MakeMyTrip: Is India's Aspirational Travel Demand Enough to Justify a 100x P/E?

The stock of MakeMyTrip (MMYT) trades at a price-to-earnings (P/E) ratio of approximately 125 as of December 2025, a figure that dwarfs its three- and five-year averages of around 96.58. For investors, this raises a critical question: Does India's burgeoning aspirational travel market justify such a premium valuation? The answer hinges on a delicate balance between valuation realism-assessing whether the company's current earnings and growth trajectory support the multiple-and growth optimism, which bets on India's demographic tailwinds and MakeMyTrip's strategic positioning to capitalize on them.

Valuation Realism: A P/E That Defies Historical Norms

MakeMyTrip's P/E ratio has historically fluctuated wildly, peaking at 162.08 in September 2023 and hitting a trough of 36.44 in March 2024. The current multiple, while lower than its 2023 peak, remains far above its historical averages, suggesting investors are paying a significant premium for future growth. This premium is particularly striking when juxtaposed with the company's recent earnings performance. In 2025, MakeMyTrip reported an earnings per share (EPS) of $0.83, a 52.3% decline from 2024's $1.74. The trailing twelve-month (TTM) EPS as of September 2025 was $0.64, a 66.32% drop from the prior year. Even more concerning, the company posted a negative EPS of -$0.06 in Q3 2025.

These figures underscore a valuation disconnect. A 125x P/E implies that investors expect earnings to rebound sharply and sustain growth to justify the multiple. Analysts project EPS to rise from $1.27 to $1.77 in the next year-a 39.37% increase. However, such a rebound would need to occur consistently over several years to rationalize the current P/E. For context, the S&P 500's average P/E ratio hovers around 25, and even high-growth tech stocks rarely trade above 50x without robust earnings visibility. MakeMyTrip's current valuation, therefore, demands a leap of faith in its ability to reverse its earnings trajectory.

Growth Optimism: India's Travel Market as a Catalyst

The bullish case for MakeMyTrip rests on India's aspirational travel demand, which is expanding at an unprecedented pace. The online travel market in India is projected to grow from $51 billion in 2024 to $124.1 billion by 2033, driven by a 9.3% compound annual growth rate (CAGR). This expansion is fueled by rising disposable incomes, digital adoption, and a young, travel-hungry population. The outbound tourism segment, valued at $21.6 billion in 2024, is expected to surge to $61.7 billion by 2033 at a 12.3% CAGR.

MakeMyTrip is strategically positioned to benefit from these trends. The company's 2025 revenue reached $0.978 billion, a 25.02% increase from 2024, with Q1 2025 revenue growing 9% year-over-year to $229 million. Its international business now accounts for 27% of total revenue, with international air ticketing and hotel bookings rising 27% and 45%, respectively, in Q1 2025. Analysts forecast annual revenue of $1.2 billion for 2026, with some projecting $1.7 billion by 2028. These figures suggest a company scaling rapidly in a market poised for explosive growth.

Moreover, MakeMyTrip is leveraging technology to differentiate itself. The introduction of AI-powered features like "Collections", which personalizes hotel and homestay recommendations, aligns with consumer demand for tailored travel experiences. The company is also capitalizing on government initiatives such as the UDAN scheme, which aims to connect 120 new destinations via regional air connectivity, and the "Heal in India" program to boost medical tourism. These efforts position MakeMyTrip as a beneficiary of both private-sector innovation and public-sector infrastructure investment.

The Middle Path: Balancing Risks and Rewards

The key question remains: Can MakeMyTrip's growth potential offset its current valuation risks? On one hand, the company's revenue growth and market expansion are impressive. Its international business is a bright spot, and India's travel market is undeniably on an upward trajectory. On the other hand, earnings volatility and a P/E ratio that exceeds historical norms create a precarious situation. If the company fails to deliver on its projected EPS growth, the stock could face a sharp correction.

Investors must also consider macroeconomic and competitive risks. While India's middle class is expanding, inflation, currency fluctuations, and global travel disruptions could dampen demand. Additionally, MakeMyTrip faces competition from global players like Booking.com and domestic rivals such as OYO and Yatra. Sustaining its market leadership will require continuous innovation and operational efficiency.

Conclusion: A High-Stakes Bet on the Future

MakeMyTrip's 125x P/E ratio is a double-edged sword. It reflects investor confidence in India's travel market but also exposes the company to the risk of unmet expectations. For growth optimists, the stock represents a high-conviction play on a market set to triple in size by 2033. For valuation realists, the current multiple appears unsustainable without a clear path to earnings normalization.

The answer likely lies in the company's ability to execute its strategic initiatives-particularly in international markets and AI-driven personalization-while navigating macroeconomic headwinds. If MakeMyTrip can transform its earnings trajectory to match its revenue growth, the 100x P/E may prove to be a bargain. If not, it could become a cautionary tale of overvaluation in the face of aspirational optimism.