On Tuesday, Citi maintained its Buy rating on MakeMyTrip (NASDAQ:MMYT) and increased its price target to $85 from the previous $59. The adjustment reflects a buoyant travel outlook in India, with robust demand noted in both domestic and international air travel, as well as in the hotel sector, particularly outside the budget category.
The firm noted that despite a rise in Average Daily Rates (ADRs), the demand for leisure travel has remained strong, and a demand/supply mismatch is expected to continue in the medium term. The competitive landscape among Online Travel Agencies (OTAs) has not changed, which leads to the expectation that MakeMyTrip will maintain its Advertising & Promotional (A&P) spending at around 5% of Gross Booking (NASDAQ:) Value (GBV) in the near to medium term.
Citi has revised its estimates, now expecting MakeMyTrip’s adjusted EBIT margin estimates for fiscal years 2025 and 2026 to be 1.9% and 2.3% of GBV, respectively, up from the previous 1.9% and 2.1%. These…