MakeMyTrip Limited (MMYT): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear, actionable breakdown of the external forces shaping MakeMyTrip Limited (MMYT) right now, and honestly, the landscape is complex but presents clear opportunities. The company closed its 2025 fiscal year with record Gross Bookings of $9.8 billion and a net profit of $95.3 million, showing robust post-pandemic recovery and expansion, especially in international markets. But as a seasoned analyst, I see the near-term risks and opportunities mapped directly to the PESTLE factors-from geopolitical tensions to the rise of GenAI chatbots-and you defintely need to understand these six macro forces to make your next move.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Political factors

Geopolitical tensions dampened travel demand in Q1 2026 (May/June 2025)

Geopolitical instability and domestic security events created a measurable headwind for MakeMyTrip Limited's (MMYT) core leisure travel business in the first quarter of fiscal year 2026 (Q1 FY26), which ended June 30, 2025. The company's growth momentum, which was strong in April, slowed significantly in May and June due to muted consumer sentiment.

Specifically, a terrorist attack in April 2025 near Pahalgam, followed by a brief India-Pakistan military conflict and an airplane crash in Ahmedabad in June, caused significant travel disruptions and temporary airport closures in northern and western India. This is a clear, near-term risk.

The impact was most visible in the high-margin Hotels and Packages segment, where revenue declined by 3.5% year-over-year (YoY) to $141.6 million in Q1 FY26. Still, the company's overall resilience, driven by its diversified model, allowed total revenue to grow by 5.6% YoY to $268.8 million, and Adjusted Net Profit rose to $49.4 million.

Here's the quick math on the segment performance for Q1 FY26:

Indian government's Digital India program improves the digital infrastructure for OTAs

The Indian government's long-running Digital India program continues to be a foundational tailwind for Online Travel Aggregators (OTAs) like MakeMyTrip Limited. This initiative has significantly improved the underlying digital infrastructure, which is defintely a boon for online commerce.

The widespread adoption of the Unified Payments Interface (UPI), a government-backed real-time payment system, has made digital transactions seamless for millions of new users, including those in semi-urban and rural areas. This dramatically lowers the friction for first-time online bookers.

Rajesh Magow, Group CEO of MakeMyTrip, stated in January 2025 that the next wave of digital growth will benefit rural India, with nearly a billion people soon using smartphones, expanding the total addressable market for online travel. This government-enabled infrastructure is what makes that expansion possible.

Key political enablers for OTA growth in 2025 include:

• UPI adoption standardizing instant, secure payments.
• UID (Aadhaar) providing a robust digital identity for inclusive growth.
• Low data prices, which drive digital innovation and adoption.

Potential changes to the Goods and Services Tax (GST) for online travel aggregators (OTAs) could impact margins

Changes to the Goods and Services Tax (GST) framework in September 2025 present a mixed bag of opportunities and margin risks for OTAs. The government's goal is to simplify the tax structure, but the details matter.

The most favorable change for domestic travel demand is the reduction of GST on mid-range hotel rooms (tariffs between ₹1,001 and ₹7,500) from 12% to 5%. This makes a huge chunk of the inventory on MakeMyTrip Limited's platform more affordable for the average traveler, potentially boosting booking volumes.

However, the complexity arises for tour operators, who can choose between a 5% GST rate without an Input Tax Credit (ITC) or an 18% rate with ITC. The removal of ITC benefits in certain revised structures, such as for hotel rooms up to ₹7,500, could increase operational costs for OTAs and impact margins if those costs cannot be fully passed on to customers or suppliers.

Cross-border travel policies, like those with China, create complexity for international bookings

Cross-border travel policies, especially those tied to geopolitical relationships, introduce a layer of complexity for international bookings. The India-China relationship is a prime example of political policy directly affecting the travel market.

In a positive step, India restored tourist visas for Chinese nationals in November 2025, which had been suspended since the 2020 border clashes. This normalization, coupled with the resumption of direct flights, is expected to revive the India-China travel corridor, a potential growth area for MakeMyTrip Limited's international segment.

On a related note, the political climate has also pressured the company's ownership structure. In June 2025, MakeMyTrip Limited announced a plan to raise over $2.5 billion to significantly reduce the stake of its largest shareholder, China-based Trip.com Group, from over 45% to around 20%. This action is a direct political de-risking move to counter nationalist sentiment and accusations of Chinese influence.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Economic factors

You need to understand that MakeMyTrip Limited's (MMYT) performance is a direct, clear reflection of the Indian consumer's rising financial power, but it's not immune to global economic tremors. The core takeaway is that domestic and international growth is robust, but the underlying airline cost structure presents a major near-term risk.

The company delivered a phenomenal Fiscal Year 2025 (FY2025) performance, driven by this economic tailwind. Gross Bookings hit a record-breaking $9.8 billion, a substantial increase that underscores the sustained momentum in Indian travel demand. This growth is a clear indicator of the expanding middle-class wallet, translating directly into discretionary spending on travel.

Fiscal Year 2025 Gross Bookings hit a record $9.8 billion.

The sheer scale of the FY2025 Gross Bookings, reaching $9.8 billion, confirms MakeMyTrip's dominant position and the health of its primary market. This record figure represents a 25.9% year-on-year increase in constant currency, demonstrating that the platform is effectively capturing the post-pandemic surge in travel. To be fair, this is a top-line metric, but it shows the volume of transactions flowing through the platform.

The overall sector's economic contribution is also soaring, with the World Travel & Tourism Council (WTTC) forecasting that India's Travel & Tourism sector will contribute over INR 22 trillion to the national economy in 2025. This massive increase in market size provides a strong structural foundation for MakeMyTrip's continued growth, even as competition heats up.

International Hotels revenue grew over 65% in FY2025, outpacing domestic growth.

The most compelling economic data point is the outperformance of the international segment. International Hotels revenue grew by over 65% year-on-year in FY2025, significantly outpacing the growth of the overall Hotels and Packages business. This is a critical signal: the Indian consumer is not just traveling more, they are traveling abroad more, which is a higher-margin business for the company.

The international business now contributes 25% to the company's overall revenue, up from 22% in FY2024. This shift is a direct result of rising affluence, where international travel spending from India is approximately four times that of domestic travel per person.

Rising disposable incomes in India fuel robust demand for both domestic and international travel.

This is the engine of the entire thesis. The expanding Indian middle class, combined with specific government policies, is directly boosting travel demand. Leisure travel spending in India is projected to rise by 10% to 12% annually until 2040, making India a principal driver of global leisure travel.

Here's the quick math on the domestic strength and the international opportunity:

Plus, monetary and fiscal policy actions in 2025, including income tax cuts worth an estimated Rs 1 trillion, are directly increasing household consumption and improving urban sentiment, which is defintely a boon for discretionary spending.

The cyclical nature of travel makes the stock sensitive to global economic downturns and inflation.

While the demand story is strong, the travel sector is fundamentally cyclical and vulnerable to external shocks. You can't ignore the risks tied to global economic conditions, especially inflation and currency volatility.

• Fuel Cost Pressure: Aviation Turbine Fuel (ATF) prices averaged Rs 95,181 per kilolitre in FY2025. Although down 8% year-on-year, fuel still accounts for 30-40% of an airline's operating costs, and any sustained rise in crude oil prices will quickly translate to higher ticket prices, potentially dampening demand.
• Currency Risk: A significant portion of airline costs, approximately 35-50% (such as aircraft maintenance and lease payments), are denominated in US dollars. A weakening Indian Rupee, as seen in Q2 FY26, creates forex losses for airline partners, which can lead to higher fares and capacity cuts on the platform.
• Capacity Constraints: Operational challenges, including engine failures and supply-chain issues, have grounded around 133 aircraft (or 15-17% of the total industry fleet) as of March 31, 2025. This capacity crunch can limit the ability of airlines to meet surging demand, leading to price inflation and slower Gross Bookings growth.
• Domestic Slowdown Signal: Domestic air passenger traffic growth has shown signs of consolidation, declining for three consecutive months through September 2025, suggesting that the initial sharp post-COVID rebound is maturing and becoming more sensitive to price.

What this estimate hides is that travel is not recession proof; a global economic slowdown translates to tightening consumer travel budgets, with travelers opting for midscale over luxury, which would compress margins in the Hotels and Packages segment.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Social factors

The social landscape in India is rapidly evolving, driven by a massive demographic shift and a growing middle class that views travel as a lifestyle necessity, not a luxury. This change is the primary tailwind for MakeMyTrip Limited, creating a digitally-native customer base with a high propensity to spend on experiences.

You need to understand that this isn't just about more people traveling; it's about a fundamental change in how they travel, which maps directly to the company's product strategy. The shift is from traditional, package-tour holidays to personalized, frequent, and experience-rich journeys.

Strong preference for online booking platforms exists, with 78% of Indian Millennials and Gen Z favoring them.

The younger generations-Millennials and Gen Z-are the engine of travel growth, and their preference for digital platforms is defintely a structural advantage for an Online Travel Agency (OTA) like MakeMyTrip. We see that a significant 78% of Indian Millennials and Gen Z travelers favor online booking platforms for their convenience and price transparency.

This digital-first mindset means booking is often a self-directed process, with a high percentage of these travelers using apps and websites to research and purchase. They are value-conscious, with 82% of Gen Z and 88% of Millennials prioritizing finding the best options within their budget, which keeps them actively engaged on price-comparison platforms.

Here is a quick look at the digital engagement drivers:

• Gen Z is 7% more likely to travel solo, demanding flexible, independent booking tools.
• 89% of Gen Z plan to spend more on travel in 2025, far exceeding the APAC average.
• Solo trips are planned by 68% of Gen Z and 65% of Millennials to relax and recharge.

The company is catering to a shift toward experiential travel with new products like NextGenAdventures.

The market is moving away from simple sightseeing to immersive, experiential travel (travel that focuses on local culture, adventure, and personal growth). MakeMyTrip is directly addressing this by investing in new demand segments and personalized customer experiences, exemplified by products like NextGenAdventures.

This product focus aligns with the core motivations of the new traveler: 46% of Gen Z and 48% of Millennials are motivated by adventure, and a similar number prioritize cuisine and cultural immersion. The company is strategically deepening its offerings in the 'Activities' and 'Homestays and Villas' segments to capture this high-margin, experience-driven demand.

The shift is clear: travelers are prioritizing spending on boutique stays and wellness experiences over traditional luxury goods.

A growing middle class drives significant demand, leading to 37.0 million hotel-room nights booked in FY2025.

The expansion of India's middle class, coupled with rising disposable incomes, is the macro-economic driver translating directly into booking volume. This demographic expansion has fueled a surge in both domestic and international travel, leading to unprecedented accommodation demand.

For the fiscal year 2025 (FY2025), MakeMyTrip reported a substantial volume of 37.0 million hotel-room nights booked. This massive scale reflects the successful capture of this growing demand, driven by a confirmed 18.9% increase in the number of hotel-room nights in FY2025 compared to the previous year.

This growth is primarily fueled by a preference for more frequent, shorter trips-77% of Millennials and 70% of Gen Z prefer multiple short trips over one long holiday, keeping the booking pipeline consistently active.

The international business now contributes 25% to overall revenue, reflecting a change in consumer travel aspirations.

A clear sign of the middle class's rising affluence and global aspirations is the increasing contribution of international travel to the company's top line. International travel is a key growth area for the company, as Indian travelers become more confident and willing to explore destinations beyond their borders.

For FY2025, the international business segment contributed a significant 25% to MakeMyTrip's overall revenue, a notable increase from 22% in the prior fiscal year (FY2024). This growth is being led by international hotel revenue, which grew by over 65% year-on-year in FY2025, and international air ticketing revenue, which grew by over 33% year-on-year.

This shift indicates that the company's diversification strategy, which involves strengthening its international product proposition and increasing its directly contracted international hotel count, is paying off. The outbound market is now a critical growth opportunity.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Technological factors

You need to see the technology landscape not just as a cost center, but as the core engine of your growth and margin expansion. MakeMyTrip's strategy in FY2025 has been a clear pivot to Generative Artificial Intelligence (GenAI), which is driving both customer experience and operational efficiency, but the competition is right on your heels.

The company's ability to handle massive transaction volumes-like the bus ticketing segment-while simultaneously rolling out sophisticated AI tools is a defintely a core strength. The goal is simple: make the digital travel experience so intuitive that it becomes the default choice for the next wave of users, especially in non-metro areas.

Heavy investment in Artificial Intelligence (AI) led to the launch of the GenAI chatbot Myra.

MakeMyTrip made a significant strategic move in 2025 by launching its next-generation GenAI-enabled Trip Planning Assistant, Myra. This wasn't a small feature update; it was a major investment, building on the company's earlier AI integration from 2023. The technology is a sophisticated, multi-agent AI framework, developed in-house, that uses custom language models to process complex, open-ended queries in both English and Hindi (or Hinglish).

This investment is designed to solve one of the biggest friction points in online travel: the jump from inspiration to booking. Myra covers the entire travel journey-from destination discovery and customized itinerary generation to managing post-sales support across flights, hotels, ground transport, visas, and forex.

Myra handles over 25,000 daily customer queries, improving efficiency and conversion rates.

The immediate impact of the Myra chatbot is visible in operational metrics. Since its launch in August 2025, Myra already handles more than 25,000 conversations a day. This high-volume automation is a direct lever for profitability, helping reduce customer acquisition costs and improving customer retention by providing instant, personalized support.

The shift to conversational AI is also a key strategy for reaching underserved customers in India's heartland, where users may be more comfortable with voice-based interaction in regional languages than complex, English-first interfaces.

• Myra's daily conversations: >25,000
• Key benefit: Reduced customer acquisition costs
• Platform support: Text, voice, and multimodal inputs

Advanced platforms manage a high volume of transactions, including 106.5 million bus tickets booked in FY2025.

The core technology platform is built for scale, which is evident in the performance of the bus ticketing segment, a high-volume, low-margin business that relies heavily on efficient transaction processing. For the full fiscal year 2025, the bus ticketing segment generated a revenue of approximately $119 million to $131 million, a significant contributor to the company's overall FY2025 Gross Bookings of $9.8 billion.

The platform's robust architecture was able to manage the high throughput necessary to process an estimated 106.5 million bus tickets booked in FY2025, demonstrating the immense capacity of the underlying technology stack to handle millions of daily transactions across all segments.

Competitors are also rapidly accelerating their use of AI, intensifying the need for constant innovation.

The technological edge is fleeting. The entire Online Travel Agency (OTA) industry is in an AI arms race in 2025. Global giants like Expedia and Booking.com are aggressively integrating generative AI, with features like AI-powered Trip Matching and advanced traveler intent analysis. This means Myra's success is just the starting line.

Regional competitors, including Trip.com Group, are also launching their own AI initiatives, emphasizing the need for MakeMyTrip to maintain its pace of innovation. The real challenge is not just launching a new AI feature, but continuously refining the underlying models to ensure Myra's conversational capabilities remain superior and contextually relevant for the diverse Indian market.

You can't rest on a single launch; you have to keep iterating on the AI to stay ahead of the global players. The next step is to expand Myra's multilingual support beyond Hindi and English, which is already in the pipeline.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Legal factors

Compliance with India's Personal Data Protection Bill 2019 requires robust data handling protocols.

You need to see the Digital Personal Data Protection (DPDP) Act, 2023, as a major cost center and risk factor, not just a compliance checkbox. The associated DPDP Rules, 2025, were notified in November 2025, making the framework fully operational, though implementation is staggered until May 13, 2027. MakeMyTrip Limited, as a 'Significant Data Fiduciary' handling millions of customer bookings, falls under the most stringent compliance category.

This means overhauling systems to ensure verifiable consent, especially for children's data, and implementing robust security safeguards like encryption and access controls. The financial risk is substantial: a failure to maintain reasonable security safeguards can lead to a penalty of up to ₹250 crore (approximately $30 million), and violations concerning children's data can attract fines up to ₹200 crore.

• Implement verifiable consent mechanisms.
• Notify Data Protection Board (DPB) of breaches within 72 hours.
• Appoint a Data Protection Officer (DPO).

The company must adhere to US Securities and Exchange Commission (SEC) filing requirements as a Nasdaq-listed entity.

As a Foreign Private Issuer (FPI) listed on the Nasdaq Global Market under the ticker MMYT, MakeMyTrip Limited must file annual reports on Form 20-F and current reports on Form 6-K, ensuring full transparency to US investors. This dual compliance structure-India-based operations with US-listing rules-adds complexity and cost.

The company was highly active in the US capital markets in 2025. In June 2025, MakeMyTrip Limited completed a significant capital raise, which included an underwritten registered public offering of 16,000,000 Ordinary Shares, plus the underwriters' full exercise of their option to purchase an additional 2,400,000 shares, for a total of 18,400,000 new Ordinary Shares. The net proceeds from this Primary Equity Offering were approximately US$1.62 billion, which was used to repurchase Class B shares from Trip.com Group Limited.

A lock-up agreement on certain Ordinary Shares expired on October 15, 2025, potentially increasing market float.

A major legal event affecting market dynamics was the expiration of a lock-up agreement on certain Ordinary Shares on October 15, 2025. This agreement restricted the sale of shares held by directors, executive officers, Travogue, and Trip.com Group Limited following a previous offering.

The expiration means that a large pool of shares, previously illiquid, became eligible for sale in the open market. This sudden increase in the tradable supply (market float) can create downward pressure on the stock price, even if the underlying business fundamentals are strong. Investors are defintely watching the trading volume post-October 15 to gauge the actual selling pressure from these insiders and major shareholders.

Regulatory changes in the e-commerce taxation structure could defintely impact future operating costs.

India's e-commerce taxation landscape is focused on tightening compliance, not necessarily increasing tax rates, which still impacts operating costs. The core Goods and Services Tax (GST) framework mandates that e-commerce operators (ECOs) like MakeMyTrip Limited deduct Tax Collected at Source (TCS) at a 1% rate on the net value of taxable supplies before paying sellers.

New procedural updates in 2025, such as GST now being applicable to delivery charges, directly affect the final price for the consumer and the complexity of the platform's tax calculation engine. The heightened scrutiny from Indian tax authorities demands cleaner compliance, stricter validation of seller GSTINs (GST Identification Numbers), and real-time reconciliation, all of which require significant investment in technology and finance teams.

MakeMyTrip Limited (MMYT) - PESTLE Analysis: Environmental factors

The company promotes responsible tourism to minimize the industry's carbon footprint.

You're right to focus on carbon footprint; for an Online Travel Aggregator (OTA) like MakeMyTrip Limited, this is a material risk, but also a huge opportunity to influence the broader travel ecosystem. The company's approach is dual: clean up its own operations and push for change across its partners. For its own facilities, the move to clean energy is impressive: the Bengaluru office has achieved an impressive 85% reliance on renewable energy sources through a Power Purchase Agreement (PPA). That's a clear, measurable step toward a low-carbon future, and it defintely reduces their Scope 2 emissions (indirect emissions from purchased energy).

To tackle their Scope 1 emissions (direct from owned sources), they are transitioning their on-ground business travel fleet to Electric Vehicles (EVs). Here's the quick math: this initiative, launched in early 2024, successfully saved around 0.4 tCO2 in just four months. They also incentivize employees to choose EVs for personal use with a 'Drive Green Benefit Policy.' Furthermore, the MakeMyTrip Foundation has a long-term impact through its afforestation efforts, which have sequestered an estimated 8,000 MT of CO₂, which is roughly equivalent to taking 5,400 flights off the grid (Delhi to Germany route).

Initiatives include tackling marine waste and providing water ATMs to reduce single-use plastic bottles.

The travel industry is a massive contributor to plastic pollution, especially in coastal and remote areas. MakeMyTrip Limited is addressing this head-on through localized, community-focused projects. Their work in the Andaman Islands, specifically the Neil Island initiative, is a concrete example of tackling marine waste and ocean plastic.

A key action here is providing water ATMs to reduce the consumption of single-use plastic bottles. This is a smart move because it offers a clean, sustainable alternative right at the point of consumption. Across all their waste management and cleanup initiatives, the MakeMyTrip Foundation has been highly active, demonstrating a significant commitment beyond just their core business operations.

• Waste Collected: Over 351 MT (44 truckloads) of waste.
• Funds Unlocked: INR 1.42 CRORE for waste management.

Community-based projects upskill locals to operate homestays and eco-cafes, tying tourism to sustainability.

This is where the 'S' (Social) and 'E' (Environmental) of ESG truly intersect, creating a more resilient and sustainable supply chain for the company. By empowering local communities, MakeMyTrip Limited is building a network of responsible tourism offerings that travelers are increasingly demanding. The focus is on upskilling locals to manage their own enterprises, ensuring tourism revenue stays within the regional economy.

The result is a tangible economic boost for these communities, which is the best way to ensure long-term environmental stewardship. If the local economy depends on a pristine environment, they will protect it. The impact data from the Foundation's work speaks for itself:

Climate risk adaptation is material, as extreme weather events can disrupt travel and operations.

Climate risk is not a distant threat; it's a near-term operational reality for any travel company operating in a region like India, which is highly exposed to extreme weather. The World Economic Forum's Global Risks Report 2025 ranked extreme weather events as the most significant global risk over the next decade. For MakeMyTrip Limited, this translates directly to business disruption-think flight cancellations, road closures, and hotel damage.

The company has acknowledged 'Climate risk adaptation and mitigation' as a key material ESG topic. While their core business is digital, their value chain-flights, hotels, and ground transport-is heavily reliant on physical infrastructure that is increasingly at risk. Their Foundation has taken direct action in disaster response, such as aiding 600+ families during the Manali Flood Relief efforts, which is a practical form of climate adaptation and community resilience building. This focus on both mitigation (reducing emissions) and adaptation (disaster response, resilience) is the only realistic way to manage this risk.