MMYT

We rate MakeMyTrip Ltd (MMYT) as a Reduce with a composite score of 42.6/100 at a current price of $56.28. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (82th percentile) and investment (56th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (8th percentile) and stability (30th percentile) tempers our overall conviction. We assign a Narrow Moat rating (63/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

MakeMyTrip Ltd holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.6/100 places it at rank #3185 in our full 7,333-stock universe. With a $10.8B market capitalization, MakeMyTrip Ltd operates at meaningful scale within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 25%, though momentum at the 8th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 56% (+0.5pp vs sector) narrow to operating margins of 12% (-5.3pp vs sector) and net margins of 9.7%, yielding a gross-to-net conversion rate of 18%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $56.28, MakeMyTrip Ltd is trading at a premium to fundamental value. Our value factor score of 38/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 65.8x (a 289% premium to the sector median of 16.9x), EV/EBITDA of 8.6x (at a premium), P/B of 4.4x, P/S of 1.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to MakeMyTrip Ltd. The stock presents a balanced risk profile: below-average price stability (30th percentile) and elevated valuation multiple (P/E 65.8x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: below-average price stability (30th percentile); elevated valuation multiple (P/E 65.8x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 30th percentile and quality factor at the 82th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 56% provide a buffer against cost pressures; conservative leverage (20% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate MakeMyTrip Ltd's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 31.7%, disciplined leverage (20% D/E). Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — MakeMyTrip Ltd meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 20.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, MakeMyTrip Ltd receives a Reduce rating with a composite score of 42.6/100 (rank #3185 of 7,333). Our quantitative framework assigns a Narrow Moat (63/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 43/100.

Our analysis does not support a constructive view on MakeMyTrip Ltd at this time. The combination of the current quantitative profile, medium uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.