Shares of MakeMyTrip (NASDAQ:MMYT) dipped 13.2% in April, according to data from S&P Global Market Intelligence. India faced surging COVID-19 infections and deaths, and it's not surprising that the travel company -- which is based in that country -- saw its valuation pressured.
India saw relatively low levels of coronavirus in 2020, but confirmed cases and related deaths rose dramatically in April, and the situation created a weakened outlook for MakeMyTrip and the country's overall travel industry. Last month's sell-off pulled the stock into negative territory on the year, and the company's share price is now down roughly 13% across the stretch.
MakeMyTrip provides online travel booking services for flights, buses, and trains in the Indian market, and the company has managed to grow bookings at a rapid clip over the last year. However, the rapid spread of the coronavirus is complicating the business' growth. The dramatic rise of infections presents a significant challenge and is straining some of the country's large cities and commerce hubs.
MakeMyTrip stock has continued to slide early in May's trading, with the share price down roughly 6.5% in the month so far.
The Indian travel market still has huge room for growth over the long term, but investors should approach MakeMyTrip with the understanding that the business' performance could be uneven. With a population of roughly 1.4 billion people, India is a massive market, and there are still good reasons to be bullish on the long-term outlook for its travel industry. Despite pressures created by the pandemic, the country's economy will likely still see massive growth over the next decade and beyond. Increased business and personal travel combined with rising purchasing power could be a boon for the company.
MakeMyTrip has a market capitalization of roughly $2.7 billion and trades at approximately five times this year's expected sales.