Regulatory allegations put MakeMyTrip in the spotlight
Morpheus Research has released a report raising concerns about MakeMyTrip (MMYT). The report highlights allegations of anti-competitive practices, undisclosed regulatory investigations in India, and claims that the company is obscuring weakening financial performance.
See our latest analysis for MakeMyTrip.
The Morpheus Research allegations arrive after a sharp reset in sentiment, with MakeMyTrip’s share price at US$39.84 and a 1 year total shareholder return of a 54.27% loss, despite a 66.97% gain over three years. This suggests that recent momentum has faded as regulatory concerns come into focus.
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So with MakeMyTrip shares down sharply over 1 year but still ahead over 3 and 5 years, and with fresh regulatory questions in play, is this weakness a potential entry point, or is the market already pricing in future growth?
Most Popular Narrative: 60.9% Undervalued
Against a last close of $39.84, the most followed narrative anchors on a fair value of $101.90, built on detailed growth and profitability assumptions.
Ongoing investment in product innovation, particularly in AI-powered personalization and user experience improvements, positions MakeMyTrip for higher conversion rates, better customer retention, and ultimately supports expanding net margins through improved operating leverage.
Curious what has to happen for that valuation gap to close? The growth story leans on faster revenue, stronger margins, and a rich future earnings multiple.
The narrative uses a discount rate of 12.35% and builds in faster expected growth in both revenue and earnings than the broader US market, alongside higher profitability than today. It also assumes a material reduction in share count, which increases the value attributed to each remaining share if those assumptions hold.
On top of that, the analysts behind this narrative are treating MakeMyTrip as a business that can support a P/E multiple well above the current US Hospitality average, supported by expansion in higher margin segments and ongoing adoption of its platform. The result is a fair value that sits well above the recent share price and implies a significant valuation gap based on these inputs.
Result: Fair Value of $101.90 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there is still a real risk that higher customer acquisition costs or tougher competition from global and local rivals could pressure margins and reset expectations.
Find out about the key risks to this MakeMyTrip narrative.
Another way to look at valuation
The narrative leans on discounted future earnings and cash flows, but the simple P/E check tells a tougher story. MakeMyTrip trades on a P/E of 66.6x, versus a fair ratio of 52.7x and a peer average of 24.9x, which points to rich expectations built into today’s price.
That kind of premium can either signal confidence in the growth outlook or leave you with less room for error if the story slips. The key question is whether you think the business can keep justifying such a wide gap to both its fair ratio and sector peers, or if the market could eventually push the multiple closer to those benchmarks.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment clearly split between concern and optimism, it makes sense to look at the underlying data yourself and decide where you stand. To round out your view before you act, take a close look at the 2 key rewards and 3 important warning signs
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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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