MMYT is now overvalued and could go down -44%

Based on our analysis, MakeMyTrip currently holds an overvalued rating of 1 out of 5 stars according to Cashu. This assessment is primarily influenced by several key financial ratios that indicate the company is trading at a premium compared to industry standards. The Price-to-Earnings (PE) ratio for MakeMyTrip is 49.87, significantly higher than the sector average of 17.77. A high PE ratio suggests that investors are willing to pay more for each unit of earnings, which may signal overvaluation, especially when the sector average is considerably lower. Additionally, the Price-to-Book (PB) ratio stands at 6.82, compared to the sector's 2.10. The PB ratio indicates how much investors are paying for each dollar of net assets. A high PB ratio can imply that the stock is overvalued relative to the actual book value of the company. MakeMyTrip's net profit margin is notably high at 27.71, in stark contrast to the sector margin of 0.18. While a high net profit margin indicates strong profitability, it does not mitigate the concerns raised by the elevated PE and PB ratios. The Return on Equity (ROE) ratio of 19.52 further highlights this overvaluation when compared to the sector's 1.69. A high ROE typically reflects effective management and profitability, but when combined with the other ratios, it suggests a potential disconnect between performance and market valuation. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.