MakeMyTrip Transaction Growth May Be Lower This Year

With data showing that a long-rumored slowdown in private funding for Indian e-commerce is actually happening, there’s been a shift in focus from growth to profitability in most e-tailers. In a note to investors Tuesday, Jefferies analysts laid out their expectations for how this change in focus may impact MakeMyTrip Limited MMYT.

MakeMyTrip is an online travel company that offers travel related products and services in India and internationally. The company reported 300 percent standalone hotel transaction growth in fiscal year 2016, 500 percent growth in Q4, but Jefferies believes that type of growth won’t be seen again this year.

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Cash burn is a term for a new company having to “burn” through its cash or capital in pursuit of a producing a positive cash flow. Jefferies said private funding for Indian e-commerce is down 50 percent year-over-year and therefore expects a high cash burn rate to continue for MakeMyTrip.

First quarter results are forthcoming on July 27, and standalone hotel transactions are a key metric Jefferies advised investors to be on the lookout for. The analysts noted the company gave revenue growth guidance for fiscal year 2017, but the company has so far refrained from giving guidance on standalone hotel transactions growth.