Shares of MakeMyTrip Limited (NASDAQ:MMYT) fell 3.5% on Monday following publication of a report by short-seller Morpheus Research that alleges a range of commercial and accounting shortcomings at the Indian online travel agency.
Allegations on price parity and CCI fine
The report asserts that MakeMyTrip continues to implement price parity measures with its hotel partners despite a 2022 directive from India’s Competition Commission of India (CCI) to cease such conduct. The company was fined approximately $26.1 million in October 2022 for practices regulators described at the time as "anti-competitive" and "abusive" in relation to its hotel offerings.
Morpheus, which disclosed it holds a short position in MMYT, said it interviewed 103 industry experts, a group that included former employees. Based on those interviews, the report claims MakeMyTrip enforces price parity not through explicit contracts but via a "price competitiveness score" that it uses to influence hotel rankings on its platform, effectively penalizing hotels that are not competitively priced on its marketplace.
Accounting and provisioning concerns
On the accounting front, Morpheus questioned whether MakeMyTrip has fully provisioned for the potential liability stemming from the 2022 CCI fine. While the company paid a 10% deposit as part of its appeal, the short-seller estimates that the remaining balance plus accrued interest could total as much as $34 million. The appeal is pending, with the next hearing set for April 29, 2026.
The report also flagged a $20 million receivable from insolvent airline Go Air, noting that MakeMyTrip has provisioned for impairment on only half of that amount.
Additionally, Morpheus highlighted a divergence between MakeMyTrip’s adjusted profitability metrics and IFRS-reported profits, estimating a cumulative difference of $212 million since 2021.
Market position and competition
MakeMyTrip is reported to control roughly 50% of India’s online travel agency market and generates about 43% of its margin from hotel room night sales. The company’s market valuation is cited at $3.5 billion. The short-seller further alleges that MakeMyTrip is losing market share to competitors, including Booking.com and its subsidiary Agoda, based on interviews with hotel and airline executives.
What remains unresolved
The Morpheus report raises multiple questions about MakeMyTrip’s commercial practices, the sufficiency of its accounting reserves, the collectability of certain receivables and the relationship between adjusted and IFRS results. Many of these issues hinge on ongoing legal appeals, the outcome of which is not known at this time.
Disclosure