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MakeMyTrip Is No Ctrip

Friday - 5/24/2013, 3:00am  ET

The bumpy flight for MakeMyTrip continues. Shares of India's leading travel portal closed lower yesterday after posting disappointing quarterly results.

Revenue less service costs fell slightly, to $21.8 million, as a surge in hotel and travel package bookings were enough to offset another steep plunge in airline ticketing. Analysts were holding out for a modest uptick. MakeMyTrip's adjusted deficit of $0.17 a share was far worse than the $0.06 a share loss that Wall Street was expecting.

MakeMyTrip is a forgotten stock these days. Despite toiling away in the world's second most populous nation, investors flocking to India's few publicly traded dot-com plays have been burned in recent years.

Rediff.com -- the Mumbai-based online portal that, according to traffic tracker Alexa.com, has slipped to become the country's 14th most popular website -- took an even bigger hit yesterday after posting a 10% year-over-year decline in revenue.

Few doubt that there will be a good time to buy into India's Internet. The country's Draft National Telecom Policy has been promising broader broadband access throughout the country for some time. However, until the economy and mainstream connectivity improves, we will continue to bump into these problematic quarters.

It's a far cry from the hype that surrounded MakeMyTrip's IPO. After pricing its offering at $14, the stock traded as high as $42.88 a few weeks later. Many called MakeMyTrip the Ctrip.com of India at the time, but that's certainly not a fair comparison these days.

Despite its speed bumps, Ctrip has lived up to the growth expectations. Ctrip's latest quarter treated investors to a fat profit on a 27% spike in revenue. Goldman Sachs did downgrade Ctrip earlier this month, but primarily on valuation concerns. Ctrip shares have more than doubled since bottoming out this past summer.

MakeMyTrip hasn't been as fortunate. The heady growth failed to materialize, and profitability never amounted to much. Now, MakeMyTrip can't even point to meager earnings, after posting a quarterly deficit for the second period in a row.

There will come a time to buy into India's few Internet companies as well as MakeMyTrip. We just seem to be far away from that point at the moment.

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This article was originally published as MakeMyTrip Is No Ctripon Fool.com

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