Thomas Cook (India) Limited

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.

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.

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 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 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.

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.

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.