Is India Ready to Take Off?


Sometimes even a strong dot-com can be a rupee slipper.

India's monetary currency has been slammed over the past year, and it's once again on display with this morning's report out of MakeMyTrip (NAS: MMYT) .

India's leading travel portal may have seen revenue after service costs rise a mere 13% to $23.9 million in its fiscal first quarter, but it actually would've been a 36% spike if it wasn't for the declining value of India's rupee. A slight decline in air travel bookings was more than offset by a surge in hotel and travel package reservations.

MakeMyTrip reported a small deficit for the quarter, but on an adjusted basis we're looking at the travel leader's bottom line advancing 20% to $1.8 million or $0.05 a share. The analysts still tracking the company were holding out for an adjusted profit of $0.07 a share.

MakeMyTrip is no longer a dot-com darling. It went public at $14 two summers ago, trading as high as $42.88 mere weeks after going public. It has gone on to give nearly all of that back, closing out last week in the mid-teens.

It's not just MakeMyTrip feeling the pinch of investor apathy. (NAS: REDF) -- the Mumbai-based online portal that according to traffic tracker is the country's 12th most popular website -- hit a new 52-week low last week, shortly after posting a 32% plunge in revenue.

Sify Technologies (NAS: SIFY) is also trading within ticks of its two-year low. The provider of online connectivity and enterprise IT services posted a quarterly loss two weeks ago.

That's pretty much it for the India Internet plays available on stateside exchanges. Given their lackluster performances, it's safe to say that demand isn't exactly there for more options. India may be the world's second most populous nation and India's Draft National Telecom Policy is promising broader broadband access throughout the country, but until global investors see material and sustainable growth they will probably watch the revolution play out at a safe distance.

Why invest in MakeMyTrip when China's (NAS: CTRP) and market fave (NAS: PCLN) are growing at healthy rates without the currency concerns or infrastructure delays? As long as MakeMyTrip remains the top travel website in India there will definitely be a time to buy into the company. That time, unfortunately, isn't now.

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