Billionaire Howard Marks' Oaktree Capital recently disclosed a new position in MakeMyTrip (NASDAQ:MMYT). The fund bought a stake worth about $52.4 million. MakeMyTrip is India's major online travel company.
It sells flights, hotels, holiday packages, and bus and cab tickets. The stock is down about 25% so far this year. MakeMyTrip runs India's major travel booking platform.
Its revenue primarily comes from air tickets, hotels and packages, and bus tickets. A growing "other" bucket covers cabs, tours, and add-ons.The long-term pitch is simple. Indians are traveling more.
As incomes rise and more people in smaller cities start booking online, the whole market grows, and MakeMyTrip is the biggest player in it. MakeMyTrip recently quarter shows its gross bookings grew about 20% and revenue grew about 16% in constant currency. International flight departures fell 13% because the Middle East conflict disrupted travel and pushed airfares up.
Hotels and packages profit grew 21%. Bus ticketing margin grew 32%. Howard Marks of Oaktree Capital Management Travel demand is increasing rapidly despite pricing pressures.
When travel becomes expensive, customers just switch to buses, cabs, short domestic trips, and hotels. MakeMyTrip sells all of it, so it captures the demand no matter how it shifts. That is why the company kept growing through a bad quarter for air travel.Domestic travel has a long runway as more people move up the income ladder and book online for the first time.
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