Thomas Cook (India) Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Thomas Cook (India) Limited reported a resilient Q3 FY26, with consolidated total income growing 5% and PBT (excluding one-time items) up 20%. The Foreign Exchange segment showed strong margin expansion, while Sterling Holiday Resorts delivered record performance. The Travel segment faced headwinds in certain international markets and domestic B2C, but overall EBIT margins for the segment improved in Q3. The company's net cash position significantly strengthened, and management expressed confidence in achieving double-digit growth for FY27.

Highlights

  • Consolidated total income for Q3 FY26 grew 5% to INR21,866 million.

  • Consolidated PBT for Q3 FY26, excluding one-time impact, improved by 20%.

  • Foreign Exchange segment EBIT increased 10% to INR316 million, with EBIT margins expanding to 41.5% from 38.7% last year.

  • Sterling Holiday Resorts achieved its highest ever Q3 performance with revenue growing 10% Y-o-Y to INR1,568 million and PBT growing 11% Y-o-Y to INR426 million.

  • DEI reported a 5% growth in Q3, with EBITDA increasing by 38% and EBIT by 42% compared to Q3 2025.

  • Net cash position improved to INR780 crores as of December '25, up from INR405 crores in December '24.

Concerns

  • Consolidated PBT for 9M FY26 stood at INR2,852 million, a decline from INR2,936 million in the same period last year, impacted by a one-time non-recurring charge of INR171 million.

  • Travel segment's 9-month EBIT margins stood at 3.7% versus 3.9% last year.

  • B2C section revenue declined 6% Y-o-Y in Q3 FY26, influenced by calendar shifts and evolving customer preferences.

  • Muted demand in Middle East (geopolitical tension) and US (travel advisories) impacted DMS performance.

  • Domestic travel was impacted by air turbulence and the advancement of Durga Puja shifted some festival demand to the previous quarter.

Key financials

3 periods

Q3

  • Consolidated Total Income
    21,866 Mn
    YoY +5%
  • Other Income
    400 Mn
    YoY +81.8%

Q3, ex-one-time

  • Consolidated PBT
    897 Mn
    YoY +20%

9M

  • Consolidated Total Income
    67,523 Mn
    YoY +8%
  • Consolidated PBT
    2,852 Mn
    YoY -2.8%
  • One-time Charge
    171 Mn
  • Other Income
    1,240 Mn
    YoY +40.9%

What they filed

Q1 FY27: revenue down 13.1%, net profit down 13.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,004 2,061 1,969 2,408 2,074 +3%2,146 +4%1,771 −10%2,092 −13%
EBITDA125 116 98 127 108 −14%114 −2%78 −20%93 −27%
Net profit72 47 66 74 71 −1%45 −4%31 −53%64 −14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Foreign Exchange
    316 Mn EBIT (Q3)41.5% EBIT Margin (Q3)25% Retail Sales Growth (Q3)39% Education Segment Growth (Q3)11% Holiday Segment Turnover Growth (Q3)1.7× App Engagement Growth (Q3)2× App Bookings Growth (Q3)
  • Travel and Travel-related
    3.1% EBIT Margin (Q3)1,979 Mn EBIT (9M)3.7% EBIT Margin (9M)5% B2B Business Growth (Q3)9% International DMS Portfolio Growth (Q3)21% Corporate Travel Revenue Growth (Q3)17% Corporate Travel Revenue Growth (9M)12.4% Air Revenue Growth (Q3)19.8% Non-Air Transaction Growth (Q3)11.2% Hotel Transaction Growth (Q3)29.2% Car Transaction Growth (Q3)5% MICE Segment Growth (Y-o-Y)-6% B2C Revenue Growth (Q3)15,592 Mn B2C Revenue (9M)
  • Sterling Holiday Resorts
    1,568 Mn Revenue (Q3)561 Mn EBITDA (Q3)426 Mn PBT (Q3)36% EBITDA Margin (Q3)3,243 Mn Cash and Investments346 Mn Operating Free Cash Flow (Q3)4,047 Mn Revenue (9M)33% EBITDA Margin (9M)32% Operating Fee Cash Flow (9M)77 Network Resorts3,705 Keys607 Rooms Added Y-o-Y17% Room Nights Available Growth22% Room Nights Sold Growth68% Occupancy60% Income from Managed Resorts Growth₹6,976 ARR17% RevPAR Growth14% F&B Growth16% Rooms Growth65% Occupancy Across Enterprise1,000 Mn Sterling ONE Contribution (9M)
  • DEI
    565 Mn Dubai Revenue (December)5% Overall Growth (Q3)38% EBITDA Growth (Q3)42% EBIT Growth (Q3)

Capital allocation

high confidence
  • Debt Gross ₹220 Cr · Net cash ₹780 Cr
    Debasis Nandy:: Yes. So total cash is about INR2,500 crores, out of which excluding the float, you have around INR1,000 crores. And that's the gross amount we have. And there are about INR220 crores of debt on our books. So, if you net that off, it's close to about INR780 crores.
  • Liquidity Cash ₹2,500 Cr Total cash is about INR2,500 crores, of which INR1,500 crores is float from Foreign Exchange business. Company's own cash on hand (excluding float) is INR1,000 crores.
    Debasis Nandy:: Yes. So total cash is about INR2,500 crores, out of which excluding the float, you have around INR1,000 crores. And that's the gross amount we have. And there are about INR220 crores of debt on our books. So, if you net that off, it's close to about INR780 crores.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY27 · High confidence 10%
    But if you look at our macroeconomics, GDP growth at about 7-7.5%, currency by about 2-3%, I think 10% is a given. So, a double-digit growth, I think from a business perspective, seems very realistic. And I think we will definitely be gunning for that kind of a growth going forward in FY 2027.

    — Mahesh Iyer

Profitability

  • Financial Services Margin Profitability · next financial year · High confidence 40-plus percent
    Yes, Mr. Varma. We will continue to be in that trajectory. I think that's what we have been delivering year-on-year. And I don't think there's anything that should be less from that part. The 40-plus percent will see.

    — Mahesh Iyer

  • Travel Segment Trajectory Profitability · Medium confidence 4-plus percent
    But broadly, the guidance that we have given is that we will continue our trajectory on the 4-plus percent as far as the Travel segment is concerned.

    — Mahesh Iyer

  • Sterling EBITDA Margin Profitability · High confidence 32% to 35%
    That's number three is the margins will continue to remain in that range - margins between 32% to 35% EBITDA, depending on the seasonality that we are in.

    — Vikram Lalvani

Capacity

  • Sterling Hotels/Resorts Expansion Capacity · annually · High confidence approximately 15
    If we've seen in the last 2 years, we've been ramping approximately 15 hotels and resorts a year. Even in 2025, we did about 15 in a year.

    — Vikram Lalvani

What to watch in Q4 FY26

Consolidated Revenue Growth

FY27
Current 5% (Q3 FY26)
Target Double-digit growth (10%)

Why it matters

To confirm the company's ability to achieve its stated growth target in line with macroeconomic projections.

So, a double-digit growth, I think from a business perspective, seems very realistic. And I think we will definitely be gunning for that kind of a growth going forward in FY 2027.

Risks & concerns

  • Geopolitical tensions and travel advisories

    medium

    Subdued growth in Middle East (geopolitical tension) and US (travel advisories) impacted DMS performance.

    Two of our units and namely that was in U.S.A. and Middle East, which is Desert Adventures that we operate in the Middle East market, we had subdued growth. And obviously, in the case of Middle East, it was more the macro driven by the geopolitical tension that we were going through. So, the demand in that market was much lower. And AlliedTPro that we operate in the U.S., and you know there was many advisories that were issued. And hence, Travel to that market was affected by the weak sentiments.

    Management acknowledged

  • Rupee depreciation impacting European travel affordability

    medium

    Sharp rupee depreciation against the euro makes European holidays expensive, requiring product recalibration.

    Long haul, specifically Europe remains slightly sluggish owing to the steep rupee depreciation against the euro. We continue to evaluate our Europe products to make them far more affordable to our customers and continue our investments in marketing through digital and print medium.

    Management acknowledged

  • Domestic air turbulence and seasonality

    low

    Domestic market remained subdued in December due to air turbulence; Durga Puja shift impacted B2C revenue.

    If I have to comment on the B2C business, the domestic market remained subdued and specifically in the month of December got impacted because of the air turbulence that we saw. Whereas on the International segment, we actually saw a shift from the long haul to short haul.

    Management acknowledged

  • One-time Labour Code impact

    low

    One-time impact of new Labour Code on PBT due to retirals, amounting to INR171 million.

    Consequently, our PBT for Q3 stood at INR897 million, which improved by 20%, which excludes the onetime impact of the new Labour Code. As you are aware, this is a new Labour Code implementation, which had to happen and the impact that we have taken is on account of retirals, which had to be taken through our P&L statement.

    Management acknowledged

Q&A highlights

4 direct
Outstanding prepaid FX cards and float amount Direct
From a card perspective, there are roughly about close to 200,000-plus cards that are outstanding there. The total float that we have on our books as of December exceeds INR1,500 crores.

Provides specific operational metrics for the Foreign Exchange business, which contributes significantly to other income.

Asked by Anil Shah

Company's own cash on hand and net cash position Direct
So total cash is about INR2,500 crores, out of which excluding the float, you have around INR1,000 crores. And that's the gross amount we have. And there are about INR220 crores of debt on our books. So, if you net that off, it's close to about INR780 crores.

Clarifies the company's strong liquidity position and low net debt, indicating financial health and capacity for future investments.

Asked by Anil Shah

Reasons for subdued Travel segment performance Partial
Two of our units and namely that was in U.S.A. and Middle East, which is Desert Adventures that we operate in the Middle East market, we had subdued growth. And obviously, in the case of Middle East, it was more the macro driven by the geopolitical tension that we were going through. So, the demand in that market was much lower. And AlliedTPro that we operate in the U.S., and you know there was many advisories that were issued. And hence, Travel to that market was affected by the weak sentiments.

Explains the external macro and geopolitical factors impacting specific international travel markets, providing context for the segment's moderated growth.

Asked by Anil Shah

Impact of MAT announcement and shift to new tax regime Direct
So, the government has now mandated that all companies have to move to the new tax regime if they want to utilize the MAT. And therefore, we will also do so. So effective '26-'27 we'll move into that new regime. ... That is a positive for the company.

Indicates a future positive impact on the company's earnings per share due to tax optimization from moving to the new tax regime.

Asked by Mukul Varma

Capital allocation priorities for the INR1,000 crores cash Partial
We keep looking, evaluating opportunities. But currently, our investments are directed on technology and upscaling to the mandate of getting customer obsessed and making the journey seamless for them. But if there are more opportunities that will come our way, we will definitely look at it. But currently, there are no conversations around either any kind of disbursement of cash to shareholders or for that matter, any acquisition.

Clarifies the company's current capital allocation strategy, prioritizing internal investments in technology and customer experience over immediate M&A or shareholder returns.

Asked by Mukul Varma

Discrepancy in forex segment revenue growth (2%) vs sales growth (Retail 25%, Education 39%, Holiday 11%) Direct
The 25% growth in the Education segment or the growth in the Leisure segment refers to the sales growth. Whereas what's reported in the segment is the revenue growth, the revenue that we make on those sales, the margin multiplied by the sales. That's the value that you see here. Now this also includes the corporate side of it where we haven't seen the growth. Corporate segment during the current quarter was subdued. So obviously, the volume was a little lower, and we also saw a slight bit of margin pressure on the corporate segment.

Explains the difference between volume growth and revenue growth in the forex segment, highlighting the impact of corporate segment's subdued performance and margin dynamics.

Asked by Ravi Shah

Impact of TCS reduction on Q1 bookings Partial
A little too early. As you know, the budget gets effective only 1st April 2026. And so very early to kind of gauge the kind of impact. But yes, I definitely can say that it's a welcome measure because it leaves a lot more cash in the hands of people, allows them to not wait for it to come after filing their returns and also kind of cushions to some shock that comes from the rupee depreciation. So, I think it's a welcome step, and I would think that it should help spur some consumer momentum on that one.

Management acknowledges the positive potential of the TCS reduction but indicates it's too early to quantify the impact on Q1 bookings, suggesting this is a future watch item.

Asked by Mukul Varma

3 min read 7 chapters

Detailed narrative

Consolidated Financial Performance Overview

Thomas Cook (India) Limited reported a consolidated total income of INR21,866 million for Q3 FY26, marking a 5% year-on-year growth. For the nine-month period, total income increased by 8% to INR67,523 million. The company's profit before tax (PBT) for Q3 stood at INR897 million, improving by 20% when excluding a one-time impact related to the new Labour Code. However, 9M FY26 PBT was INR2,852 million, slightly down from INR2,936 million last year, primarily due to a one-time non-recurring charge of INR171 million for an ex-gratia payment.

Foreign Exchange Segment Strength

The Foreign Exchange segment demonstrated robust performance, with EBIT increasing by 10% to INR316 million in Q3 FY26. This led to an expansion in EBIT margins to 41.5% from 38.7% in the previous year, reflecting disciplined execution and operating leverage. Retail sales in this segment grew 25% Y-o-Y, driven by a 39% increase in the Education segment and an 11% improvement in Holiday segment turnover. Digital adoption is growing, with app engagement up 2.7x and app bookings growing 3x in the current quarter.

Travel Segment Performance and Headwinds

The Travel and Travel-related segments saw mixed results. The B2B portfolio, comprising 80% of the segment, grew 5% in Q3, with international DMS portfolio growing 9% Y-o-Y (Asian Trails up 14%, Private Safaris up 41%, East Africa up 20%). Corporate Travel revenue increased 21% in Q3. However, the Middle East and US markets faced subdued demand due to geopolitical tensions and travel advisories. The B2C section experienced a 6% Y-o-Y decline in Q3 revenue, influenced by calendar shifts and a preference for short-haul destinations, which saw a 23% increase over nine months compared to a 5% increase in long-haul.

Sterling Holiday Resorts' Record Quarter

Sterling Holiday Resorts delivered its strongest quarterly performance, with revenues growing 10% Y-o-Y to INR1,568 million and PBT increasing 11% Y-o-Y to INR426 million. EBITDA margin was sustained at a healthy 36%. The company remains debt-free, with cash and investments at INR3,243 million, up 54% from last year. Operating free cash flow for Q3 grew 52% Y-o-Y to INR346 million. Sterling expanded its network to 77 resorts with 3,705 keys, adding 607 rooms year-on-year, and saw RevPAR grow 17% Y-o-Y.

DEI Performance and Strategic Initiatives

DEI reported a 5% growth in Q3, with Dubai achieving its highest-ever revenue of over INR565 million in December. EBITDA increased by 38% and EBIT by 42% compared to Q3 2025, driven by improved top-line performance and cost efficiencies. The company signed two new partnerships in Q3 for Saudi Arabia (Six Flags) and UAE (Haribo, Happy World) and renewed key partnerships. Full implementation of the WeC system is expected by Q1 2027, with benefits anticipated in Q2 2027.

Impact of Budget Announcements

Management highlighted the positive implications of recent budget announcements. The rationalization of TCS on overseas tour packages to a flat 2% (from 5% and 20%) provides immediate relief and more cash for travelers, potentially spurring discretionary spending. The reduction in TCS to 2% on Education and Medical categories under LRS will ease financial burdens. Additionally, capacity building initiatives to upskill 10,000 tourist guides will enhance service quality and visitor experience.

Capital Structure and Liquidity

The company maintains a strong liquidity position, with total cash at INR2,500 crores. Excluding the float from its Foreign Exchange business (INR1,500 crores), the company's own cash on hand is INR1,000 crores. With gross debt of INR220 crores, the net cash position stands at INR780 crores, a significant increase from INR405 crores in December 2024. The long-term ECLGS debt of INR85-90 crores has a lock-in period but will be paid off within the next two years, while other debt relates to overseas supplier working capital.

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