Is MakeMyTrip Ltd. overvalued or undervalued?

As of 14 May 2025, the valuation grade for MakeMyTrip Ltd. has moved from expensive to very expensive, indicating a significant concern regarding its current market valuation. The company is deemed overvalued, with a P/E ratio of 116, which is substantially higher than its peer MicroStrategy, Inc. at 46.70 and TKO Group Holdings, Inc. at 62.19. Additionally, the EV to EBITDA ratio stands at 71.63, further emphasizing the premium at which MakeMyTrip is trading compared to its peers.
In terms of financial performance, MakeMyTrip's ROCE is 17.64% and ROE is 7.92%, which, while respectable, do not justify the high valuation multiples. The company's recent stock performance has been underwhelming, with a year-to-date return of -18.50%, contrasting with the S&P 500's positive return of 2.44% in the same period. This discrepancy reinforces the notion that MakeMyTrip is overvalued in the current market environment.