MakeMyTrip shares soar as COVID vaccine progress from Moderna and Pfizer spark optimism of faster travel recovery
- MakeMyTrip share price jumped by 6.75% on Monday as the news of Moderna’s vaccine being 94.5% effective hit the market.
- After Pfizer’s vaccine’s report of being over 90% effective, Moderna’s became the second positive vaccine news from the US within a month.
- Major travel (airline and hotel) stocks in the US witnessed a strong rally as the vaccine revived hopes of recovery in the travel segment soon.
AdvertisementNASDAQ-listed Indian travel giant MakeMyTrip saw its share price jump by 6.75% on Monday as the news of Moderna’s vaccine being 94.5% effective hit the market.
Vaccine news uplifts spirits
After Pfizer’s vaccine’s report of being over 90% effective, Moderna’s became the second positive vaccine news from the US within a month. Russia’s Sputnik V too has claimed that it has a 92% efficiency against the virus. Meanwhile India’s COVID vaccine contender Bharat Biotech also announced on Monday that Covaxin had entered phase III of the trial.
All the positive vaccine news saw the US' major travel (airline and hotel) stocks rally as people saw it as a sign that travel will recover soon. The Dow too touched record highs after the news about Moderna’s vaccine.
Back home, India’s aviation minister is hopeful that air travel will hit pre-COVID levels in India by early January. "We opened civil aviation on 25th May, a good two months and two days after we had completely locked down, with 30,000 passengers a day. Two or three days ago, just before Diwali, we carried 225,000 people," said Civil Aviation Minister Hardeep Singh Puri.
MakeMyTrip is hopeful of faster travel recovery
MakeMyTrip which posted its second quarter results on October 27 is also hopeful that a vaccine would bring travel back to normalcy. “While we are already seeing green-shoots of demand across different travel services, we believe business recovery would significantly accelerate once a vaccine becomes widely available,” the company’s founder and Chairman Deep Kalra had said during the call.
With the travel opening up within India, MakeMyTrip has seen a gradual recovery. The company’s adjusted operating loss for the quarter stood at $12.9 million, which was significantly lower than the previous quarter's loss of $21.3 million.
|Segment||Adjusted Gross Margin||Y-O-Y Change|
|Air Ticketing||$11.9 million||- 81.9%|
|Hotels and packages||$5.5 million||93.6%|
|Bus ticketing||$2.5 million||-85%|
While there has been a quarter-on-quarter recovery, MakeMyTrip still has a long way to go for recovery.
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