- Recently, MakeMyTrip transitioned from losses five years ago to earning a 10% return on capital employed, reflecting a shift to profitability and expansion, supported by a 47% increase in capital employed.
- However, while growth and reinvestment are evident, the company's heightened use of current liabilities to fund operations may introduce new risks for investors.
- We'll explore how MakeMyTrip's improving returns on capital and ongoing expansion could reshape the company's long-term investment outlook.
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MakeMyTrip Investment Narrative Recap
To be invested in MakeMyTrip today, you have to believe that the company’s profitable turnaround and reinvestment-driven growth will outpace both local and global rivals, all while ongoing expansion supports higher returns on capital. This recent improvement in profitability is encouraging, but it hasn’t materially altered the key short-term catalyst, the company’s ability to convert rising digital adoption into sustained booking growth, or the core risk of aggressive competition further tightening margins.
One of the most relevant recent developments is MakeMyTrip’s launch of its GenAI Trip Planning Assistant, leveraging cutting-edge technology to enhance personalization and accessibility for Indian travelers. This advancement aligns with the short-term catalyst by making the platform more attractive and sticky in a market where customer loyalty and ease of use can quickly shift market share.
However, beneath this positive momentum, investors should also be aware that heightened use of current liabilities in funding expansion could leave MakeMyTrip increasingly exposed if...
Read the full narrative on MakeMyTrip (it's free!)
MakeMyTrip's narrative projects $1.8 billion revenue and $290.6 million earnings by 2028. This requires 22.2% yearly revenue growth and a $190.6 million earnings increase from $100.0 million today.
Uncover how MakeMyTrip's forecasts yield a $120.11 fair value, a 16% upside to its current price.
Exploring Other Perspectives
Fair value estimates from the Simply Wall St Community range from US$36.55 to US$180,922.76 across 3 analyses. While some see significant upside, sustained margin pressure from fierce competition remains a broader concern worth exploring in depth.
Explore 3 other fair value estimates on MakeMyTrip - why the stock might be worth less than half the current price!
Build Your Own MakeMyTrip Narrative
Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your MakeMyTrip research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
- Our free MakeMyTrip research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate MakeMyTrip's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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