Whalesbook
MakeMyTrip Shifts Strategy Amidst Global Travel Woes
MakeMyTrip is strategically repositioning its business to focus more on domestic travel and shorter trip options. This change comes in response to lower demand for international travel, influenced by the conflict in West Asia. The company recently reported a 29.8% decrease in its adjusted net profit for the fourth quarter of fiscal year 2026, with earnings falling to $33.8 million from $48.1 million a year earlier. Revenue for the quarter rose slightly to $250.1 million from $245.5 million in Q4 FY25, showing a 6.7% increase in constant currency. The company achieved a significant milestone, with annual gross bookings surpassing $10 billion, highlighting its scale even in a difficult market.
Resilience Despite Headwinds
Even with fewer international travelers, MakeMyTrip emphasized its business strength and efficient cost management, which helped improve adjusted margins on a constant currency basis. Group CEO Rajesh Magow stated that all major business areas saw double-digit, year-on-year growth in adjusted margins in constant currency. However, the company's quarterly results were impacted by a substantial increase in income tax expenses, which rose to $6 million from $1.7 million in the same period last year. Company executives noted that strong performance in the domestic segment and the corporate business helped offset the challenges in international travel.
Market Standing and Analyst Views
MakeMyTrip operates as a leading online travel aggregator (OTA) in India, competing with companies like Yatra, Cleartrip, Ixigo, and Goibibo. It holds a significant portion of the Indian online travel market, estimated at 53.8% in 2023, and a 30% share of the air travel market. Its strong brand recognition and integrated 'super app' strategy support its position. MakeMyTrip's stock has seen fluctuations, trading between $32.67 and $108.50 in the 52 weeks leading up to May 2026. Analysts largely hold a positive view, with a consensus rating of "Strong Buy" and an average 12-month price target of $101. However, some recent analyst reports have expressed concerns about slowing demand and currency depreciation, leading to adjustments in price targets.
Risks and Valuation Concerns
The company's past reliance on international travel leaves it exposed to geopolitical risks, as shown by the West Asia conflict's impact. Rising oil prices from these tensions can increase airfares and reduce travel demand. MakeMyTrip's price-to-earnings (P/E) ratio, around 80-90 in May 2026, is considered high by some, especially compared to historical averages. While a high P/E can suggest expectations for future growth, it also carries risk if earnings don't meet targets. Concerns about the company's balance sheet and potential disruption from AI have also been noted. Past geopolitical events, including incidents in April 2025 and June 2025, previously affected travel demand and MakeMyTrip's share price.
Outlook on Domestic Growth
MakeMyTrip's increased focus on the domestic market aligns with India's growing tourism sector, where domestic travel is becoming a key driver. Indian tourists reportedly account for about 84% of total tourism spending, helping to buffer the impact of reduced international travel. The company's gross bookings of $10.4 billion for FY2026 and its strong position in the domestic market suggest ongoing growth potential. MakeMyTrip's diversified offerings, including its bus ticketing business, also contribute to its stability. The company is scheduled to release its fiscal 2026 fourth quarter and full year financial results on May 19, 2026, with analysts forecasting an Earnings Per Share (EPS) of $0.32.