MakeMyTrip Limited (MMYT) Cash Flow Statement

The wide quarterly swings in OCF/NI, from 3.20 in 2027Q1 to -8.67 in 2026Q2, suggest that net income is not a reliable proxy for cash generation on a quarter-by-quarter basis. The negative OCF/NI in 2026Q2 and 2025Q3 coincides with large working capital outflows, likely reflecting seasonal booking patterns and timing of supplier payments. Investors should focus on the cumulative cash conversion over a full year, which appears more stable, rather than reacting to quarterly noise.

After several quarters of zero capex and robust FCF, 2027Q1 shows a sharp increase in capital expenditures to $26.7M, which fully offset operating cash flow, resulting in zero FCF. This may indicate a strategic pivot toward investing in technology or infrastructure, possibly to support the homestays and villas expansion. The sustainability of this capex level is critical; if it persists, FCF margins could compress from the double-digit levels seen in prior quarters.

The sudden increase in capital expenditures to $26.7M in 2027Q1, after quarters of negligible capex, represents a material change in the company's investment profile. This could be directed toward technology platforms, data centers, or strategic acquisitions of physical assets, which would increase capital intensity and potentially pressure future FCF. The prior asset-light model allowed for high FCF conversion, so this shift warrants close monitoring to assess whether it yields commensurate returns.

The large quarterly swings in working capital, particularly the -$61.6M outflow in 2025Q3 and the +$38.9M inflow in 2025Q4, appear to align with the seasonal peaks in Indian travel demand. The negative changes likely reflect increased receivables and prepayments to suppliers during peak booking periods, while positive changes indicate collections catching up. This pattern suggests that MMYT's cash flow is inherently lumpy, and investors should evaluate working capital trends on a trailing twelve-month basis to smooth out seasonality.

The $1.6B and $3.0B buybacks in 2026Q3 and 2026Q2, respectively, are substantial relative to the company's market cap and indicate a strong conviction in the sustainability of future cash flows. These repurchases were funded by the company's existing cash pile, which stood at $424M, suggesting that management is willing to deploy a significant portion of its balance sheet to enhance shareholder value. However, the absence of dividends and the concentration of buybacks in two quarters may reflect opportunistic timing rather than a consistent capital return policy.

The cumulative OCF of $390.4M versus net income of $327.1M over the ten-quarter period suggests that MMYT's earnings are backed by real cash generation, with non-cash charges like D&A and SBC adding back to cash flow. This divergence is a positive signal for earnings quality, as it implies that the company is not relying on aggressive accruals to report profits. However, the large buybacks in 2026Q2 and 2026Q3 may have been funded by this accumulated cash, and investors should monitor whether future cash generation can sustain such distributions.