JPMorgan raises MakeMyTrip stock price target on revenue outlook

JPMorgan raised its MakeMyTrip (MMYT) price target to $65 from $60, keeping an Overweight rating, and projects Q1 FY27 constant-currency revenue growth of 14% YoY (Bus +20%, Hotels +16%, Air +6% amid the Middle East conflict). The note assumes convertible bonds maturing in 2028/2030 won’t convert, reducing share count and lifting EPS by 6% to 18% across FY27–FY29. Separately, MMYT reported Q4’26 EPS of $0.32 vs $0.28 expected, but revenue missed ($250.12M vs $280.95M), with the stock still down 26% over the past six months.

Analysis

MMYT is more of a sentiment/denominator trade than a clean operating inflection. The market is likely underestimating how much of the upside case comes from a lower effective share count, not better cash generation; that matters because EPS can inflect while free cash flow barely changes. If investors start paying for the higher EPS path, the stock can rerate fast, but that leaves it vulnerable if the convertibles remain outstanding and the market stops rewarding the accounting uplift.

The real business lever is mix: hotels and bus can offset air weakness, but air is the highest-signal segment for both regional stability and business-travel normalization. A reversal in Middle East risk would matter within 1-3 quarters and could be a stronger catalyst than any analyst target change; conversely, if disruption persists, the market may start treating the growth story as lower-quality and more cyclical. That is especially important because the margin profile is already thin enough that a small booking miss can overwhelm the earnings narrative.

Contrarian view: consensus may be too focused on target raises and not enough on the fact that the stock is being valued on forward EPS that assumes no conversion dilution, while the underlying margin profile remains flat. If the next print shows CC growth below the low-teens or EBIT margin slipping under the current run-rate, the rerating thesis breaks quickly. Over a 6-18 month horizon, the bigger risk is that MMYT becomes a classic "story stock" where multiple expansion outruns fundamental improvement.

Key Decisions for Investors

• Long MMYT on a 2-3 month horizon only on pullbacks, not strength-chase; the setup is best if the stock re-traces toward the post-target-hike consolidation and investors can buy the EPS-denominator story at a discount. Risk/reward: ~2:1 if the market begins to price the 2027-2029 EPS uplift; thesis fails if Q1 FY27 CC growth prints in the low-single-digits or margins compress below the current 1.8% gross-bookings EBIT rate.
• Buy MMYT 6-month 65/80 call spread if the stock trades near the low-$60s; this expresses upside from consensus re-rating while capping premium at risk. Use this only if you want convexity around the next 1-2 earnings/events, because the move is more sentiment-driven than cash-flow-driven.
• If already long MMYT, hedge with a 3-6 month put spread rather than selling stock outright; the main downside catalyst is an air-travel miss or renewed regional disruption, which can hit the multiple before fundamentals show up in EPS. Falsifier: any guidance cut tied to air bookings or gross-bookings margin deterioration.
• Watch, don’t add, if the stock approaches the upper end of the analyst target band without a corresponding improvement in air growth data; that would suggest the market has fully priced the denominator benefit. At that point the risk/reward shifts from expansion to disappointment.