MakeMyTrip (NASDAQ:MMYT)
MakeMyTrip (NASDAQ:MMYT) was raised from Neutral to Buy by Bank of America. According to analyst Sachin Salgaonkar, the Indian online travel agency is in a good position to reconcile revenue growth with margin expansion as the economy picks up.
“Along with revenue growth, we believe MMYT is well positioned to demonstrate improved margins as a result of lower fixed costs due to Covid and as operational leverage is realized. According to our projections, revenue would expand by 58% CAGR from FY22 to FY25, and the EBITDA margin will increase from 1% to 12% “He stated.
However, the research firm also noted that the second quarter is anticipated to exhibit seasonal weakness, which is likely to lead to a decline in Makemytrip’s revenue and EBITDA from quarter to quarter. The festive demand in October and the holidays in November and December are two important catalysts to watch out for.
Salgaonkar asserted that the price is fair, citing the fact that “MMYT is selling at FY23E P/S of 4.1X – generally in line with global peers and cheaper than its Indian counterpart, EaseMyTrip.”
Based on a projected cash flow model that incorporates a 13–17% rise in FY23–25 EBITDA expectations, BofA set a new price objective for MakeMyTrip (MMYT) of $40. MMYT’s 52-week high is $36.28.
MakeMyTrip (MMYT) stock is up 1.5% on Tuesday, trading at $33.06. Shares have increased 27% over the last year.
Q2 results
Compared to the previous reported quarter, the company’s greatest quarterly adjusted operating profit was over $16.5 million. Following the third wave of Covid-19 infections in India, the firm reported a remarkable Q/Q gain of 63.3 percent in gross bookings ($1.6 billion) on a constant currency basis, showing a solid recovery in travel mood and demand.
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