market leadership. This reinforces the case for sustained share gains in online travel and experiences.
• Weakness in domestic air travel is framed by bullish analysts as cyclical rather than structural. Current share price underperformance is viewed as a favorable entry point ahead of a potential normalization in volumes and pricing.
• Ongoing product enhancements and platform scale are expected to drive operating leverage over time. This supports the view that even with slightly higher discount rates, MakeMyTrip can still deliver attractive risk adjusted returns.

Bearish Takeaways

• Bearish analysts caution that the new price targets in recent coverage imply more modest upside from current levels. This suggests that execution needs to remain near flawless to justify premium growth and margin assumptions.
• Concerns persist that a prolonged slowdown in domestic air travel could weigh on near term revenue momentum, making it harder for MakeMyTrip to consistently beat expectations and sustain elevated valuation multiples.
• Higher discount rates, reflecting global macro uncertainty and risk premia for emerging markets, cap some of the upside in discounted cash flow based fair value estimates even if the long term growth story remains intact.
• There is also some unease around competitive intensity and potential pricing pressure in core categories. If mismanaged, this could delay the timeline for achieving the margin expansion embedded in more optimistic models.

What's in the News

• MakeMyTrip has reshuffled its leadership team, elevating long-time Group CFO Mohit Kabra to Group Chief Operating Officer to oversee day to day operations, cross business execution, and company wide strategy alignment, signaling a push toward more scalable growth. (Key Developments)
• The company appointed veteran finance executive Dipak Bohra as Group Chief Financial Officer, bringing three decades of experience, including a 23 year tenure at Wipro, to lead finance, legal, compliance, and investor relations functions. (Key Developments)
• The new CFO will report to COO Mohit Kabra. Both will continue under Co Founder and Group CEO Rajesh Magow, underscoring an institutionalized leadership structure as MakeMyTrip targets long term expansion in the travel market. (Key Developments)

Valuation Changes

• Fair Value: Trimmed slightly, moving from about $111.90 to roughly $111.40 per share, reflecting minor adjustments to the model.
• Discount Rate: Risen slightly from approximately 12.03 percent to 12.06 percent, signaling a marginally higher required return.
• Revenue Growth: Eased modestly from about 21.27 percent to 21.07 percent, indicating a small reduction in forward growth expectations.
• Net Profit Margin: Fallen significantly from roughly 9.94 percent to 8.68 percent, pointing to a more conservative view on future profitability.
• Future P/E: Increased meaningfully from around 68.5x to 78.5x, suggesting a higher implied valuation multiple on projected earnings.