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NEW YORK (TheStreet) -- Shares of MakeMyTrip (MMYT) - Get MakeMyTrip Ltd. Report are surging by 28.62% to $21.12 on heavy trading volume early Thursday afternoon, as Ctrip (CTRP) announced that it will invest $180 million in the company.

The Indian online travel company has allowed China-based Ctrip to acquire shares in the open market, according to a company statement.

Ctrip could own up to 26.6% of MakeMyTrip's outstanding shares. The travel company can also appoint a director to MakeMyTrip's board when the investment is completed, the company added.

"We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial," Deep Kalra, Founder and Group CEO of MakeMyTrip said in a statement.

Ctrip is a travel service provider for hotel accommodations, transportation ticketing services, packaged tours and corporate travel management in China.

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About 768,672 of MakeMyTrip shares were traded so far this afternoon, well above the stocks average of 155,396 shares per day.

Shares of Ctrip are down 3.95% to $46 on Thursday afternoon.

Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate MAKEMYTRIP LTD as a Sell with a ratings score of D. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 157.5% when compared to the same quarter one year ago, falling from -$4.75 million to -$12.22 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, MAKEMYTRIP LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.21%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 163.63% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • MAKEMYTRIP LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MAKEMYTRIP LTD continued to lose money by earning -$0.43 versus -$0.55 in the prior year. For the next year, the market is expecting a contraction of 5.6% in earnings (-$0.45 versus -$0.43).
  • The revenue growth significantly trails the industry average of 38.0%. Since the same quarter one year prior, revenues slightly increased by 3.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • You can view the full analysis from the report here: MMYT