About the Company

Thomas Cook is one of India’s oldest companies which was established in 1881. It is an integrated travel and travel related financial services company. They provide a wide range of services from packaged tours and forex services to visa support and travel insurance. Thomas Cook has been credited with a number of innovations in the travel industry, which include the world’s first packaged tour, first prepaid hotel, first-holiday brochure and even the conceptualization of the first traveler’s cheques.

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Q3 2020 Updates

Financial Results & Highlights

Standalone Financials (In Crs)
Q3FY20 Q3FY19 YoY % Q2FY20 QoQ % 9MFY20 9MFY19 YoY%
Sales 436.76 442.82 -1.37% 553.45 -21.08% 1939.51 1936.47 0.16%
PBT 6.72 -11.8 156.95% 0.24 2700.00% 61.73 58.3 5.88%
PAT 6.67 -13.8 148.33% 1.07 523.36% 41.36 30.74 34.55%


Q3FY20 Q3FY19 YoY % Q2FY20 QoQ % 9MFY20 9MFY19 YoY%
Sales 1757.88 1569.35 12.01% 1746.35 0.66% 5839.27 5280.91 10.57%
PBT 18.17 21.64 -16.04% -4.15 537.83% 55.3 75.5 -26.75%
PAT 10.03 4.98 101.41% -23.88 142.00% 2.23* 55.14 -95.96%


Detailed Results

  1. Consolidated Q3 revenues grew 12% YoY while 9M revenues grew 11% YoY.
  2. Consolidated PBT fell 16% YoY mainly due to delays in invoicing of the inbound business due to the demerger exercise. This is expected to be normalized in the next quarter.
  3. The gross margins across different travel segments is:
    • Outbound: 15%
    • Inbound: 28%
    • MICE: 11%
    • Domestic: 23%
    • Corporate Travel: 8%
    • DMS: 14%
  4. The MICE segment has consolidated revenue growth of 19% YoY.
  5. Despite the troubled times for the Hong Kong region, the Hong Kong Outbound operations registered EBT growth of 121%.
  6. The DMS segment had a revenue growth of 9% YoY.
  7. The Forex business showed good revenue growth of 13% YoY while EBIT grew 42% YoY.
  8. The Thomas Cook Borderless Prepaid Card sales grew 49% YoY while the load value grew 47% YoY to $ 133 million.
  9. DEI reported revenue of Rs 170 Cr and an EBIT of Rs 10 Cr.
  10. The company remains financially strong with cash and bank deposits balances of Rs. 1413.7 Cr as of 31st Dec 2019.
  11. Thomas Cook launched Bollywood Blockbuster Vacations – unique group tours aimed at India’s movie enthusiasts featuring destination made famous by Bollywood hits.
  12. SOTC launched “Around the World in 70 days” a special holiday spanning 7 continents to commemorate its 70th anniversary.
  13. In Sterling Resorts, revenue from operations grew to Rs 75,3 Cr from 69.7 Cr last year while occupancy rate remained stable at 68% in 9MFY20. The ARR remained steady at Rs 4519 in the same period.

Investor Conference Call Highlights

  1. The Management has confirmed that the company’s operations in South East Asia are facing headwinds from the onset of the coronavirus.
  2. On an EBITDA level, the company has seen a growth of 43% YoY to Rs 80.1 Cr in Q3. Overall EBITDA margin has improved to 100 bps to 4.6% in the current quarter.
  3. Membership sales of Sterling Resorts have risen 53% YoY to Rs 33.3 Cr in Q3. The number of rooms has also gone up to 930 units from 752 units earlier.
  4. The management aims to open more resorts under the management contract scheme involving zero capex from the company.
  5. The PAT for the Sterling business has become negative because of the frontloading of all expenses while only 4% of revenue is booked in the first year. This leads to a temporary phenomenon where the more membership sales the company makes, the more negative the PAT becomes.
  6. The management has clarified that the company is debt-free at the consolidated level and all the debt is in the subsidiaries according to each one’s specific requirements.
  7. The total external debt for the company is at Rs 356 Cr.
  8. The management has clarified that the bank charges of Rs 12.9 cr in the quarter is mainly due to a variety of charges that the company incurs in its forex and card operations like bank charges, MDR charges, etc.
  9. The management has reassured that the cash in the company’s books does not sit idle and is mostly used to act as a float for the BPC cards and as foreign currency fixed deposits.
  10. The average unit realization in the vacations business has gone up 10% YoY. In this, an increase of around 6% stems from the price increase and the rest is from the increasing number of upgrades in vacations.
  11. The impact from the delayed invoicing from the inbound business for the quarter is around Rs 20 Cr.
  12. In DEI, the company has acquired new sites of Dubai Frame, Dubai Aquarium and Dubai Ice Rink. The company has also gotten contracts with Atlantis Bahamas and Universal Studios Beijing. The run-up in FY21 is expected to be around $ 40 million given the current pipeline.
  13. The management is expecting a 7-8% growth in the forward bookings for the summer in Q2 next year.
  14. The management remains optimistic about the company’s prospects going forward despite the headwinds in the travel industry like coronavirus which have yet to be assessed fully.
  15. The management is also optimistic that once sentiment and growth come back to the travel industry, the company can easily clock 15-20% growth momentum given its positioning and the easy payments plan it has launched.

Analyst’s View

Thomas Cook is the biggest travel company in India. They have been innovators in the sector for more than a century now. The company has shown good resilience despite setbacks to the travel industry from the Jet Airways Fiasco and the demise of Cox&Kings. The core businesses of vacations, forex and MICE have shown good growth and resilient performance despite prevailing headwinds. The Sterling Resorts business is also doing good in terms of expansion and rationalizing ARR and membership growth. Given its impressive pipeline, DEI is also expected to be a good revenue generator for the company going forward. It remains to be seen how the advent and aftermath of coronavirus affect the company and the travel industry in general. Nonetheless, given its resilient performance despite prevailing industry headwinds and its seemingly low valuation post the demerger with Quess Corp, Thomas Cook seems to be a good travel industry stock to keep an eye out for.


Q2 2020 Updates

Financial Results & Highlights

Standalone Financials (In Crs)
Q2FY20 Q2FY19 YoY % Q1FY20 QoQ % H1FY20 H1FY19 YoY%
Sales 552.22 579.7 -4.74% 947.26 -41.70% 1499.49 1482.7 1.13%
PBT 3.39 13.45 -74.80% 57.69 -94.12% 61.08 71.75 -14.87%
PAT 2.21 8.98 -75.39% 36.6 -93.96% 38.82 46.65 -16.78%


Consolidated Financials (In Crs)
Q2FY20 Q2FY19 YoY % Q1FY20 QoQ % H1FY20 H1FY19 YoY%
Sales 1747.59 1611.14 8.47% 2335.7 -25.18% 4083.29 3711.55 10.02%
PBT -3.42 -11.86 71.16% 41.63 -108.22% 38.21 53.86 -29.06%
PAT 4.26* -6.24** 168.27% 20.73 -79.45% 25 63.45 -60.60%

*Contains a total tax expense of Rs 19.73 Cr

**Contains a total tax expense of Rs 2.73 Cr

Detailed Results

  1. Standalone revenues declined 5% YoY while consolidated revenues rose 8.5% YoY.
  2. Revenue breakup among segment is as follows:
    • Forex: Up 4.1% YoY
    • Holiday: Down 2% YoY
    • E-business: Up 23% YoY
    • MICE: Down 4% YoY
  3. The gross margins across different travel segments is:
    • Outbound: 12%
    • Inbound: 28%
    • MICE: 8%
    • Domestic: 17%
    • Corporate Travel: 8%
    • DMS: 15%
  4. DEI reported revenue of Rs 138.4 Cr and a PBT of Rs 3.8 Cr.
  5. The company remains financially strong with cash and bank deposits balances of Rs. 1088.3 Cr as of 30th Sep 2019.
  6. In Ithaka, in Q2 more than 300 trips were booked and 5600 trips were planned.
  7. Conversion from planning to booking has improved in Q2FY20 to 16% from 12% in Q1FY20.
  8. Thomas Cook Borderless Prepaid Card sales grew 61% YoY.
  9. Travel Services segment was muted due to a surge in airfares both domestic and international and political unrest in Hong Kong.
  10. Overall market sentiment in the B2C segment suffered due to the closure of Cox & Kings.
  11. In Sterling Resorts, membership sales grew 50% while the occupancy rate increased 5% YoY to 69% in Q2. The ARR remained steady at Rs 3705. EBITDA Loss for Q2 was reduced to Rs 7.2 Cr vs 17.1 Cr last year.
  12. Sterling Resorts added 150 rooms to inventory and they plan to add another 120 rooms in the next 2 quarters.

Investor Conference Call Highlights

  1. The management has acknowledged that the last quarter was very difficult for the company and there were a lot of headwinds due to industry events like the closure of Cox & Kings and Thomas Cook PLC which were out of the company’s hands.
  2. Consolidated losses for the group from operations declined to Rs 3.4 Cr from Rs 11.9 Cr previously which showcases the company’s resilient performance in such a difficult period.
  3. Domestic air traffic for the Jan-Sep period in FY20 grew only 3% YoY while in H1, international air traffic actually declined 1% YoY. This showcases the demand slowdown in both domestic and international markets.
  4. The B2C business grew >8% with stable gross margins.
  5. The forex business has started a few counters in Bangalore airport where they have recognized some of the costs upfront for this.
  6. The operating performance in forex business after taking out these upfront costs is about 14%.
  7. Sterling Resorts has become EBITDA positive in H1 with Rs 4 Cr vs an EBITDA loss of Rs 15.6 Cr in the same period last year. The entity has also become cash positive in H1 with a cash flow of Rs 8 Cr in the period vs a negative cash flow of Rs 1 Cr in the same period last year.
  8. The management has stated that they expect the Kuoni Group to start generating profits from next year onwards.
  9. DEI has also gotten many contracts which come into operation from next year. Some of them include 3 resorts in the Bahamas, Universal Studios Beijing, and Dubai Mall. DEI is in final talks for a contract with Disney Shanghai as well. These should provide a good revenue runway from next year onwards.
  10. The management has stated that it is still too early to approach Cox & Kings customers given the big breach of trust that took place and they feel that they require some time to move on this now.
  11. The management has guided that they should have a modest growth of 8-10% in volumes for FY20.
  12. The management has stated that PBT growth will be coming from the turnaround of their recently acquired businesses and their upcoming domestic segments like e-business.
  13. The company has integrated all of its back end operations for all entities into single units to reduce redundancies and save costs.
  14. The DMS business had a total loss of Rs 9 Cr in Q2.
  15. The management believes that the damage caused by Jet and Cox&Kings is still fresh and it will take some time for the confidence to come back to the market.
  16. The company is thus trying to capitalize on the slack by these players and deliver in the next summer season.
  17. The management has explained that the major portions of finance costs and common costs which were seen to have increased are mainly due to change in accounting standards.
  18. The company has a consolidated debt of Rs 403 Cr currently.
  19. The company keeps most of the cash float for the company in the form of fixed deposits in the currency that the cash has been received in. This also acts as a natural hedge for the company.
  20. Sterling Resorts has a net debt of Rs 59 Cr.

Analyst’s View

Thomas Cook is the biggest travel company in India. They have been innovators in the sector for more than a century now. The company has shown good resilience despite setbacks to the travel industry from the Jet Airways Fiasco and the demise of Cox&Kings. At such a time, when the core holiday business suffered, the other businesses like forex, MICE and corporate travel have risen to fill the void and help the company keep revenues up. The bankruptcy of Cox & Kings has freed up some space in the incumbent travel market but it has also depressed market sentiment and consumer trust. It remains to be seen how fast will these sentiments recover and how Thomas Cook will capitalize on this opportunity. Nonetheless, Thomas Cook is a good stock to watch out for, particularly given their industry experience and their widely diversified sources of revenues.

Update from the Management on 25.11.2019: 6th December 2019 has been fixed as the record date for the purpose of determining the shareholders of TCIL who shall be entitled to receive the equity shares of Quess Corp in the process of Demerger. You may refer our previously quarterly updates on the same to know more.


Notes from Annual Report FY18-19

Management Discussion Analysis

Industry Overview

The global travel and tourism industry is witnessing an unprecedented growth. Driven by increasing disposable incomes, the proliferation of technology, larger awareness and a yearning for experience, travel has become more accessible and affordable in the recent past. This trend is expected to continue, and the growth momentum is expected to rise further.


In FY18, the travel and tourism industry added US$8.8 trillion to the world economy. For the eighth straight year, the industry has surpassed global economic growth levels. At 3.9%, it became the second-fastest-growing sector after manufacturing, contributing 10.4% to the world’s total economic activity in 2018. Regions including Oceania, Southeast Asia, India, and China contributed significantly to this growth. According to the World Travel & Tourism Council (WTTC), travel and tourism were responsible for 20% of all jobs created worldwide.


The industry is also expected to generate more employment going forward, with an estimated 100 million jobs to be created within the next ten years. By 2029, the total number of people working in the travel and tourism industry is expected to touch 421 million worldwide.


In India, travel and tourism holds an important place in economic contribution, employment generation and cultural exchanges. The country has been a major hub of tourism for decades, owing to its natural beauty and cultural and historic heritage. In recent years, trends such as ecotourism and health tourism have also gained ground in the country. With India emerging as an economic powerhouse, corporate travel also has augmented within the country.


Outbound travel from India has increased, supported by increasing disposable income and available packages. With regard to travel, there is a shift in the mindset of the consumers where it has transformed into a budgeted expense from previously being a discretionary spend. During 2018, travel and tourism grew by 6.7% in India, to generate US$247.3 billion. It accounted for 9.2% of the economy and generated 26.7 million jobs during the year. This level of travel-related activity in the country has placed it as the world’s eighth-largest contributor to travel and tourism GDP. The travel and tourism industry has also emerged as the third-largest forex earner for India.


In India, MICE (Meetings, Incentives, Conferences, Events) is an underpenetrated opportunity. While a late entrant, India’s MICE tourism earnings surpassed US$3.5 billion in 2018, with an 8% YoY growth. India’s outbound MICE tourism market is expected to generate more than two million outbound MICE tourists by 2020 and reach a US$ 9 bn size by 2025, according to MILT Congress.


The dominion of the internet and the rising number of online travel companies have helped in expanding the Indian travel industry and empowering the consumers. Established players with a traditional brick and mortar model have also ventured into the online space, realizing the larger potential of an omnichannel approach. According to Praxis, the online travel market in India is expected to touch US$13.6 billion in 2021, accounting for 43% of the total travel category in the country. This is more than double the market size of online travel in 2015.


India has emerged as the world’s third-largest travel and tourism-related investment destination. In 2018 alone, US$45.7 billion was invested in the sector, constituting 5.9% of national investment. Between 2000 and 2018, total foreign direct investment garnered by the sector was US$12 billion. The industry has also been helped by various policies and programs run by the Government of India to promote travel and tourism in India. Some of the prominent ones are:


  • E-Visa facility extended to 166 countries
  • Incredible India campaign 2.0
  • Adopt a Heritage Project
  • M visa (Medical visa) launched to promote medical tourism
  • Under PRASAD (Pilgrimage Rejuvenation and Spiritual Augmentation Drive) scheme, 25 religious sites have been identified for development
  • Launched ‘Swachh Paryatan Mobile App’ and 24×7 Tourist Helpline in 12 international languages
  • UDAN scheme to ensure low-cost flights for boosting regional connectivity
  • Tourist trains introduced to promote pilgrimage and heritage circuits
  • Seven-phase ‘National Highway Development Project’ formulated for boosting transport infrastructure
  • Project Mausam rolled out to establish cross-cultural linkages to revive historic maritime cultural and economic ties with 39 Indian Ocean countries


Within the next 10 years, contribution by tourism to India’s GDP is expected to be Rs 35 trillion or 9.6% of GDP. By 2029, 53 million Indians will be engaged by tourism or tourism-related activities. India still has a considerably small share of FTAs in the world’s international tourist arrivals, accounting for nearly 0.76% in 2017. The Government of India has set a target of increasing this share to 1% by 2020 and 2% by 2025.


The travel and tourism industry faces a temporary challenge from the airline sector. The industry was adversely affected earlier in H1FY19 due to the default of Jet Airways which led to a domino effect that affected the travel and tourism industry with the unavailability of flights and rising costs. At a larger level, it contributed to the nosediving of the stock market and unearthed the systemic issues in the airline industry. However, overall confidence of recovery remains in the background, aided by other airline carriers inducting more aircraft to their lines to meet the rising demand and in turn, rationalize the prices.


At an industry level, India is replete with established tour curators, operators, online travel aggregators and start-ups ready to cater to large demand. However, the industry is undergoing consolidation and there is a clear advantage for players who can sustain value and innovate with changing consumer needs.

Highlights of Various Business Divisions

Leisure Travel Outbound

The leisure outbound business caters to both, group and individual customers, traveling to foreign destinations from India and Hong Kong. TCL’s Hong Kong entity, Travel Circle International Limited (Kuoni), operates as the leading premium tour operator in Hong Kong with a focus on the high-end, niche market of all-inclusive group long haul leisure travel and business travel. During the year, the Hong Kong entity intensified its product differentiation efforts, service enhancements to sharpen its product expertise and revenue.

TCL is the leader in this segment in the top tier cities in India and is widening its presence across the Tier-II and Tier-III cities with dedicated offerings. Driven by robust and continued consumption, outbound leisure travel exhibited strong growth in the fiscal year.


Key Highlights


  • This division saw revenue growth of 14.8% YoY to Rs 2634 Cr in FY19.
  • The company partnered with the world’s longest-running daily family comedy show ‘Taarak Mehta Ka Ooltah Chashmah’ to connect with regional customers and promote itself in under leveraged markets in the country.


  • Introduced special Regional Tours series titled Avismarniya, Romanchak, Prekshaniya, Anandmay, Manmohak and Albelu to appeal to regional consumers with unique inclusions like our experienced local language speaking tour managers accompanying each group, local Indian cuisine on tour to add the comfort of home cooked food, brochures printed in local scripts, etc.
  • Launched Holiday Basket – an innovative EMI-powered holiday solution, offering travelers inflation-proof credit based holidays.
  • Undertook multiple innovations in SOTC like co-created holidays (partnering with customers to curate packages), SOTC On The Go to assist the customers in booking, SOTC Easy series, Super Holiday Sale- targeted for value-seeking travelers, Great Rail Journeys and Self Drive Holidays.


  • The company has identified the following key drivers for outbound leisure travel:
    • Social Media and Internet Penetration
    • Higher disposable income, burgeoning middle class
    • Emergence of discerning travelers
    • Young, millennial travelers with access and ability to travel
    • Promotions by International Tourism boards
    • Increased demand for frequent holidays either short or long haul
  • The company has also identified key focus areas for the segment like:
    • Expanding footprint in Tier-II and Tier-III cities
    • Feet on street/Holiday Consultants
    • Channel coherence across physical and digital distribution for an Omni channel play
    • Analytics for improved conversion and higher MROI (marketing ROI)
    • Technology-led innovation for mass customization
    • Industry leading Customer Experience (CX) for
      • To attract new audience
      • To improve customer intimacy and advocacy


Leisure Travel Domestic

TCL’s domestic leisure segment engages customers with personalized and group tour holidays within India, delivered by Thomas Cook and SOTC brands. The group incubated this segment and forayed into the domestic market in 2012, and since then has been successfully catering to the rapidly increasing growth of local tourism. It has leveraged emerging themes such as spiritual tourism, adventure and sports tourism, which have garnered large interest from the target audiences.


Key Highlights

  • The revenues from this segment grew 61% YoY to Rs 176 Cr in FY19.
  • This rise was led by higher focus on key markets and improved marketing, the overall results were reflective of the investments made towards the high potential travel segment.
  • The company identified new and unique concepts this year. Some of them are:
    • ‘Festival Tourism’ which combines spiritual elements with unique cultural experiences. This year, the Kumbh Mela and Holi proved to be significant drivers, with over 20% growth from the previous year

      • Smart weekend holidays, another significant trend popularized by millennials/ the DINKs-SINKs segment, and ad-hoc groups of friends and families
      • Adoption of various digital tools and technologies.


  • The company sees domestic tourism gaining momentum in the coming years with a rising aspiration for travel and with the increasing means of facilitating this aspiration.
  • The company sees significant opportunity arising from spiritual and heritage destinations, promoted under the PRASAD and HRIDAY schemes. Better air connectivity, facilitated by the UDAN scheme, rendering previously overlooked destinations attractive to travelers.


  • The company has identified some key focus areas for this segment. They are:
    • Increase visibility in Tier-II, III and IV markets
    • Curate tailored experiences led by emerging themes
    • Leverage social media to maximize customer reach.



Destination Management Specialists (India Inbound)


The India Inbound segment is a B2B business with a network of over 1,500 partners catering to customers belonging to 100+ nationalities who travel to India, Nepal, Bhutan and Sri Lanka. The UK, Russia, Germany, France, and USA are the primary source markets for TCIL’s Inbound business.


In India, Travel Corporation (India) Ltd (TCI) operates TCL’s inbound travel business and is one of India’s foremost and largest companies operating in this space. Thomas Cook operates under three brands – SITA, TCI and Distant Frontiers. The Inbound business is divided into two categories – a charter business based out of Goa and leisure. The leisure business is a bifurcation between FIT (Free Independent Travel) group, cruises, incentive, and education travel.


Key Highlights


  • The segment revenues declined slightly with a drop of 4% YoY in revenues at Rs 631.9 Cr in FY19.
  • The year saw an increased uptick in South Indian packages and concentration on technology augmentation for providing a better experience and management.
  • The company identifies this area as a significant opportunity area as despite crossing the 10 million mark in foreign tourist arrivals (FTAs) in 2017, in terms of global numbers it is very small at <1% of total FTAs each year.
  • The key focus areas for this segment are:
    • Emphasizing service quality aided by technology to automate processes such as itinerary creation and reduce the turnaround time for the customers.
    • Digitalizing processes for service delivery and interfacing by utilizing digital platforms and analytics to cater to real-time queries as well as predict customer behavior.
    • Training for assistance to provide effective consultancy to improve both turnaround time and service quality.
    • Expanding source markets and introducing new products to access underpenetrated source markets and establish partnerships.
    • Capturing demand from emerging destinations like Punjab, Gujarat, North East and the Buddhist Circle.


Destination Management Specialists (International Inbound)


TCL’s International DMS caters to inbound business outside India. The acquisition of entities from Kuoni Group in June 2017 has helped TCL attain a truly global stature. As a part of this acquisition, Thomas Cook added leading DMS entities like Asian Trails (APAC), Desert Adventures (MENA), ATM Australian Tours Management (Australia), Allied T Pro (North America), Private Safaris (Eastern Africa) and Private Safaris (Southern Africa) under its network, creating a seamless delivery capability for the Group’s B2B and B2C customers across 22 countries and five continents.

Key Highlights


  • The segment revenues grew an impressive 43% YoY to Rs 1627 Cr in FY19.


  • The company implemented many technology enhancements adopted to improve connectivity and operational efficiencies.


  • The company increased productivity by utilizing its Shared Service Centre in India.


  • The entities extended relationship network with several new partners with an aim to drive business operations.


  • TCL announced the commencement of its US operations in October ’18, through Allied T Pro to leverage the high-potential Business Travel segment to and from the Americas. The company obtained the accreditation by the Airline Reporting Corporation and necessary licenses to operate via Allied T Pro. The company’s US operations will offer travelers a range of services, including air, hospitality and surface transportation across its business and b-leisure segments.


  • Through the DMS entity Asian Trails, TCL set up an office in China to cater to the growing inbound segment in the region.


  • Going forward, the focus will be on building on the strengths of each acquired entity and guiding them into profitable, individual businesses under the Thomas Cook Group umbrella.

Meetings, Incentives, Conferencing, Exhibitions (MICE)

TCL is among the initial companies in the industry to decipher the growing opportunity in the MICE segment. In an industry that functioned with a standard setlist for en-masse corporate travel, Thomas Cook has ushered in specially curated consumer experiences that translated into business value for the customers.


The company has curated a series of best-in-class MICE programs. These include fascinating long-haul destinations (Iceland, Canada, Japan, Korea, Norway, New Zealand, Australia and USA, among others) and short hauls (Baku, Kiev, Morocco, Oman), coupled with distinctive elements such as snowmobiling, rafting in Norway, Formula 1 drives and 360-degree helicopter tours.


The Group today caters to over 150 corporates, and during the year, has successfully conducted over 250 MICE assignments.


Key Highlights


  • The revenues for the division grew 38% YoY to Rs 1114.6 Cr in FY19.


  • The division successfully executed one of the largest single end-to-end MICE assignments, by curating an experience for a group of over 2,000 people in Malaysia.


  • The company was selected as the Hospitality Partner for the Government of India for the ‘Khelo India School Games’ event, held in New Delhi. The MICE Event team coordinated and managed the hospitality requirements of over 30,000 people during the program.


  • The division also piloted MICE tours to innovative and less explored destinations such as Iceland and Azerbaijan.


  • The company expects this segment to grow a lot in the future and is looking to add several new and exotic destinations to its portfolio to retain and grow market share in this upcoming industry segment.


Business Travel

The Business Travel vertical caters to all business travel needs (ticketing and allied, non-air services such as hotel bookings) of more than 500 large, mid and small corporates. At the consumer end, TCL offers services under the Thomas Cook, SOTC and Kuoni Hong Kong brands.

Key Highlights

  • The segment revenues remained stable with a growth of 4% YoY to Rs 145.7 Cr in FY19.


  • The Group unified the backend services of Thomas Cook and SOTC, while the two brands continue to operate separately at the customer end. This Shared Service Centre continues to improve efficiencies within the segment with the integration of various functions.


  • The company added Click2Book this year, which is a web-based self-booking tool that provides a comprehensive suite of online services across flights, hotels, cars, visas, foreign exchange, and travel insurance.


  • The key focus areas for this segment are:
    • Building a portfolio by establishing long-term relationships with marquee clients/organizations
    • Expanding the non-air share of the business
    • Enhancing customer experience using digital platforms
    • Expanding operations and leveraging the high potential business travel segment to and from the Americas using TCL’s Destination Management Brand Allied T Pro.


Foreign Exchange

TCL leads the non-bank foreign exchange space in India. It is also the only non-bank AD II license holder to be a SWIFT member, with an in-house dealing room. The company was the first in the nonbanking category to issue its own prepaid travel card in India to facilitate better customer travel and convenience. The forex business is a combination of foreign exchange businesses of Thomas Cook (India) Limited, SOTC, TC Lanka, TC Mauritius Operations, and TC Forex and is one of the two core businesses of Thomas Cook Limited.


The division handles around 1.2 million transactions annually and is one of the largest exporters of banknotes globally. It has a network of retail outlets over 200 locations and 25 airport counters in India, Sri Lanka and Mauritius.


Key highlights


  • The revenues for this segment grew a modest 4% YoY to Rs 276.3 Cr in FY19. The EBIT grew 18% YoY to Rs 83.5 Cr emphasizing the improvement in operating efficiencies in this segment.


  • The company Introduced Forex Card Mobile App with real-time access to its Borderless Card account.


  • The company’s multi-currency Borderless Prepaid Card witnessed strong growth during the financial year and over 6,50,000 cards were sold since launch.


  • The load value on prepaid forex cards crossed US$ 400 million.


  • The company also launched of Contactless Payments across Prepaid Forex Cards that can be used for faster card transactions.


  • The company sees the following trends to come to pass which should enable this segment to grow:
    • An increased shift towards digital money
    • High focus on compliance and KYC
    • Forex growth to mirror its underlying driver of international travel


  • The company identifies the following key focus areas in this segment:
    • The retail segment to lead the path for future growth
    • Drive towards increasing the card penetration
    • Distribution footprint aided with online assisted model
    • Technology to add efficiencies with a focus on analytics at the forex front to understand customer behavior and improve serviceability.


Strategic Investments

DEI (Digiphoto Entertainment Imaging)

Thomas Cook assumed operating control of Digiphoto Entertainment Imaging, one of the world’s leading imaging solutions and services providers, through its holding company DEI holdings limited (DEI) in March 2019. TCL the acquisition of 51% stake in DEI at an EV of Rs 289 Cr.


Established in 2004, DEI is a technology-driven company with offices in Singapore, Dubai, Mumbai, Orlando, Hong Kong and Kuala Lumpur. DEI focuses on imaging solutions for the attractions industry with a robust end-to-end turnkey model by providing equipment, software, talent and operational expertise consultation to its business partners. DEI has a strong network of 120+ partners and is present at 250+ venues spanning 14+ countries (Singapore, UAE, Hong Kong SAR, Macau SAR, China, USA, Malaysia, Thailand, Indonesia, Mauritius, Maldives, Egypt, India and Kuwait), and completed 3.6 million transactions in 2018.


At the end of CY18, DEI had reported a revenue of US$ 65.9 million, with an operating profit of US$ 4.2 million and a free cash flow of US$ 5.3 million.


The company made this acquisition primarily due to the fact that souvenir imaging is an innovative space adjacent to the travel sector which enables Thomas Cook to enhance its portfolio and expand its width of offerings. The company is also looking to leverage synergies in common key markets/ outbound and inbound travel businesses to attract and expand customer base that both companies cater to.




Owned by Traveljunkie Solutions Pvt. Ltd, Ithaka is one of the world’s initial travel influencers driven personalized travel planning platforms, offering chat-based real-time travel advice. Thomas Cook has made a strategic investment in this new generation travel tech start-up has created a new avenue to extend and cater to the millennials.


Ithaka’s platform is currently present in 20 destinations across Europe, South East Asia and Central Asia covering most popular destinations like Thailand, Bali, Switzerland as well as unique and upcoming destinations like Turkey, Croatia and others. Ithaka’s travel influencer community has grown substantially over the past year and today has more than 180 influencers as part of its network.


Sterling Resorts

Sterling Holiday Resorts Limited (Sterling) is a Leading Holiday Lifestyle company with 2,278 rooms spread over 35 resorts. This also includes four resorts of ‘Nature Trails Resorts Private Limited’ – an adventure holiday company located in drive-to locations from Mumbai, Pune, Nasik and Surat.


Key Highlights


  • Revenue from operations for Sterling grew 3% YoY.


  • Resort occupancy was at 63%. The average room rent grew by 6.5% to Rs 3756 in FY19.


  • Sterling introduced over 200 Discoveries and Experiences across all its resorts that are unique in the destinations where the resorts are located.


  • In FY19, Sterling launched resorts in Jaipur, Mt.Abu and has plans to launch more destinations including Srinagar, Mysore and Gangtok.


Quess Corp

Quess Corp Limited is India’s leading business service provider, helping large and emerging companies manage their non-core activities across industries and geographies providing significant operational efficiencies.


Quess has a team of over 3,18,000 employees with presence in India, North America, South East Asia, and the Middle East across segments such as People Services, Technology Solutions, Facility Management, Industrials and Internet Business. Quess serves over 2,000 clients worldwide.


On a consolidated basis, Quess Corp reported revenue growth of 38% to Rs 8527 Cr; EBITDA growth of 31% to Rs 464.6 Cr and PAT margin stood at 3.01% growth of PAT to Rs 256.6 Cr. The Company

Thomas Cook is looking to demerge from Quess Corp and is waiting on regulatory approval for this action to go forward with the demerger plans.


Overall Financial Performance of Thomas Cook Limited

For the financial year ended March 31, 2019, on a standalone basis, the Profit before tax stood at Rs.39.5 Cr in FY19 as compared to Rs. 538.4 Cr in FY 18*

  • Total Income increased by 19% YoY to Rs. 2311 Cr from Rs. 1943 Cr.
  • Profit After Tax stood at Rs. 26.4 Cr in FY19 as compared to Rs. 531.4 Cr in FY18*.

* This is inclusive of a one-time accounting gain of Rs. 535 Cr on account of Quess Corp Limited stake sale.

The above drop in profits is mainly due to the removal of the financial contributions of Quess Corp.

On a Consolidated basis, PBT for the company was at Rs 57.3 Cr in FY19 as compared to Rs 6074 Cr in FY18*.

  • Total Income stood at Rs. 6718.7 Cr in FY19 as compared to Rs. 11411.5 Cr in FY18*.
  • Profit After Tax stood at Rs. 88.8 Cr in FY19 as compared to Rs. 6131.4 Cr in FY18*.

* results of Quess Corp Limited have been consolidated as a subsidiary up to February 28, 2018, and from March 2018, it has been reclassified as an associate with its share of profits being considered accordingly.


Analyst’s View

Thomas Cook India Ltd (TCIL) is the biggest travel company in India. They have been innovators in the sector for more than a century now. The company has shown good resilience in operations despite setbacks to the travel industry from the Jet Airways Fiasco and the Sri Lanka attacks. Recently, when the core holiday business faced some pressure, the other businesses like forex, MICE and corporate travel have risen to fill the void and help the company keep revenues up. The bankruptcy of Cox & Kings has freed up some space in the incumbent travel market which TCIL looks primed to capture. But it remains to be seen whether this incident will negatively affect sentiments for the entire industry and Thomas Cook. The erstwhile parent company of TCIL, Thomas Cook PLC has recently filed for bankruptcy. This news has created a panic in the investors’ community. Investors are dumping stock of TCIL assuming it to be a subsidiary of Thomas Cook PLC. However, if anyone digs at the shareholding pattern of TCIL, it is clear that Thomas Cook PLC has no relation with TCIL after it sold its stake to Fairfax holding in 2012.  TCIL continues to be a good stock to watch out for, particularly given its industry experience and widely diversified sources of revenues.


Q1 2020 Updates

Financial Results & Highlights

Standalone Financials (In Crs)
Q1FY20 Q1FY19 YoY % Q4FY19 QoQ %
Sales 947.26 903 4.90% 387.21 144.64%
PBT 57.69 58.29 -1.03% -22.89 352.03%
PAT 36.6 37.66 -2.81% -8.93 509.85%


Consolidated Financials (In Crs)
Q1FY20 Q1FY19 YoY % Q4FY19 QoQ %
Sales 2335.7 2100.4 11.20% 1437.8 62.45%
PBT 41.63 65.73 -36.67% -18.2 328.74%
PAT *16.42 **64.76 -74.64% -19.3 185.08%

   *Contains a total tax expense of Rs 25.2 Cr

**Contains a total tax expense of Rs 0.96 Cr

Detailed Results

  1. Standalone revenues rose 5% YoY while consolidated revenues rose 11% YoY.
  2. Revenue breakup among segment is as follows:
    • Forex: Up 14% YoY
    • Holiday: Down 8% YoY
    • E-business: Up 38% YoY
    • MICE: Up 24% YoY
    • Corporate Travel: Up 35% YoY
  3. At a consolidated level, forex business grew 11% YoY with retail business revenue growth of 7% YoY.
  4. Thomas Cook Borderless Prepaid Card sales grew 41% YoY.
  5. Travel Services segment was muted due to a surge in airfares both domestic and international.
  6. Digiphoto Entertainment Imaging reported revenue of Rs 118 Cr and EBIT of Rs 1.5 Cr.
  7. In Sterling Resorts, revenues grew 8% YoY Operating EBITDA rose to Rs 7.4 Cr from loss of Rs 20 Lac last year. The occupancy rate for Q1 was at 82% while average room rent rose 4% YoY.
  8. The group has a strong cash and bank deposits balance of Rs 1389 Cr as of 30th June ’19.
  9. The company has increased its stake in Ithaka to 21.39% and have added 5.82% for a consideration of Rs 1 Cr.
  10. Sales of Ithaka has risen 30% since last quarter.
  11. The company has launched a new product ‘Holiday Basket’ which is inflation-protected EMI powered product offering an international and domestic holiday per year across 14 destinations.

Investor Conference Call Highlights

  1. The management is stressing that the parent company of Thomas Cook India is Fairfax Holdings and not Thomas Cook PLC. The only relationship between Thomas Cook India and Thomas Cook PLC is the annual licensing fee for the Thomas Cook name that the Indian company pays to the PLC.
  2. The company has significantly improved its cash position in the current quarter.
  3. The management has pledged that the cash position of the consolidated company will be kept above Rs 800 Cr at all times.
  4. The company wants to emphasize that they are not interested in acquiring Cox & Kings at all as the C&K brand has been damaged and Thomas Cook wants to close down all rumors that they will be pursuing it.
  5. The prices of airfares shot up almost 40% after the fall of Jet Airways. This had impacted standalone numbers by Rs 5 Cr.
  6. Another big event that impacted the company adversely was the Easter attack in Sri Lanka. This caused forex and inbound numbers to dip a lot in May and June.
  7. The impact of both these events and IndAS 116 on overall numbers was almost Rs 8.5 Cr.
  8. The penetration of their cards rose to almost 80% in Q1.
  9. The management anticipates headwinds in the segment from the general economic slowdown and has seen a slowdown in forward bookings.
  10. In the matter of Quess Corp Demerger, the company expects the whole transaction to be over by October.
  11. In Sterling Resorts, growth in timeshare is muted but the member addition has been much better than last year. The management has reiterated that Sterling will be moving away from the timesharing model and towards B2B and B2C models. Sterling is also staying self-sufficient during this transition.
  12. The company sees the drop in operations due to the Sri Lanka attacks have been reduced and they anticipate an uptick in this segment from December onwards.
  13. The management is refraining from commenting on how the Cox & Kings default will affect the company’s operations. The company expects retail inquiries to come in by October.
  14. The company does expect corporate customers from C&K coming to them but the management reiterates that it is too soon to comment on any timeline.
  15. The combined market share of organized players in travel space is less than 5% of the overall industry. The management asserts that they should be holding more than 50% in this organized segment.
  16. The free cash available to the company in their cash and bank balances position is about Rs 100 Cr.
  17. The float for the forex and prepaid card business is around $72 million.
  18. The management guides for decent yields and looking at higher margins in all their B2C businesses and will be very careful in giving credit to corporates.
  19. The company’s name change process will begin soon as the management anticipates that the brand has been somewhat damaged due to Thomas Cook PLC and they are planning for a total brand transition before the brand name agreement expires in 2024.

Analyst’s View

Thomas Cook is the biggest travel company in India. They have been innovators in the sector for more than a century now. The company has shown good resilience in operations despite setbacks to the travel industry from the Jet Airways Fiasco and the Sri Lanka attacks. At such a time, when the core holiday business suffered, the other businesses like forex, MICE and corporate travel have risen to fill the void and help the company keep revenues up. The bankruptcy of Cox & Kings has freed up some space in the incumbent travel market which Thomas Cook looks primed to capture. But it remains to be seen whether this incident will negatively affect sentiments for the entire industry and Thomas Cook. Nonetheless, Thomas Cook is a good stock to watch out for, particularly given their industry experience and their widely diversified sources of revenues.


Q4 2019 Updates

Financial Results & Highlights

                                                                Standalone Financials (In Crs)
Q4FY19 Q4FY18 YoY % Q3FY19 QoQ % FY19 FY18 %  Change
Sales 387.2 346 11.91% 440.87 -12.17% 2310.8 1943 18.93%
PBT -22.9 -14.1 -62.41% -9.3 -146.24% 39.54 538.4** -92.66%
PAT -8.93 -10.4 14.13% -11.25 20.62% 26.47 531.43** -95.02%


                                                                Consolidated Financials (In Cr)
Q4FY19 Q4FY18 YoY % Q3FY19 QoQ % FY19 FY18 %  Change
Sales 1437.77 2660.1 -45.95% 1569.35 -8.38% 6718.7 11411.6 -41.12%
PBT -18.21 5846.5* -100.31% 21.6 -184.31% 57.3 6074.1* -99.06%
PAT -19.3 5924.1* -100.33% 4.98 -487.55% 35.84 6114.7* -99.41%

*Contains an exceptional item of Rs 5825.47 Cr

**Contains an exceptional item of Rs 534.36 Cr

Detailed Results

  1. The financial results are a little skewed to the downside in this quarter because of removal of contributions of Quess Corp.
  2. Proportionate revenues for Q4 and FY19 were up 13% and 17.6% YoY.
  3. The segment wise revenue growth in Q4 were:
    • Holiday: 20% YoY
    • MICE: 89% YoY
    • Corporate Travel: 19% YoY
    • FX: 7% YoY
  4. The company has also completed the acquisition of 51% stake in Digiphoto Entertainment Imaging at an EV of Rs 289 Cr.
  5. The company has also opened 66 new outlets in FY19.
  6. Consolidated Revenues for the financial services segment has grown a modest 4% YoY while the Travel and related services segment has grown 19.4% YoY in FY19.

Investor Conference Call Highlights

  1. The technology initiatives that the company is undertaking have been good with increase in e-business segment and the company plans to help smaller aggregators to access a consolidated platform for travel packages.
  2. The collapse of Jet airways is expected to prove detrimental to the outbound business segment as this event has pushed up international airfares quite a bit. Similarly, the inbound business is also expected to suffer due to rise in international airfares.
  3. The Sri Lanka business has been adversely affected due to the bombing incident earlier this year.
  4. The management believes that the holiday market will recover over the year and the pressure on airfares should soften as time passes.
  5. The company has already limited their exposure to Jet Airways. The company’s risk management division already flagged the risk from Jet around 6 months back.
  6. In the Forex Business, the company is only investing in airports where they are making profits. The company is moving away from expensive tier 1 airports and moving into tier 2 airports where they get better margins. This has seen the revenue from this division fall almost Rs 20 Cr. Despite this, the division has seen growth in profit by almost 15%.
  7. The prepaid division has grown 15% YoY with about $70 million in float at the end of the march quarter.
  8. The Quess Corp spinoff should be over in 3-4 months. Right now the NCLT process is underway.
  9. In the outbound B2C segment, the company has significant space to expand due to the options and market size increasing due to availability of financing options.
  10. The Digiphoto division should start contributing revenues from the next quarter onwards.
  11. The company aims to keep using the free cash generated to make strategic investments like the past actions into DMS business and the external acquisitions.
  12. Out of the total cash position of Rs 645 Cr, the management maintains that a large part of this can be used to finance acquisitions and it can also be used to handle volatility in demand in rare forex days on specific days of the year.
  13. The brand migration for Thomas Cook will take place slowly as the company has enough time with the brand name expiration in 2025.

Analyst’s View

Thomas Cook has been one of the oldest corporate entities in India. They have been innovators in the travel industry and continue to add businesses and acquire companies which can add on to their already wide portfolio of services and products. Thomas Cook has been on a consolidation path for quite some time now. This has already started to pay off with the steady growth of their prepaid card business and the rising number of bookings through the online medium. All in all, Thomas Cook is a good bet on the travel industry. However, one of their big acquisitions of Sterling Holidays, a vacation ownership company, has been a drag on their performance.  Hence, next few quarters are very important to gauge the progress.


Q3 2019 Updates

Financial Results & Highlights

Standalone Financials (In Lacs)

Q3FY19 Q3FY18 YoY % Q2FY19 QoQ % 9M FY19 9M FY18 9M% Change
Sales 44087.6  34962  26.1%  57970.1  -23.95%  192358 159695.4  20.45%
PBT  (931.8) *(2143.5)  56.52%  1345.9  -169.23%  6243.6  *1705.2  266%
PAT  (1125) **(2587.84)  56.52%  898.6  -225.19%  3540.1  **972  264%

*Excluding Exceptional Item profit.

**Adjusted PAT After Exceptional Item.

Consolidated Financials (In Lacs)

Q3FY19 Q2FY19 QoQ % 9M FY19 9M FY18 9M% Change
Sales  156935  144813  8.4% 404189 362587 11.5%
PBT  2164.4  1520  42.4% 7141 6169 15.7%

Note: Above Consolidated result are not comparable numbers and are post exclusion of Quess Corp and acquisition of TC Forex & TC Travels.

Detailed Results

  1. The financial results on the face look poor in this quarter because of removal of financial contributions of Quess Corp. However, going deep into the number reveals true picture.
  2. The standalone entity has achieved good results for the quarter with a 26% growth in revenues YoY.
  3. The losses have gone down more than 50% and 9M profit figures have been more than 250% up from figures last year.
  4. In consolidated terms, 9M revenues are up 12% YoY and PBT is up 15.7% YoY.
  5. Q3FY19 PBT was more than 42% compared to last year.
  6. The consolidated PBT of core businesses of Travel & Forex segments has been 106% up YoY.
  7. The company’s e-business segment saw strong growth in sales across business line with increases of 46% in outbound section, 25% in domestic section, 21% in forex section and 86% in visa section.

Investor Conference Call Highlights

  1. Strong performance in both standalone and consolidated terms.
  2. Performance driven by TCIL standalone, DMS unit which turned profitable and their Hong Kong subsidiary.
  3. Cost efficiencies were implemented which helped reduce finance costs by 41% while limiting salary expenses to around 10% higher than last year.
  4. Volume growth was driven by holidays business which grew by 29%.
  5. Long haul packages for EU and USA were launched for summer 2019 period which witnessed strong demand.
  6. Looking to maintain double digit growth of 10%-14% in operations despite the industry growing at 7-8% per year thus staying ahead of the curve.
  7. YTD growth in volumes in no of tickets in corporate travel was 10%.
  8. Invested in sales analytics and customer experience journey for all segments to ensure that end to end experience is seamless and ensure long term stickiness.
  9. Also invested in a recommendation engine called Traveljunkie and integrating it with product offerings.
  10. Management guides that it will keep looking for any other valuable acquisitions.
  11. All subsidiaries and acquisitions are generating enough cash and profits for standalone performance and so there are currently no plans for any capital infusion in them.
  12. Margins across all segments have been consistent and are on an uptrend this year.

Analyst’s View

Thomas Cook has been one of the oldest corporate entities in India. They have been innovators in the travel industry and continue to add businesses and acquire companies which can add on to their already wide portfolio of services and products. Thomas Cook has been on a consolidation path for many of their divisions like forex, etc. This should start paying off in the near future. It qualifies as a good proxy of the Indian travel and travel related service industry.


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