MakeMyTrip reported continued growth on Tuesday in defiance of India’s challenging domestic air travel market.

India’s air market has been in turmoil. In April, Jet Airways India ceased operations, grounding its 124 aircraft. The Indian government also spent recent months reviving its attempt to sell Air India, whose troubles have continued.

But the Indian online travel company didn’t let the upheaval hold it back.

During the three months ending June 30, the group boosted its adjusted revenue by 21 percent, year-over-year, to $198.5 million. Adjusted revenue numbers reflect a more accurate picture than the unadjusted ones, according to Skift Research, because last year MakeMyTrip switched to a new national accounting standard without restating past performance. The adjusted numbers also smooth out swings in currency shifts between the Indian rupee and the U.S. dollar during the period.

MakeMyTrip Group’s revenue rise was mainly due to a 14 percent rise in its air ticketing revenue, to $44.6 million for the period. Experts chalked up some of that gain in selling plane tickets to a boom at IndiGo, a carrier with now about half of India’s domestic air market.

Some Disappointment

MakeMyTrip Group remains unprofitable. During the quarter, the company narrowed its operating loss to $42.9 million, which was an improvement of $2.6 million when compared with a loss of $45.5 million suffered during the same period a year earlier.

During a call with analysts on Tuesday, MakeMyTrip Group executives touted a multi-quarter decline in operating losses. The reduction of losses year-over-year by $2.6 million is partly explained by a $4.3 million reduction in promotion expenses, year-over-year. That suggests MakeMyTrip was able to keep its marketing costs under control despite a notoriously fierce price war in India’s domestic online travel market.

But the company hasn’t grown its more profitable revenue fast enough. MakeMyTrip Group boosted its revenue from selling hotels and packages by only 7 percent to $68.5 million during the quarter. That result disappointed some investors hoping for quicker growth from such products, which tend to have higher commissions and profitability.

Gross margins on hotel and travel packages can be between 10 and 25 percent compared with less than 10 percent from air ticket bookings, according to Satish Meena, an analyst at research firm Forrester.

MakeMyTrip Group’s incremental marketing and promotion spending has repeatedly surpassed net revenue growth since its 2016 financial year, said Arya Sen, equity analyst at investment bank Jefferies, in a recent research note.

Looking Ahead

More positively, MakeMyTrip bumped up its intercity bus ticketing revenue by 26 percent to $18.3 million, showing the company’s growing traction in that sector since its acquisition of the RedBus booking brand as part of its merger with the larger Ibibo Group completed in 2017.

The company had $186 million in cash at the end of June to manage its burn rate. In April, Ctrip.com, China’s largest online travel group, gave a vote of confidence by saying that it would raise its stake in the company to 49 percent of the outstanding shares. During a call with analysts, MakeMyTrip executives didn’t elaborate on anything new with the Ctrip interest in their company other than to reaffirm that more strategic cooperation would happen.

Patience may be needed. At current rates, MakeMyTrip may not reach consistent profitability until 2022, according to a recent research note by Morgan Stanley.

Subscribers to Skift Research can see our teardown of MakeMyTrip Group’s financials.

Photo Credit: A view inside the main MakeMyTrip offices in Gurgaon, India. On Tuesday the online travel agency group reported its latest earnings. MakeMyTrip