Thomas Cook India’s FY25 performance: A 9% growth in total income and strong Q3 results

Thomas Cook (India) Limited saw steady growth in 9M FY25, driven by strong performance across financial services, travel, and leisure hospitality. Despite external challenges, the company remains well-positioned for a strong year-end.

9M FY25 Performance Highlights:

1. Financial Services:
   • Income from operations up by 7%
   • EBIT margin expanded by 700 bps to 47%
   • Growth driven by a 15% increase in retail turnover, led by:
     • 30% rise in the education segment
     • 9% increase in the holidays segment
   • Additional float income and improved operational efficiencies contributed to the growth.
2. Travel and Related Services:
   • Income from operations grew by 12%, with a steady EBIT margin of 3.9%.
3. B2C Holidays:
   • 20% year-on-year growth across both domestic and outbound segments.
4. India Destination Management Services (DMS):
   • Income from operations up by 24% y-o-y, in line with the increase in foreign tourist arrivals.
5. International DMS:
   • 21% growth in topline, led by operations in APAC and the US.
   • Middle East operations maintained stable performance despite regional conflicts.
6. Travel Segment:
   • Excluding the Government business of Rs 2,468 mn in 9M FY24, income from operations increased by 19%.
   • EBIT excluding this impact increased by 28% y-o-y.
7. Leisure Hospitality (Sterling Holiday Resorts):
   • 14% y-o-y increase in topline with healthy EBIT margins of 27%.
   • Expanded resort network, increased domestic travel, and strategic initiatives drove growth.
8. Consolidated Profit Before Tax (PBT):
   • Up 6% to Rs. 2,904 mn vs Rs. 2,729 mn in 9M FY24.
9. Consolidated Profit After Tax (PAT):
   • Declined by 11%, primarily due to an increase in the effective tax rate (ETR).
   • Sterling Holiday Resorts recognized a Deferred Tax Asset (DTA) of Rs 231 mn in Q4 FY24, leading to an increase in ETR to 34% from 24% in the prior year.

Q3 FY25 Performance Highlights:

1. Financial Services:
   • Income from operations up by 16%
   • EBIT margin expanded by 592 bps to 39%.
   • Growth driven by an 18% increase in retail turnover, led by:
     • 10% growth in the Holidays segment
     • 15% growth in the Education segment.
2. Travel and Related Services:
   • Income from operations increased by 11%.
   • Strong contributions from B2C holidays (up 29% y-o-y), India DMS (up 19% y-o-y), international DMS (up 18% y-o-y), and corporate travel (up 17% y-o-y).
   • On a like-to-like basis, excluding the National Games income of Rs 935 mn in Q3 FY24, the Travel segment growth stands at 19%.
   • EBIT was lower due to the absence of National Games contribution in Q3 FY24 and heightened currency volatility in overseas DMS operations, particularly Asian Trails.
3. Leisure Hospitality (Sterling Holiday Resorts):
   • Topline increased by 12% with an improvement in EBIT margins to 31%.
   • Occupancy increased to 61%, supported by the expanded resort network of 57 resorts and 3,118 rooms.
4. Digital Imaging Solutions (DEI):
   • Performance muted due to multiple factors, including lower footfalls, geopolitical tensions, one-time government subsidy received in Q3 FY24, and overlapping technology costs during WeC platform implementation.
5. Strong Financial Health:
   • Cash and bank balances stood at Rs 20,210 mn as of December 2024.
   • Debt-to-equity ratio remained low at 0.12.

Corporate Updates and Developments:

1. Digitalization and AI Strategy:
   • Continued momentum with the Digital First strategy.
   • AI-powered platforms revolutionized travel experiences, offering personalized services and custom itineraries.
   • Enhanced international debit/credit card payment options.
2. India Network Expansion:
   • Seven new outlets were opened in various regions:
     • Punjab (Jalandhar), Uttar Pradesh (Lucknow), NCR (Greater Noida, Gurugram, Vasant Kunj), Maharashtra (Mumbai), Gujarat (Anand).
3. Awards and Recognitions:
   • Thomas Cook India:
     • Outbound Travel Operator of the Year and MICE Travel Operator of the Year at The Economic Times Travel & Tourism Annual Awards 2024.
     • Top honour at The French Ambassador’s Travel Awards 2024.
   • SOTC:
     • Domestic Tour Operator of the Year at The Economic Times Travel & Tourism Annual Awards 2024.
4. Partnerships and Renewals:
   • 17 partnerships renewed in UAE, Maldives, India, Macau, and Singapore.
   • 2 new partnerships signed in India and Maldives.
   • 3 new operational partnerships launched in India, Maldives, and Indonesia.

Travel Services Update:

1. Corporate Travel:
   • 13% y-o-y growth in turnover in Q3 FY25.
   • Four new large corporate accounts with a target annual turnover of Rs 381 mn.
   • Adoption rate of 58% for domestic and 2% for international corporate self-booking tools.
2. Meetings, Incentives, Conferences, Exhibitions (MICE):
   • Managed over 150 groups, including large groups of 800-1,040 delegates.
   • Key international and domestic destinations included Europe, Australia, South East Asia, UAE, Goa, Jaipur, Delhi, etc.
3. Leisure Travel:
   • 29% y-o-y sales growth.
   • Launched unique experiential travel tours (Northern Lights, Autumn, Winter) and festive tourism.
   • Early launch of Europe Summer Holidays 2024 and Kumbh Mela special products, generating significant bookings.
4. Destination Management Services (DMS):
   • India DMS saw a 19% y-o-y growth in income from operations.
   • Overseas DMS grew by 18%, despite challenges in the Middle East and East Africa.
   • APAC (Asian Trails) experienced healthy growth, while USA (Allied TPro) saw positive growth.

Leisure Hospitality (Sterling Holidays):

1. Performance in Q3 FY25:
   • Best-ever quarter with top-line and margin improvements.
   • Occupancy at 61% and guest ratio of non-members at 81%.
   • Expanded network to 57 resorts and 3,100 rooms.
   • New resorts launched in Q3: Lontano Waterfront Wayanad, Brookstone Coorg, and Bagh Ranthambore.