In the wake of the ongoing slowdown in the aviation and tourism industry, Gurugram-headquartered online travel company MakeMyTrip has raised INR 73.5 Cr in two tranches from Mauritius-based entity — MakeMyTrip Limited.

According to the ministry of corporate affairs (MCA) filings accessed by Inc42, MMT has raised INR 37 Cr on March 16 while the parent company infused INR 36.5 Cr on March 9

MakeMyTrip issued 21,81,461 shares to the company at INR 340 per share with a nominal price of INR 10.

MakeMyTrip had reported an adjusted operating loss of $11.2 Mn in Q3 2020, down from $19.3 Mn in the previous quarter in the same fiscal. Meanwhile, the company’s revenue increased to $146.9 Mn, from $118 Mn in the previous quarter.

For MakeMyTrip, the impact is quite visible from the downfall of the share prices. From $29.95 on February 12, MakeMyTrip‘s share price declined to $10.8 on March 18. The situation is quite similar for MakeMyTrip competitor Yatra as well. Yatra’s share price fell from $3.79 on February 14 to $0.91 on March 18.

MakeMyTrip’s Revival Plan

To start with, MakeMyTrip’s Kalra and CEO Rajesh Magow shared a revival plan with the company’s employees. Some of the measures include reducing variable costs such as advertising, sales promotions and payment gateway costs, along with optimising IT infrastructure and expenses relating to the functioning of our offices and other establishments.

Anand Rathi has given a buy rating to Indian Hotels with a target price of Rs 100.

With the "no-travel" policy and companies adopting "work from home", the brokerage expects the impact of the virus to begin waning by June-July, and business to pick up in H2 FY21. It also assumes that as the last few months of 2020 roll in, inbound travel is likely to be a fraction of what India gets in typical years. Considering the situation and its impact on hospitality, the FY21e/FY22e EBITDA for Indian Hotels has been cut by 71.7 per cent/39.7 per cent.

The share price moved up by 2.38 per cent from its previous close of Rs 69.35. The stock last traded price is Rs 71. Incorporated in 1902, Indian Hotels has a market cap of Rs 8253.45 crore.

Investment Rationale

Key assumptions taken for FY21 are: standalone properties: 40 per cent occupancy with 12 per cent y/y cut in ARR; US and UK properties: 30 per cent occupancy with 12 per cent y/y cut in ARR). The brokerage retains buy rating on the stock, with a lower target price of Rs 100, from Rs 180 (sum-of-parts or SoTP valuation)
For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 1372.72 crore, up 36.26 per cent from last quarter sales of Rs 1007.44 crore and up 3.72 per cent from last year's same quarter sales of Rs 1323.45 crore. The company reported net profit after tax of Rs 193.73 crore in the latest quarter.

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MakeMyTrip’s Revival Plan

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