MMYT just delivered its worst single-day drop in months, yet the short-seller community is quietly moving in the opposite direction from what the price action implies.
The contradiction is the story. Shares fell 7.7% on Tuesday after Q4 FY26 earnings missed the consensus — EPS of $0.32 against a $0.34 estimate, net income down 17% year-on-year to $24.3 million. The West Asia conflict hit March international bookings hard, and full-year net income more than halved to $51.8 million. The stock has now lost 19% over the past month and is approaching a 47% year-to-date decline. But as the previous note on this name flagged, the bears are covering, not piling in.
Short interest has fallen steadily from a recent peak near 9.9 million shares in late April to roughly 9.0 million now — a decline of about 3% on the week and nearly 10% from the April high. Borrow conditions tell the same unagitated story. Cost to borrow runs at just 0.68%, well below any level that signals forced-cover dynamics, and has actually ticked down slightly over the week despite the price collapse. Availability has tightened from about 103% in early April to 62% now, moving into the "tight" range, but still well above any threshold that would constrain new short-sellers looking to enter. The ORTEX short score of 73.5 is elevated — ranking in the 6th percentile for its sector — but it has been remarkably stable all week, moving in a narrow band between 73.3 and 73.8. That stability, against a backdrop of sharp price falls, suggests the shorts are neither scrambling to cover nor aggressively adding. Options positioning reinforces this read. The put/call ratio has dropped to 0.33, more than one standard deviation below its 20-day average of 0.41, touching near its lowest levels in the past year. That is the opposite of panic hedging — call volume is running hot relative to puts, even as the stock trades near multi-year lows.
The Street's bull case is built on a structural growth argument that the earnings miss does not obviously invalidate. The mean analyst price target is $74.60 against a current price of $41.46 — an implied upside of roughly 80%. That gap reflects long-standing Buy ratings from Citigroup and B of A Securities, both of which have been trimming targets steadily. Citigroup cut from $96 to $80 in April — the most recent move in the data — maintaining a Buy while acknowledging the deteriorating near-term picture. The direction of travel on targets has been one-way down for over a year: B of A was at $130 in December 2024, now $113; Citigroup has come from $125 to $80 over the same period. The bulls are hanging on, but their conviction numbers keep shrinking. On valuation, the P/E has compressed to about 20x on a trailing basis after the earnings decline, and the price-to-book has dropped by more than four points over the past month to around 16.6x. EPS momentum scores remain strong — the 90-day reading ranks in the 92nd percentile and the 12-month forward EPS growth estimate is in the 91st percentile — which is why long-term holders are not yet throwing in the towel. The near-term earnings surprise score, however, ranks in just the 11th percentile, a direct reflection of Tuesday's miss.
Ownership adds an important structural dimension. Trip.com holds 53% of shares, a stake that has not changed. Baillie Gifford added heavily in Q1 2026, taking its position to 15.8 million shares — a move of nearly 10 million shares — making it the largest independent institutional holder by some margin. Wellington, Artisan, and Wasatch all added in Q1 as well. On the other side, the Singapore government entity reported cutting its position by more than 2 million shares in April. The accumulation by Baillie Gifford, a long-duration growth manager, in the middle of the year-to-date decline is a meaningful data point. Their average cost is almost certainly well above today's price.
Travel sector peers offer little comfort on the week. NCLH fell 7.6% on the week — matching MMYT almost exactly — while EXPE dropped 2.9%, ABNB fell 3.2%, and BKNG lost 3.7%. The broader hospitality and travel complex is under pressure, which makes it harder to isolate how much of MMYT's decline is company-specific versus sector-wide. The West Asia conflict narrative, however, is specific to MMYT given its heavy exposure to South Asian and Middle Eastern travel corridors.
The debate now pivots to whether management's assertion — that the Q4 damage was concentrated in March and that January and February showed healthy growth — holds up when April and May booking data eventually surfaces. With no next earnings date yet confirmed, that read is weeks away at minimum.
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