THOMASCOOK - Thomas Cook (India) Ltd. Share Price

In the earnings call held on May 13, 2026, management of Thomas Cook (India) Limited provided an outlook amidst a challenging operational environment characterized by geopolitical tensions and macroeconomic disruptions. For FY '26, the company reported total income of INR 85,578 million, marking a 3% increase, despite a notable decline in revenue in Q4, which was INR 17,707 million, down 10% from the previous year.

Management highlighted a strategic move involving the planned demerger of the resort business into Sterling Holiday Resorts, aimed at unlocking shareholder value and allowing a sharper focus on travel and financial services. EBITDA improved marginally in the first nine months, but geopolitical crises significantly impacted both customer sentiment and operations in Q4. The ongoing uncertainty in global markets caused airfares to surge by 30% to 50% on westbound routes and weakened long-haul demand, leading to a cautiously optimistic outlook for the B2C and B2B segments.

Key forward-looking points include the expectation for continued short-haul travel growth, witnessing double-digit increases, and a solid pipeline for MICE activities as corporates look to resume events. For the financial services segment, management indicated that strong partnerships are poised to increase market share further. Additionally, the forex business is expected to benefit from recent RBI guidelines allowing for capital account transactions, potentially opening up new revenue streams.

Overall, management remained optimistic about the resilience of the India operations, with positive growth indicators despite external challenges, and continued emphasis on cost optimization and prudent revenue management to navigate current pressures.

Here are the major questions and their respective answers from the Q&A section of the earnings transcript:

1. Question from Soumya S. regarding Sterling Resort's occupancy in Q1: "So, my question was regarding the Sterling Resort. As we have been adding hotels and number of rooms Q-on-Q and Y-o-Y, I just wanted to know if we expect a like-for-like improvement in occupancy in Q1 and how Q1 has been so far?"

   Answer: "We are optimistic about Q1; no notable headwinds. Our occupancy is improving, and we added 14 resorts last year, showing improvements despite increased supply. Our target occupancy is about 65-70%, and based on current trends, we expect strong performance in Q1."

2. Question from Soumya S. about outbound travel growth trends: "I just wanted to know if currently, like in Q1, we are seeing the same trend because long-haul being subdued?"

   Answer: "Yes, we're witnessing double-digit growth in short-haul travel due to easier visa processes and shorter distances. Eastbound markets are performing well, while long-haul volumes, particularly westbound, remain subdued."

3. Question from Heer Gogri regarding overall growth despite war impacts: "So, you see India DMS grew only by 3%, also domestic B2C degrew by 14% in FY '26. So, any other reason that you want to highlight apart from the war?"

   Answer: "The Pahalgam attack and geopolitical instability impacted our domestic business significantly. Key events like the Kumbh Mela were absent this year but were pivotal last year, leading to a stark comparison in performance."

4. Question from Heer Gogri regarding the MICE segment: "Could you also please talk about the corporate and MICE part? Are there any expected slowdowns for Q1 with regards to the war impact?"

   Answer: "Corporate travel remains stable with 7-8% growth. MICE is showing delayed decisions, but this is typical; the pipeline is robust. I expect volume to be resilient despite any delays in Q1."

5. Question from Anil Shah regarding EBITDA with a stable room count: "If we assume that we won't grow and just keep the rooms at 3,810, where do you think we can actually make in terms of an absolute EBIT?"

   Answer: "Typically, EBITDA margins between 32%-36% are stable. Staying at the current room count, if occupancy and ARR rise, we could see a proportional increase in EBIT. The growth trajectory remains promising even at static inventory."

6. Question from Ananya Khanna regarding the performance drop in financial services: "I wish to understand why there was a drop in the performance of the financial services segment at both the top line and bottom line level?"

   Answer: "The geopolitical events significantly truncated our operating periods; we effectively had about 9 months of trading. Sentiment was weak, impacting travel decisions. Despite challenging conditions, we maintained high EBIT margins."

7. Question from Ananya Khanna about the demerger timeline: "And third thing, if we could get some clarity on the timeline for the demerger?"

   Answer: "The demerger is on track for completion by Q1 of FY '28, within the originally communicated 12-15 months. We're actively engaging with regulatory bodies for necessary approvals."

Each of these questions and answers highlights the critical challenges and expectations for Thomas Cook (India) in the rapidly changing travel and financial services environment.