Executive Summary / Key Takeaways

• Dominant Market Position & Robust Growth: MakeMyTrip Limited ($MMYT) stands as a formidable leader in India's burgeoning travel sector, consistently outpacing industry growth with a diversified portfolio and strong execution, evidenced by a record $9.8 billion Gross Booking Value in FY25 and a commitment to high teens to 20s growth for FY26.
• Technological Edge with GenAI: The company's strategic investment in Generative AI, particularly its Myra.ai chatbot and comprehensive knowledge graph, is a core differentiator, enhancing customer experience, driving personalization, and yielding significant operational efficiencies, including a 45% decrease in customer service agent involvement in certain areas.
• Strategic Diversification & International Expansion: MMYT's "one-stop shop" approach, coupled with aggressive expansion in international outbound travel (now 27% of Q1 FY26 revenue) and penetration into Tier 2 and Tier 3 Indian cities, provides resilience against domestic market fluctuations and taps into vast under-penetrated segments.
• Strong Financial Health & Shareholder Returns: Despite temporary macro headwinds, MMYT reported a 21% year-on-year growth in adjusted operating profit for Q1 FY26, expanding its adjusted operating margin to 1.8% of gross bookings. A robust cash position of $804 million and an opportunistic share repurchase program underscore its commitment to shareholder value.
• Favorable Macro Tailwinds & Outlook: India's rising disposable incomes, significant infrastructure upgrades, and a fundamental shift in consumer behavior towards experiential travel are powerful long-term drivers, with management guiding for continued strong growth and margin expansion, viewing recent disruptions as short-term in nature.

The Unfolding Journey: MakeMyTrip's Command in India's Travel Ascent

MakeMyTrip Limited, established in 2000, has evolved into India's premier online travel agency, embodying a mission to democratize travel through accessibility, convenience, and transparency. Over its 25-year history, the company has demonstrated remarkable resilience, navigating various macro disruptions from global economic shifts to pandemics, consistently emerging stronger. This journey has forged a "one-stop shop" strategy, offering a comprehensive suite of travel services that cater to the diverse and rapidly expanding Indian consumer base.

The Indian travel and tourism market is experiencing a structural boom, propelled by several powerful macro trends. Rising disposable incomes are fueling a fundamental shift in consumer behavior, with Indians increasingly prioritizing experiential travel and taking multiple short breaks throughout the year. Infrastructure upgrades, including advancements in roads, railways, and airports, are enhancing connectivity and making travel more seamless across the country. Furthermore, India's digital economy is among the fastest-growing globally, with government initiatives significantly boosting internet and e-commerce penetration. These factors collectively create a fertile ground for sustained growth, positioning MMYT to capitalize on a market poised for long-term expansion.

The Technological Moat: GenAI at the Core of Customer Experience

At the heart of MakeMyTrip's strategic differentiation lies its profound investment in cutting-edge technology, particularly Generative AI (GenAI). The company's GenAI strategy is not merely about adopting buzzwords; it is about leveraging its vast proprietary data—amassed from 83 million transacted consumers—to build differentiated models that enhance every facet of the travel journey. This technological prowess is a foundational strength, creating a significant competitive moat.

MMYT's Myra.ai chatbot, initially launched for international flights, has evolved into a powerful interface built on a genetic framework. Myra.ai orchestrates seamless interactions across specialized AI bots for flights, hotels, ground transport, and destination discovery. This enables natural language search and contextual recommendations, transforming the trip planning and booking experience. For instance, in the hotel segment, Myra.ai provides real-time pricing, availability, and personalized recommendations by integrating hotel data, reviews, images, location insights, and user intent. The company also introduced GenAI-powered features like review summaries for faster decision-making, smart collections based on user themes, and an assist mode for common flight queries.

The tangible benefits of this technological edge are already evident. In the redBus app, a GenAI-based bot for pre-journey queries has led to improved customer satisfaction scores and a remarkable 45% decrease in customer service agent involvement. This quantifiable efficiency gain directly translates into cost savings and improved operational leverage. For investors, this technological leadership means MMYT is not only enhancing customer loyalty and conversion through superior, personalized experiences but also driving significant productivity gains, which directly contribute to its profitability and market positioning. The company's commitment to continuous R&D in this evolving space, including partnerships with leading model providers, ensures it remains at the forefront of innovation, further solidifying its competitive advantage.

Strategic Pillars: Diversification, Expansion, and Market Leadership

MakeMyTrip's business model is built on a diversified portfolio designed to capture various segments of the travel market. The company operates through three primary segments: Air Ticketing, Hotels and Packages, and Bus Ticketing, complemented by an "Others" category encompassing ground transport and ancillary services.

In Air Ticketing, MMYT maintains a strong market leadership, holding over 30% share in the domestic air segment. Despite operational disruptions impacting domestic demand in Q1 FY26, the company delivered above-market growth, with international air ticketing revenue soaring over 27% year-on-year and volumes growing over 21%—nearly three times the market growth. This outperformance highlights MMYT's ability to gain market share, driven by enhanced customer experience features like a new zero-cancellation product for domestic flights and expanded lounge offerings for international travelers.

The Hotels and Packages segment is a key growth driver. MMYT has aggressively expanded its supply, now offering over 91,000 accommodation options across 2,000+ cities in India. Internationally, the company has added over 2,000 directly contracted hotels across 50 cities in 20 countries in the past year, including a strategic partnership with Premier Inn in the U.K. While domestic leisure travel faced headwinds in Q1 FY26, corporate travel and international outbound bookings delivered strong growth, with international hotels revenue growing over 45% year-on-year. The mix of international revenue in this segment reached an all-time high of 25.2% in Q1 FY26, up from 21% in the prior year. The company's focus on enriching content for dining and wildlife tourism, alongside catering to emerging trends like spiritual tourism and alternative accommodations, further strengthens its offerings.

The Bus Ticketing business continues to demonstrate robust growth, with adjusted margin increasing over 34.1% year-on-year in constant currency in Q1 FY26. This growth is broad-based, with significant traction from pilgrimage and Tier 3 destinations. MMYT has substantially expanded its inventory, with private inventory crossing 44,000 daily schedules and RTC (government) inventory exceeding 40,000 daily schedules, bolstered by the acquisition of Gujarat State Roadways Transport Corporation (GSRTC). The international bus business, particularly in Malaysia where MMYT is a market leader, is also promising, with plans to add adjacent products like ferries and activities.

The "Others" category, which includes rail ticketing, intercity cabs, airport transfers, travel insurance, and FOREX, is witnessing exceptional growth, with its adjusted margin surging by 47.4% year-on-year in constant currency in Q1 FY26. The corporate travel business, through myBiz and Quest2Travel platforms, is also experiencing strong momentum, with active corporate customer counts reaching over 66,500 and 515 large corporates, respectively. The acquisition of Happay Expense Management Platform further solidifies MMYT's position as a comprehensive corporate travel and expense management solution provider.

Financial Performance and Operational Agility

MakeMyTrip's financial performance underscores its operational effectiveness and strategic execution. For fiscal year 2025 (ending March 2025), the company achieved a record Gross Booking Value of $9.8 billion, representing a 25.9% year-on-year growth in constant currency. Adjusted operating profit for FY25 reached an all-time high of $167.3 million, a 34.7% increase year-on-year, with the adjusted operating profit margin improving to 1.71% of gross bookings from 1.56% in FY24.

In Q1 FY26, despite facing macro headwinds, MMYT delivered a 21% year-on-year growth in adjusted operating profit, reaching $47.3 million. Revenue as per IFRS grew by 7.8% year-on-year in constant currency to $268.8 million. The adjusted operating margin further expanded to 1.8% of gross booking value, up from 1.64% in Q1 FY25. This expansion demonstrates the company's disciplined financial management and ability to drive operating leverage even during challenging periods. Customer acquisition costs remained efficient at 5.1% of gross booking value in Q1 FY26, slightly higher due to the exceptional circumstances but still well-managed. The company's post-sales costs in Q3 FY25 increased by only about 7% year-on-year, significantly lower than the 26% increase in bookings and revenue, showcasing the impact of automation and AI on cost efficiencies.

MMYT maintains a robust liquidity position, ending Q1 FY26 with cash and cash equivalents of $804 million. A significant capital raise of approximately $3.1 billion through a primary offering of ordinary shares and convertible notes in Q1 FY26 was strategically utilized for the repurchase and cancellation of 34.3 million Class B shares. This move resulted in Trip.com Group (TCOM) becoming the largest minority shareholder with approximately 16.9% voting shares and a restructuring of the Board, signaling a commitment to optimizing capital structure and enhancing shareholder value.

Competitive Landscape and Strategic Positioning

MakeMyTrip operates in a dynamic and competitive travel market, yet it has consistently demonstrated its ability to maintain and even gain market share. In the domestic air segment, MMYT marginally increased its market share from 30.6% to 30.8% in Q1 FY26, a testament to its strong brand and customer experience. While other online travel agencies (OTAs) may see their rankings fluctuate, MMYT's established leadership in domestic air allows it to grow in line with the market, focusing on sustained long-term share.

In the hotels segment, MMYT faces competition primarily from international players like Booking (BKNG) and Agoda, rather than significant domestic OTA rivals. However, MMYT's strategy is distinctly focused on Indian travelers and the Indian and Middle Eastern markets. This localized approach, combined with direct contracting for international hotels and a deep understanding of Indian consumer preferences (e.g., dining, spiritual tourism), provides a qualitative edge over global platforms that operate with a broader, less tailored playbook. The online penetration for international hotels is estimated between 10% to 15%, and for domestic hotels (including homestays) between 15% to 20%, indicating substantial headroom for MMYT to expand its market share.

Against direct airline bookings, MMYT differentiates itself through a comprehensive offering of features like zero cancellation, flexible date changes, and robust post-sales support, which are non-trivial costs for airlines to manage independently. The company's ability to optimize customer acquisition costs through its diversified channels and strong brand recall also provides a competitive advantage. MMYT's strategic focus on expanding its reach to various customer segments, including corporate clients and travel agents, further diversifies its demand sources and strengthens its overall market position.

Outlook and Growth Trajectory

Management remains optimistic about the long-term growth prospects of the Indian travel sector and is committed to delivering sustained value. For fiscal year 2026, the company is targeting overall growth in the "high teens to 20s," expecting to "dial back growth" in subsequent quarters after the temporary impacts seen in Q1 FY26. The adjusted operating margin is guided to reach the "1.8% to 2% range as a percentage of gross bookings" on a full-year basis, reflecting continued focus on operating cost efficiencies and leverage.

Key assumptions underpinning this outlook include the temporary nature of recent disruptions, such as geopolitical escalations and the passenger airplane crash in Q1 FY26, which are not expected to materially alter the long-term growth trajectory. Management anticipates a recovery in consumer sentiment and air supply issues. Ancillary services are expected to "continue to grow faster and possibly in the [30s], even in the years to come," while package bookings are projected to "come back strongly" by the peak seasonality of Q3. MMYT also expects to benefit from deferred tax assets for at least another year before transitioning to a full tax bracket. The company's capital allocation strategy prioritizes organic growth, niche inorganic opportunities like the Happay acquisition, and opportunistic share repurchases, all supported by its strong cash position.

Risks and Challenges

While the outlook is positive, MakeMyTrip faces certain risks and challenges. Geopolitical events and macroeconomic fluctuations can temporarily impact travel demand, as evidenced by the muted domestic leisure travel in Q1 FY26 due to regional tensions and a tragic airplane crash. Supply-side issues, such as temporary disruptions in air travel due to safety checks, can also affect booking volumes. However, management views these as short-term aberrations that do not fundamentally alter the long-term growth narrative.

Currency fluctuations could also influence international travel, though historically, Indian travelers tend to shift to alternative, more affordable destinations rather than canceling travel plans entirely. The competitive landscape, while currently stable, could intensify, requiring continuous innovation and efficient customer acquisition. Despite these challenges, MMYT's diversified business model, technological leadership, and deep market penetration provide a strong foundation to mitigate these risks.

Conclusion

MakeMyTrip Limited stands as a compelling investment opportunity, firmly entrenched in the high-growth Indian travel market. Its 25-year history of resilience, coupled with a proactive strategy of diversification, aggressive international expansion, and deep penetration into emerging domestic markets, positions it for sustained success. The company's technological leadership, particularly its pioneering use of Generative AI to enhance customer experience and drive operational efficiencies, is a critical competitive advantage, strengthening its moat and contributing directly to its financial performance.

With a clear path to achieving high teens to 20s growth and expanding operating margins, supported by robust financial health and a commitment to shareholder returns, MMYT is well-equipped to capitalize on India's powerful macro tailwinds. While temporary disruptions and competitive dynamics warrant monitoring, MakeMyTrip's strategic vision and relentless execution underscore its potential for long-term value creation for discerning investors.