Despite the negative publicity around the controversy-ridden Commonwealth Games (CWG) 2010 and terrorist threats, the Indian tourism and hospitality industry seems to have seen a boost in demand in the last few months. 

The San Francisco based boutique investment bank Caris & Co. is optimistic about the upcoming financial results of the country’s largest online travel agency Makemytrip, noting that CWG has added a great momentum to the strong travel demand seen in the season. MakeMyTrip is releasing earnings for both its June and September quarters on November 15, which is the first official reporting season after its IPO on Aug 11. 

Sandeep Aggarwal, analyst at Caris & Co., estimates a 69% year on year increase in net revenues to $15.4 million for MakeMyTrip, and an EBITDA margin of 12.2 percent over adjusted EBITDA of $1.9 million. This will translate into a GAAP EPS of $0.03 for the September quarter. Aggarwal has retained a buy rating with a $46 price target for MakeMyTrip (see a recent VCCircle interview with Aggarwal on his MakeMyTrip call and the Indian Internet market).


Caris & Co.expects a positive impact from year on year growth in airline ticketing and hotel transactions as well as the modest hike in average airfares and increasing ADRs.

Airline ticketing are expected to have grown 60% year on year and hotels and packages transactions 83% year on year in the September quarter.

In a note sent across to the media, he calculates gross bookings in the September quarter to be up 72 percent year on year and 3 percent quarter on quarter to $180.3 million. Air tickets transactions are estimated to rise 25 percent quarter on quarter to 738,000 and hotel and packages transactions fall 17 percent quarter on quarter to 41,000.

Net revenue margins are estimated to fall year on year to 8.5%. Airline tickets would contribute $11.9 million net revenue while hotels and packages contribute $2.9 million to the September earnings.

Last year, the December quarter saw 11% year on year growth in number of airline passengers on domestic flights compared to average growth of 24% year on year in the September quarter and 21% year on year in the June quarter.

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