MakeMyTrip Stock Sees Big Gains As Analysts Predict India Travel Growth

It may not have the global recognition of online travel giants Airbnb (ABNB) and Booking Holdings (BKNG), but India-based MakeMyTrip (MMYT) clearly has the attention of investors as the stock has gained more than 80% already this year. Further, U.S.-listed MakeMyTrip is up more than 200% from a year ago, helped by strong earnings and sales growth.

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Headquartered in Gurugram, India, MakeMyTrip is the leading online travel agency in its nation, helping customers book hotels, flights, buses and other services. After struggling during the Covid-19 pandemic, sales and earnings have jumped back and powered the stock to new heights.

Meanwhile, analysts see MakeMyTrip benefiting as more people travel to, within and from India — relying increasingly on internet bookings. But there will be competition for the market.

MakeMyTrip’s strong run has placed its shares on Investor’s Business Daily’s IBD 50 list of top growth stocks. Entering Friday, shares were hovering just below an 89.83 cup-base buy point as shown in IBD’s MarketSurge.

MakeMyTrip Stock: Fiscal 2024 Revenue Up 32%

By the time MakeMyTrip’s fiscal 2024 wrapped up at the end of March, the online travel stock had booked a strong year. Reported on May 15, MakeMyTrip said annual revenue increased 32% year over year to $782.5 million. The company earned $1.74 per share, compared with a loss of 10 cents per share in fiscal 2023.

MakeMyTrip recorded just under $8 billion in total bookings for the 12-month period. Chief Executive Rajesh Magow said leisure and business travel demand had recovered beyond pre-pandemic levels in India.

“Robust GDP per capita growth is leading to growth in disposable income, fueling more frequent leisure breaks by people,” Magow said on a recent call with stock analysts. “Ongoing investments in transport infrastructure, including airports, roads, railways, and public transportation have improved accessibility and travel experience to various tourist destinations within the country.”

Analysts with JPMorgan maintained a positive overweight rating on MakeMyTrip stock following the company’s fourth-quarter report.

“MMYT is evolving into a high-quality play on aspirational consumption that can enjoy several secular trends across rising disposable incomes, greater budgets for travel, and rising preference for overseas travel,” JPMorgan analyst Ankur Rudra said in a note to clients.

On that point, a recent report from consultants McKinsey and Co. said India’s projected 9% annual travel growth will allow its domestic travel market to overtake Japan and Mexico and become the world’s fourth largest by 2030.

MakeMyTrip Stock’s Big Run

While its roughly $10 billion market cap is smaller than global online travel agencies like Booking Holdings’ $135 billion and Airbnb’s $96 billion, MakeMyTrip’s triple-digit stock surge over the past 12 months stands out. Booking Holdings has added 46% over the same time frame while Airbnb is up 15%.

Like its travel stock peers, MakeMyTrip’s business took a big hit during the first two years of the Covid-19 pandemic. Sales fell 68% for the fiscal year that ended March 31, 2021. Shares fell most sharply at the onset of the pandemic, losing about 60% between late February 2020 and a low point in mid-April of that year.

MakeMyTrip stock bounced back gradually in the following months before forming a consolidation pattern that lasted nearly 11 months, which set the stage for a big run late in 2023. The pattern started in September 2022, before MakeMyTrip stock broke out beyond a 34.98 buy point early in August 2023, according to MarketSurge.

A strong recovery for sales after the pandemic slowdown helped. MakeMyTrip’s sales grew 95% for its fiscal 2023 ending in March of that year and 85% for its fiscal 2022.

MakeMyTrip’s Brands Include RedBus And Goibibo

Founded in 2000, MakeMyTrip initially catered to helping Americans book flights into India. The company started operating within India five years later.

In 2010, the India company’s stock began trading on the Nasdaq when the company had $84 million in annual revenue. But MakeMyTrip saw a big opportunity to grow because of the “relatively low, but fast-growing Internet penetration in India, coupled with income growth in India,” as the company said in its 2010 prospectus.

In January 2017, MakeMyTrip merged with online travel competitor Goibibo. Goibibo’s holdings included RedBus, a leading online bus booking platform in India. Meanwhile, China-based travel company Trip.com (TCOM) is a major shareholder, with 45% of total voting power as of March 31, according to MakeMyTrip’s annual report.

MakeMyTrip, Goibibo and RedBus are three leading brands of the broader MakeMyTrip group. The firm also has launched segments that provide travel solutions to companies and employees, as well as for travel agents.

For its fiscal 2024 ending in March, commissions from booking hotels and packages drove 56% of the company’s total sales. Air ticketing drove 26% of sales while bus ticketing produced 12% of revenue.

MakeMyTrip Rivals

Meanwhile, analysts project that India’s travel spending will grow as its economy expands. Last year, India surpassed China as the world’s largest country by population, according to United Nations estimates, with a population of more than 1.43 billion.

Earlier this year, analysts at Goldman Sachs picked MakeMyTrip stock as one of its top picks to benefit from a growing “affluent” population in India.

MakeMyTrip is “a key beneficiary of double-digit growth in India’s ‘affluent’ income cohort, the core user base of the company,” the Goldman report said. “In addition, we expect a continued online shift to aid MMYT’s revenue growth, with MMYT growing faster than the underlying market due to its favorable exposure to underpenetrated segments of hotels and international travel.”

There is competition for India’s travel market. Airbnb, Booking Holdings and Expedia Group (EXPE) operate in the country for both inbound and outbound travel. There also are smaller India-focused competitors like Yatra.com.

MakeMyTrip executives see enough growth to go around.

“Look at the growth rates, you will only see this market growing,” MakeMyTrip CEO Magow said at a March conference. “That means there is room for many. It shouldn’t be drawing battles for the sake of it.”

The company could not be reached by IBD for further comment.

MakeMyTrip Stock Second In Travel Group

MakeMyTrip’s strong run of earnings growth is reflected in its best-possible Earnings Per Share Rating of 99 from IBD. The score indicates shares rank in the leading 1% of all stocks in terms of recent profitability growth. The India company’s stock also has a Composite Rating of 97 out of a best-possible 99. That scores fundamental and technical strength.

Meanwhile, MakeMyTrip stock also has a Relative Strength rating of 98. This means it ranks in the top 2% of all stocks when it comes to 12-month performance.

The stock is second highest-ranked overall in IBD’s Leisure-Travel Booking group, according to IBD Stock Checkup, behind only Booking Holdings.

Shares broke out from a cup base with a buy point of 89.93 with a 4.7% rally on July 9, according to IBD MarketSurge charts, before easing back slightly the next day. The India company’s stock traded lower Thursday as tech stocks took a hit.

The next test for MakeMyTrip stock will be its first-quarter fiscal 2025 earnings. The company is scheduled to release the results July 23.

Analyst polled by FactSet project sales will rise 24% year-over-year to $245 million for the period. Earnings per share are seen rising 50% to 24 cents per share, according to FactSet.

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