Citigroup has reiterated its “buy” recommendation for MakeMyTrip (MMYT), one of India’s leading online travel companies. The reaffirmation comes after Citigroup analysts conducted a detailed analysis of the company’s financials and market position.
MakeMyTrip, founded in 2000, provides various travel-related services such as flight bookings, hotel reservations, and holiday packages. It operates through multiple platforms, including websites, mobile apps, and a call center. The company has established a strong presence in the Indian travel market, which is expected to grow significantly in the coming years. According to Citigroup, MakeMyTrip holds approximately 50% of the online travel market share in India.
The analysts highlight several factors that contribute to their positive outlook on MakeMyTrip. Firstly, they believe that the company’s diverse product mix and wide range of offerings give it a competitive advantage. MakeMyTrip has partnerships with various airlines and hotels, allowing it to offer customers a comprehensive range of options and competitive prices.
Additionally, MakeMyTrip’s strong brand recognition and marketing initiatives have helped it build a loyal customer base. The company’s efforts to enhance customer experience through user-friendly interfaces and personalized recommendations have also been beneficial in retaining customers. Citigroup analysts view this as a crucial aspect of MakeMyTrip’s long-term success.
Furthermore, MakeMyTrip has demonstrated solid revenue growth over the past few years, with total revenues increasing by 15% in the latest financial year. The analysts note that the company has successfully capitalized on the growing travel demand in India, driven by the country’s rising disposable income and increasing uptake of online services. They expect this trend to continue, thereby boosting MakeMyTrip’s financial performance.
Citigroup also acknowledges the challenges faced by MakeMyTrip, such as competition from both domestic and international players and the dependence on volatile factors such as oil prices and currency exchange rates. However, they believe that the company’s strong market position and continued investment in technology and customer service will help it navigate these challenges effectively.
Looking ahead, Citigroup sees several growth drivers for MakeMyTrip. The analysts anticipate an increased penetration of the online travel market in India, driven by rising internet usage and smartphone adoption. MakeMyTrip is well-positioned to capitalize on this growth, given its robust infrastructure and technological capabilities.
Moreover, the analysts highlight MakeMyTrip’s strategic initiatives to diversify its revenue streams. The company has been expanding its presence in alternative accommodation services, such as homestays and vacation rentals, through its brand Goibibo. Citigroup sees this as a promising opportunity, as the demand for alternative accommodations is on the rise globally.
Additionally, MakeMyTrip’s international businesses, such as its investments in the Middle East-based Cleartrip and the European hotel booking platform Swoodoo, offer further potential for growth. These strategic partnerships enable MakeMyTrip to tap into new markets and expand its customer base beyond India.
In conclusion, Citigroup maintains its “buy” rating for MakeMyTrip based on its strong market position, diverse product mix, and growth prospects in the Indian travel industry. The analysts believe that MakeMyTrip’s continued investments in technology, customer service, and strategic partnerships will support its long-term success. However, they caution investors about the potential risks associated with competition and external factors impacting the travel industry.