Executive Summary / Key Takeaways

• MakeMyTrip Limited ($MMYT) is strategically positioned to capitalize on India's booming travel and tourism market, driven by rising disposable incomes, significant infrastructure development, and a fundamental shift in consumer behavior towards experiential travel.
• The company's diversified business model and robust technological differentiation, particularly its GenAI-powered platforms like Myra, are enhancing customer experience, driving operational efficiencies, and solidifying its competitive moat against both local and global rivals.
• Despite recent macro headwinds impacting domestic leisure travel, MMYT demonstrated strong resilience in Q1 Fiscal Year 2026, achieving an adjusted operating profit of $47.3 million (21% YoY growth) and expanding its international business to 27% of overall revenue.
• Management projects sustained growth in the "high teens to 20s" for the fiscal year, targeting an adjusted operating profit margin of 1.8% to 2% of gross bookings, underpinned by ongoing investments in organic growth, strategic acquisitions, and opportunistic share repurchases.
• MMYT's strong liquidity, with over $800 million in cash and cash equivalents, and a disciplined capital allocation strategy, including a significant share repurchase program, underscore its financial health and commitment to shareholder value.

India's Travel Boom and MakeMyTrip's Strategic Foundation

MakeMyTrip Limited, established in 2000, has evolved into a cornerstone of India's rapidly expanding travel and tourism sector. The company's foundational mission to democratize travel for Indian consumers has propelled it to a leading position, offering a comprehensive "one-stop shop" for diverse travel needs. This journey has spanned 25 years, during which MMYT has demonstrated remarkable resilience, successfully navigating various global and regional disruptions, from the dot-com bust to the COVID-19 pandemic. This enduring adaptability has been a hallmark of its strategic evolution.

The Indian travel market is experiencing a profound structural shift, presenting a significant tailwind for MMYT. Rising disposable incomes, coupled with substantial government investments in travel infrastructure—including roads, railways, and airports—are making point-to-point travel increasingly seamless and accessible. Indian consumers are increasingly prioritizing experiential travel, opting for multiple holidays and short breaks throughout the year. This behavioral change, alongside a burgeoning younger generation (25-34 age group) eager to explore, fuels robust domestic demand. Furthermore, international outbound travel from India is a burgeoning opportunity; 15 million Indians traveled abroad in the first half of 2024, a 14% year-on-year increase, with projections suggesting India will become the world's fifth-largest outbound travel market by 2027. The number of valid Indian passports has nearly doubled in a decade to 93 million, underscoring this trend. India's GDP growth, projected at a steady 6.7% annually for the next two fiscal years, further reinforces a positive economic outlook that directly benefits the travel sector.

Technological Edge: Powering Personalized Travel with GenAI

At the heart of MakeMyTrip's strategic differentiation lies its advanced technological framework, particularly its pioneering adoption of Generative AI (GenAI). The company's product strategy is deeply rooted in consumer insights and leverages cutting-edge technology to transform the booking experience. MMYT's core differentiated technology centers on its comprehensive knowledge graph, which integrates vast amounts of hotel data, reviews, images, location insights, and user intent. This robust backend powers natural language search and contextual recommendations, enabling a highly personalized and intuitive user experience.

The tangible benefits of this technology are already evident. The Myra.ai trip planning chatbot, a key GenAI initiative, has evolved into a powerful interface capable of orchestrating seamless interactions across specialized AI bots for flights, hotels, ground transport, and destination discovery. This unified interface allows users to plan trips with intelligent prompts and resolve post-sales queries, significantly enhancing the customer journey. For instance, the GenAI-based bot on the redBus app has led to improved customer satisfaction scores and an almost 45% decrease in customer service agent involvement for pre-journey queries, demonstrating clear productivity gains.

MMYT's R&D initiatives extend to several GenAI-powered features, including review summaries for faster decision-making, GenAI search that understands natural language queries, smart collections for curated travel options, and an assist mode in flights for common questions about baggage, cancellations, and refunds. The company is also developing AI-driven support for booking changes and other post-booking queries. The stated goal of these developments is to make trip discovery and booking simpler, smarter, and more enjoyable, while unlocking more personalized and relevant results for customers as the knowledge graph evolves. These technological advancements contribute significantly to MMYT's competitive moat, driving higher customer engagement, potentially better conversion rates, and lower operational costs, thereby bolstering its financial performance and market positioning.

Competitive Landscape and Strategic Positioning

MakeMyTrip operates in a dynamic competitive environment, where its localized strategy and technological prowess provide a distinct edge. In the Indian online travel agency (OTA) segment, MMYT holds a dominant position. For domestic air travel, the company maintains a strong leading market share of over 30%, which it marginally increased from 30.6% to 30.8% in Q1 FY26. This leadership is a testament to its focus on customer experience and continuous innovation.

Against global OTA giants like Expedia Group (EXPE) and Booking Holdings (BKNG), MMYT differentiates itself through its deep understanding of the Indian market and its tailored offerings. While global players often focus on a broader international footprint and advanced data analytics, MMYT emphasizes culturally relevant features, such as dining-related content for hotel selection (covering over 21,000 properties) and enriched content for wildlife tourism (for over 2,000 properties). This localized approach, combined with an integrated ecosystem for comprehensive travel planning, allows MMYT to offer a more efficient and relevant experience for Indian travelers. MMYT's strategy to expand its international hotel supply through direct contracting, adding over 2,000 hotels across 50 cities in 20 countries in the past year, further strengthens its position against global competitors.

Compared to Trip.com Group , another strong player in Asia, MMYT's emphasis on Indian-centric services and a wider range of domestic transport options, including bus and rail, provides a broader appeal. MMYT's multi-channel distribution strategy, including its myBiz and Quest2Travel corporate platforms, also gives it an edge in market penetration. While Trip.com Group may lead in certain advanced tech features or global reach, MMYT's adaptability to emerging markets and its focus on affordability and accessibility are key differentiators.

Domestically, MMYT competes with players like Yatra Online (YTRA). However, MMYT's broader platform integration, encompassing bus and rail, offers a more comprehensive solution, leading to a more seamless user experience. MMYT's management explicitly states that they are "not losing sleep over competition," instead focusing on their "own business strategy and execution roadmap". This reflects confidence in their ability to gain a "meaningful share of most of our suppliers" and capture the "lion's share" of the expanding market.

Indirect competition comes from direct booking platforms of airlines and hotels. However, MMYT's value proposition, including its industry-first features like zero cancellation products, streamlined airport transfers, and value bundles for international flights, helps retain customers. The non-trivial post-sales service costs in the aviation world also make direct bookings challenging for many suppliers, where MMYT's established capabilities provide a significant advantage.

Financial Performance: Resilience Amidst Growth

MakeMyTrip has consistently delivered robust financial performance, reflecting its strategic effectiveness and operational agility. Fiscal Year 2025 was a landmark year, with gross booking value (GBV) reaching $9.8 billion, a significant 25.9% year-on-year growth in constant currency. The adjusted operating profit for FY25 hit an all-time high of $167.3 million, growing 34.7% year-on-year. The adjusted operating profit margin for FY25 improved to 1.71% of gross bookings, up from 1.56% in FY24.

In the first quarter of Fiscal Year 2026, MMYT demonstrated remarkable resilience despite facing "exceptional macro headwinds" such as regional escalations and an airplane crash that impacted domestic leisure travel. The company's diversified portfolio allowed it to leverage other segments, resulting in an adjusted operating profit of $47.3 million, a 21% year-on-year growth. Revenue as per IFRS grew by 7.8% year-on-year in constant currency to $268.8 million.

Segment-wise, the international business has been a significant growth driver. In Q1 FY26, international air ticketing revenue surged over 27% year-on-year, outpacing industry growth, with volumes growing almost three times the market rate at over 21% year-on-year. International hotels revenue also saw robust growth of over 45% year-on-year. Consequently, the international business now contributes 27% to the overall revenue, up from 24% in the same period last year. The mix of international air ticketing revenue reached an all-time high of 42%, and international in hotels and packages revenue reached 25.2%.

The hotels and packages business delivered healthy growth, with GBV increasing by 15.3% year-on-year in constant currency for Q1 FY26, and stand-alone hotels growing by 19.4% year-on-year. The bus ticketing business also showed strong momentum, with adjusted margin growing over 34.1% year-on-year in constant currency to $42.6 million. The "Others" category, encompassing ground transport (rail, intercity cabs) and ancillary services (travel insurance, FOREX), was particularly strong, with adjusted margin growing 47.4% year-on-year to $21.5 million. This segment is expected to continue growing in the "30s" in the coming years.

MMYT maintains disciplined cost management, with customer acquisition costs at 5.1% of gross booking value in Q1 FY26, contributing to an expansion of the adjusted operating margin to 1.8% of GBV.

The company ended Q1 FY26 with a strong cash and cash equivalents position of $804 million. A significant capital allocation move involved raising approximately $3.1 billion through a primary offering of shares and convertible notes, with the net proceeds used to repurchase 34.3 million Class B shares, reducing total shares outstanding to 95.4 million. This transaction also resulted in Trip.com Group (TCOM) becoming the largest minority shareholder with 16.9% voting shares and a restructuring of MMYT's Board.

Outlook and Guidance: Sustained Growth Trajectory

MakeMyTrip's management remains optimistic about the long-term growth prospects of the Indian travel sector and is committed to delivering sustained value. The company targets an overall growth rate in the "high teens to 20s" for the fiscal year, with an adjusted operating profit margin goal of 1.8% to 2% of gross bookings on a full-year basis. This growth trajectory is expected to be sustained for the next few years, as management views recent market disruptions as "short term in nature" that do not materially alter the long-term potential of the Indian travel and tourism market.

The outlook is underpinned by several key assumptions: the continued rise in disposable incomes, ongoing infrastructure upgrades, and the fundamental shift in consumer behavior towards prioritizing experiential travel. Management anticipates a recovery in domestic air capacity and sustained strong growth in international outbound travel, driven by improved air connectivity and simplified visa processes. The company's diversified business portfolio and operational agility are expected to continue enabling growth across various segments, including corporate travel and international offerings, even when domestic leisure demand faces headwinds.

MMYT's technological roadmap, particularly its GenAI initiatives, is central to its future growth. The continuous enhancement of the Myra chatbot and other AI-powered features is expected to drive better conversion rates and further operational efficiencies. The company's capital allocation strategy prioritizes organic growth investments, selective niche inorganic opportunities (such as the acquisition of Happay Expense Management Platform), and opportunistic share repurchase programs, leveraging its substantial cash reserves. An India listing is considered a "midterm opportunity" linked to future fundraising plans.

Risks and Challenges

Despite a compelling growth narrative, MakeMyTrip faces several risks and challenges. Macroeconomic headwinds, such as geopolitical escalations, unforeseen incidents like airplane crashes, or even unusual weather patterns (e.g., heavy rainfall), can temporarily impact travel demand, particularly for domestic leisure segments. Supply-side issues in the domestic air market, such as temporary grounding of planes for safety checks, can also constrain growth.

While MMYT's diversified portfolio helps mitigate some of these impacts by allowing it to pivot to other segments like corporate or international travel, prolonged or severe disruptions could affect financial performance. The online travel industry is also subject to intense competition, requiring continuous investment in technology and customer experience to maintain market share against both global and local players, as well as direct booking channels from airlines and hotels. Furthermore, the company's reliance on third-party suppliers for inventory and services introduces dependencies that could impact operational costs and service delivery.

Conclusion

MakeMyTrip Limited stands as a compelling investment opportunity, deeply embedded in the secular growth story of India's travel and tourism market. Its 25-year journey has forged a resilient and adaptable enterprise, now poised to capitalize on a confluence of favorable macroeconomic trends and evolving consumer preferences. The core investment thesis for MMYT is firmly rooted in its ability to leverage its market leadership, diversified business model, and cutting-edge technological differentiation—particularly its GenAI-powered platforms—to drive sustained, profitable growth.

The company's recent financial performance, marked by robust revenue and adjusted operating profit growth, even amidst temporary market disruptions, underscores its operational strength. MMYT's strategic focus on enhancing customer experience through innovation, expanding its supply base, and prudently allocating capital positions it favorably against a competitive backdrop. While macroeconomic shifts and competitive pressures remain inherent risks, MakeMyTrip's technological leadership and deep understanding of the Indian traveler provide a formidable competitive advantage, suggesting a clear runway for continued expansion and value creation for investors.