Goldman Sachs reiterates Buy rating on MakeMyTrip stock, sees entry point

Goldman Sachs maintained its Buy rating and $123.00 price target on MakeMyTrip (NASDAQ:MMYT), identifying the stock's 15.68% year-to-date underperformance as a potential entry point for investors. Despite recent weakness in domestic air travel, which constitutes less than 25% of revenue, Goldman emphasizes MMYT's robust 57.06% gross margins and anticipates revenue growth acceleration from December 2025, driven by tax cuts and airline supply normalization. The firm projects a 19% revenue CAGR and 33% EBITDA CAGR from FY25-30, alongside $1 billion in free cash flow generation between FY26-28, a view supported by MakeMyTrip's strong Q1 2025 results showing 7.8% YoY revenue growth and 22.6% profit increase.

Analysis

Goldman Sachs has reiterated its "Buy" rating and $123.00 price target on MakeMyTrip (NASDAQ:MMYT), presenting the stock's 15.68% year-to-date underperformance as a potential entry point. The recent share price weakness, which has brought the stock to $94.67, is attributed to softness in the domestic air travel market. However, Goldman Sachs mitigates this concern by highlighting that this segment constitutes less than 25% of MMYT's revenue and an even smaller portion of its profitability, underscoring the company's resilient 57.06% gross margin. The investment bank's bullish thesis is anchored on an expected acceleration in revenue growth starting December 2025, fueled by catalysts such as tax cuts and airline supply normalization. This is supported by strong forward-looking projections, including a 19% revenue compound annual growth rate (CAGR) from fiscal 2025 to 2030, alongside a 33% EBITDA CAGR and 39% EPS CAGR. The company's fundamental strength was recently evidenced in its Q1 2025 results, which showed a 7.8% year-over-year revenue increase to $268.8 million and a 22.6% rise in profit to $25.8 million. Despite this positive analyst coverage and solid earnings, a minor post-earnings stock decline and a conflicting InvestingPro analysis suggesting the stock trades above its Fair Value signal some market apprehension.

Key Decisions for Investors

• Investors with a long-term horizon, aligned with the growth narrative for the Indian travel sector, could interpret the stock's recent underperformance as a strategic buying opportunity, given Goldman's bullish long-term CAGR projections for revenue (19%) and EPS (39%).
• It is crucial to monitor the recovery of the Indian domestic air travel market and airline supply normalization, as these are the primary catalysts cited for the anticipated growth acceleration beginning in December 2025.
• Given the divergence between Goldman's high price target and an InvestingPro analysis suggesting the stock is above fair value, investors should weigh the long-term potential against potential near-term valuation risk and volatility.