MakeMyTrip(MMYT) Seeking Alpha·2024-07-30 03:18Investment Overview - MMYT is an online travel agency primarily operating in India, contributing 95% of FY24 revenue, with air tickets at 39%, hotels & packages at 43%, and other revenue at 18% [1] - MMYT holds a dominant market position in India with a 60% market share [1] Growth Trends - Domestic travel demand is strong, and international tourism is expected to follow suit as the population becomes wealthier, with MMYT reporting outbound travel growth exceeding domestic travel growth [2] - MMYT's gross bookings increased by 17% year-over-year to 244 million [5] - The air segment is anticipated to see growth acceleration due to improved domestic supply, completion of elections, and easing weather conditions [5] Financial Performance - MMYT's international hotels & packages segment saw an impressive revenue growth of 88% in 1Q25, significantly outpacing overall segment growth [12] - The company achieved a cash EBITDA margin of 17.6% in 1Q25, marking an all-time high since profitability began in 2Q22 [13] - Management expects adjusted EBIT margin to reach 1.8% to 2% over the medium term, with a historical trend of margin expansion observed [13] Market Position and Valuation - MMYT is projected to maintain strong revenue growth at 25% for FY25 and FY26, outperforming peers like Booking Holdings and Expedia Group [8] - The company trades at a premium valuation of 9.2x forward revenue compared to the peer average of 4.2x, justified by its growth performance and market dominance [8] Conclusion - The long-term growth outlook for MMYT is robust, supported by a strong domestic travel industry and increasing international travel demand [10] - The expected target price for MMYT is set at $111, reflecting confidence in its growth trajectory [14]