MakeMyTrip Ltd (MMYT)

By both methods, the value today (DCF $43 · Multiples $41) is below the market price ($47).

Today — expensive, no margin of safety: at $47 trades ~13.7% above its value discounted to today (~$41); the expected return does not even reach the risk-free rate (4.5%).

At 5 years — Preserva valor: the target price ($51) plus dividends yield just enough to preserve nominal capital, below the required 4% floor.

The bridge: the return at 5 years falls below the risk-free rate (4.5%) — which is why there is not even a discount to today's value. To require a 15% annual return, it would need to be bought at ~$26.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($47) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The price discounts growth (12.0%/year) above our base case (10.0%/year) → it is priced for a demanding scenario and leaves little cushion against a slowdown.

That growth implies ~$0.2 bn of owner earnings in year 5 (vs ~$0.2 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on EV/EBIT. In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Year 0 is the fiscal year ended March 31, 2026 (annual foreign filer, 20-F): MakeMyTrip publishes its quarters via 6-K without XBRL, so there is no tagged quarter from which to derive a TTM, and the convention is that of the annual filer. Depreciation and amortization in the XBRL core was abandoned in the fiscal year ended March 31, 2021; the D&A levels ($27,267 thousand in fiscal 2024, $27,122 thousand in fiscal 2025 and $27,846 thousand in fiscal 2026) were taken from the consolidated income statement of the 20-F itself (Note 15), not from the stale tag. The effective tax rate for fiscal 2026 was 34.06% (tax of $26,696 thousand on pre-tax income of $78,366 thousand, Note 17 of the 20-F) — a figure that carries volatile tax benefits and charges from year to year (17.8% in fiscal 2025 and a net benefit in fiscal 2024); for the projection it is normalized to 30%, more representative of the group's long-term tax burden. The most relevant event of the period is financial, not operating: on July 2, 2025 the company repurchased and cancelled the 34,372,221 Class B shares that Trip.com (Ctrip) held in its capital, for $3,038.8M funded with $1,656.0M of new ordinary shares and $1,437.5M of 2030 senior convertible notes, which multiplied total debt sixfold (from $236M to $1,406M) and drove financing costs from $32.2M to $104.8M in one year, depressing net income even as operating income (EBIT) kept growing. Revenue growth reported in dollars (6.7% in fiscal 2026 and 6.2% in the first quarter of fiscal 2027) is depressed by the depreciation of the Indian rupee against the dollar (more than 10% year over year in the quarter ended June 2026); at constant currency growth was 10.7% and 16.1% respectively. The base starts from a midpoint between both readings. Open-market buybacks are marginal ($91.7M in the fiscal year, 1,450,000 shares; $7.8M in the quarter ended June 2026) and do not reach the materiality threshold, so a share count path is not modeled. The cascade carries the real buyback of the trailing twelve months, $3,130.5M (the Trip.com deal plus open-market purchases), so retention is zero and the model does not accumulate cash: future cash flow —foreseeably earmarked for servicing the convertible debt— is not credited and stands as upside margin.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (EV falls as cash increases). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $51 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $47, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $51 in 5 years and a required return of 4.5% annually, the maximum to pay today is $41. Against the current market price ($47), the margin of safety is -13.7% (trades above the maximum → a premium is paid) and the total return at that price would be 1.9% annually.

• Rich entry multiple. Roughly 37-39× EV/EBIT on trailing twelve months, elevated for the current growth rate.
• 52% drawdown from the high. Substantial discount, but partly explained by the real deterioration in net income, not solely by market perception.
• Modest base-case return. The base case delivers a low-single-digit CAGR, insufficient to qualify as a high-margin-of-safety opportunity.
• Attractive favorable scenario. If constant-currency growth passes through to reported revenue and margin keeps expanding, the favorable scenario's return exceeds the 10% bar.
• No dividend. Pays no dividend; the entire return depends on business appreciation and resolution of the new debt burden.

Each margin over sales, year by year: historical (solid line) → projection (dotted).

• ✓ ROIC exceeds the cost of capital (~10%)
• ✓ CFROIC backs up the ROIC (128%, cash vs. accruals)
• ✕ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• Return on capital just above the bar. ROIC of roughly 11.3%, in the "good" band (10-15%) but not exceptional.
• Healthy cash generation. Free cash flow of US$178 million in fiscal year 2026, growing despite the accounting hit to net income.
• Slightly negative operating working capital. The business is partly funded by commission float, a trait typical of a travel marketplace.
• Invested capital inflated by new debt. Invested capital now includes US$1,406 million of debt taken on for the Trip.com buyback, raising the ROIC denominator.
• Acquisition intangibles weigh on the balance sheet. US$552 million of intangible assets and goodwill, with recurring amortization that reduces reported EBIT.
• Mixed revenue recognition (net and gross). The business recognizes net revenue in most lines and gross revenue in packages and car rentals, which can distort margin comparisons across segments.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

The business breaks down into Gross Bookings by commission margin/take rate (Adjusted Margin) in each segment. In air ticketing and standalone hotels, volume grows solidly but the take rate is thin (air ticketing Adjusted Margin of just 6.4% of gross bookings); in hotels and packages the take rate is higher (18.0%) and has been expanding; in buses, the fastest-growing segment by percentage, the take rate holds steady at 10.3%. Reported dollar growth across all segments is depressed by the rupee's depreciation against the dollar, which exceeded 10% year over year in the quarter ended June 2026.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (31-mar-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Double-digit volume growth. Hotel nights +17.6% and bus tickets +32.9% year over year in fiscal year 2026.
• Reported growth depressed by FX. 6.7% reported versus 10.7% at constant currency in fiscal year 2026; the gap widened to 6.2% versus 16.1% in the most recent quarter.
• Air tickets stagnant. Just +3.3% at constant currency in fiscal year 2026, weighed down by regulatory restrictions and a supplier's exit from the market.
• "Other" segment accelerating. +35.0% at constant currency, driven by ancillary services such as foreign exchange and visas.
• India's online travel TAM still underpenetrated. India's online travel market has lower digital penetration than developed markets, leaving structural growth runway.

• Market leadership in three categories. Roughly 3 in 10 domestic air passengers in India book through the platform, per the DGCA.
• Asset-light model with minimal capex. Fiscal year 2026 capex of just US$4.5 million on US$1,044 million of revenue.
• Measurable retention and cross-sell. 78.4% transaction repeat rate and 50.9% cross-sell between hotels and other lines.
• Dependence on an airline duopoly. India's two largest airlines account for most domestic share and hold bargaining power over commissions.
• Disruption risk from AI agents. The filing itself warns that automated shopping agents could reduce direct traffic to the platform.
• Booking volume growing strongly. Hotel nights +17.6% and bus tickets +32.9% year over year in fiscal year 2026.
• History of goodwill impairments. Impairments of US$14.6 million (2017) and US$272.2 million (2020) show the risk of overpaying in acquisitions has already materialized.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Only ~100% is structural debt (bonds, well spaced out); the rest is operating funding matched with the loan book — it does not need refinancing. Net cash covers the structural portion.

• ✕Leverage (net debt / EBITDA)Net debt / EBITDA 3.4x
• ✕Interest coverage (EBIT / interest)1.5x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 128% of ROIC
• !Value creation (ROIC − 10% bar)+2pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.2x — no over-investment
• ✓Float / working capitalFrees up cash $0 bn (float / negative WC)
• –Dilution (SBC % of revenue + shares)no data

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Negative attributable equity. -US$67.8 million at fiscal year 2026 close, following the debt-financed buyback from the common.
• Debt multiplied sixfold in a year. From US$236 million to US$1,406 million, mainly 2028 and 2030 convertible notes.
• Solid liquidity. US$425 million in cash and equivalents plus US$358 million in term deposits at fiscal year 2026 close.
• Elevated financial costs. US$104.8 million in fiscal year 2026 versus US$32.2 million the prior year, absorbing a substantial share of EBIT.

• Continuity of founding leadership. Deep Kalra (founder, Chairman and Chief Mentor) and Rajesh Magow (CEO) have run the business through multiple industry cycles.
• Buyback financed with debt, not with cash on hand. The purchase of Trip.com's stake ($3,038.8M) was financed with $1,437.5M of convertible notes and $1,656.0M of new shares instead of available cash, an aggressive capital allocation bet.
• Modest share buyback program. Only US$7.8 million executed in the quarter ended June 2026 out of a program of up to US$200 million.
• History of serial acquisitions. Growth via acquisitions (Goibibo, redBus, BookMyForex, Happay, Atlys) with two material goodwill impairments in the past.
• Transparent results communication. Detailed reconciliations between IFRS and non-IFRS measures in every quarterly release.

• Motivated sellers: net income collapsed 45.6% in two years from the jump in financial costs on the convertible notes issued to fund the Trip.com stake buyback — a non-operating financing event that punishes the accounting result without damaging the underlying intermediation business
• Missing buyers: it trades as a foreign stock with more limited analyst coverage than its developed-market peers, and the market tends to penalize exposure to the rupee's depreciation without distinguishing the currency effect from real constant-currency growth
• Short-term regulatory noise: DGCA operational restrictions on domestic aviation in December 2025 and Go First's market exit depressed the flight segments without reflecting a structural deterioration of the business

The 52% drawdown from the 52-week high is better explained by the real accounting deterioration in net income — the product of a financing decision, not an operational stumble — than by a clear gap between perception and reality. The base case delivers a modest return: it is not clear the stock is cheap, only that it trades at a price that reflects a healthy business now loaded with new debt.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at -19%/year (-65% total): the margin of safety protects the downside. The bull (+11%/year, +71% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Dependence on an airline duopoly. Non-exclusive agreements terminable with 30 to 90 days' notice; airlines can cut commissions unilaterally.
• Disruption from AI-based shopping agents. Structural risk acknowledged by the filing itself regarding the intermediation model.
• Unhedged currency exposure. A 10% appreciation of the dollar against the rupee would have reduced fiscal year 2026 income by US$22.6 million; there are no hedging arrangements.
• Geopolitical risks and exogenous shocks. The Pahalgam terrorist attack (April 2025) and the West Asia conflict (since February 2026) affected gross bookings in different quarters.
• History of failed acquisition integrations. Material goodwill impairments in 2017 and 2020 show the risk of overpaying has already materialized twice.
• Elevated, recent financial leverage. The convertible debt taken on for the Trip.com buyback introduces a refinancing risk toward 2028 and 2030 that the business did not have before.
• Regulatory concentration in India. DGCA operational restrictions on domestic aviation already affected the flight segments in December 2025.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  A wide moat and ROIC 12% above the 10% bar, but the price sits above value (no margin) → great business, expensive.

• Peter Lynch Growth at a reasonable price (GARP)

  A fast grower growing 10% at a multiple/growth of 3.2 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Earnings yield 3% (EBIT/EV) + ROIC 12% → falls outside the Magic Formula.

• Howard Marks Perception vs reality + cycle

  The price discounts 12%, in line with our 10%: perception and reality aligned.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -19%/yr over 5y (material loss) → risk of permanent capital loss.

• Pat Dorsey Moat strength (Five Rules)

  A wide moat, stable; sources: network effects, intangibles, efficient scale, cost advantage, switching costs → passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  The price implies 12% vs our 10%: coherent, but at the optimistic end of the range.