THOMASCOOK Q3 FY26 earnings call.
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Revenue
₹2,146 Cr
verified against source
Revenue YoY
5%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Thomas Cook India reported Q3 FY26 total income of ₹2,187 crore, up 5% YoY, with PBT growing 20% to ₹89.7 crore excluding a one-time labor code provision. The foreign exchange segment delivered strong performance with EBIT up 10% and margin expansion of 280bps to 41.5%, driven by 25% retail sales growth and 39% education segment growth despite industry-wide LRS headwinds. Sterling Holiday Resorts achieved record quarterly performance with revenue up 10% to ₹156.8 crore and EBITDA margin of 36%, operating with zero debt and ₹343 crore cash. The B2B travel business grew 5% but faced headwinds from Middle East competitive intensity and muted US inbound demand. B2C leisure declined 6% YoY due to Diwali calendar shift and Indigo disruptions, with customer preference shifting to short-haul destinations (Vietnam +30%, Japan +15%). DEI's Dubai operations hit record December revenue of ₹56.5 crore. Management guided for double-digit earnings growth in FY27 under normal macro conditions, targeting 4%+ EBIT margins for travel segment. The company will move to new tax regime from FY27, enabling full MAT credit utilization. Risks include prolonged rupee depreciation impacting Europe bookings, intense OTA competition, and geopolitical sensitivity in key Middle East and US markets.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects double-digit earnings growth in FY27 assuming normal macro conditions (GDP growth ~7-7.5%, currency depreciation ~2-3%), citing that 10% growth is a 'given' for the business.
- Management reiterated guidance of maintaining 4%+ EBIT margins for the travel segment, with ongoing yield optimization and tactical portfolio recalibration to address rupee-euro volatility.
- Sterling Holiday Resorts targets EBITDA margins between 32-35% going forward, with Q3 FY26 at 36% representing peak seasonality. The company will continue adding 15+ new resorts annually.
- Company will transition to the new MAT-compliant tax regime effective FY27, enabling full utilization of accumulated MAT credit. This represents a positive earnings impact.
Risks flagged
- Long-haul travel, specifically Europe, remains sluggish due to steep rupee depreciation against the euro. Management is recalibrating Europe product portfolio to make packages more affordable, indicating potential margin pressure from discounting.
- Forex segment revenue grew only 2% YoY despite retail sales growing 25% and education turnover growing 39%, creating a discrepancy that analysts questioned. Management attributed this to subdued corporate segment volumes and margin pressure, suggesting not all sales growth translates to revenue.
- Customer preference shifted from long-haul (average price $250,000+) to short-haul destinations (₹1-1.25 lakh per person), resulting in higher passenger volumes but lower average transaction values. This mix shift could pressure overall B2C revenue and margin quality.
- An individual investor raised concerns about new digital players entering the market targeting solo travelers with competitive pricing. Management acknowledged there are no entry barriers in the industry and emphasized brand trust, execution capabilities, and technology investments as competitive moats, but did not provide specific defensive metrics.
Key quotes
- The 40% growth in our education segment, whereas the holiday segment turnover improved by 11%. In terms of our digital adoption, we were at the 21% mark. Our app engagement continued to see an upward trend and grew 2.7x to 835 transactions in the current quarter.
- Q3 FI26 presents a record performance with strong execution. Growth is inventory-led and supported by healthy demand. Margins remain resilient despite rapid scaling. Cash flows and balance sheet strengths provide long-term flexibility. We believe Sterling is firmly in a scale plus leverage phase.
- This does not exclude the one-time non-recurring charge of 171 million on account of an exgratia payment... if you look at the interest income growing from 22 crores to 40 crores in the current quarter... this reflects our efficiency in managing our better treasury operations.
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