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Network-driven Marketplace Creating a Durable Competitive Moat

TBOTEK is a global B2B travel distribution platform connecting travel suppliers with travel buyers, including travel agents, tour operators and corporate travel companies. We believe TBOTEK has built a durable competitive moat by aggregating highly fragmented global travel supply, with access to 1 Mn+ hotels, including a large long tail of independent properties, alongside air and holiday packages. Sourcing, onboarding and managing such dispersed inventory requires deep supplier relationships, local expertise and technology capabilities, creating high barriers to replication at scale. By consolidating this fragmented supply on a single platform, TBOTEK simplifies inventory discovery for travel buyers, supporting higher platform stickiness and repeat usage.

Strategic Acquisition of Classic Vacations (CV) & Geographic Expansion

TBOTEK has consistently pursued acquisitions to strengthen its global presence and enhance capabilities in the Hotel & Packages (H&P) segment. These acquisitions have helped deepen direct hotel supply, expand internationally and onboard more retail travel agents, supporting higher take rates. It completed the strategic acquisition of Classic Vacations (CV) to gain access to the large, high-spending US outbound market, where TBOTEK always had a limited market presence. TBOTEK gets access to about 10,000 luxury travel advisors where it can cross-sell TBOTEK’s broader hotel inventory. CV’s premium focus is reflected in its higher Average Daily Rates (ADR) (>USD 1,000 vs. TBOTEK’s ~USD 250, ~4x), larger average booking values (USD 8,600 vs. ~USD 600, ~14x) and longer booking windows (Group ~245 days vs. ~50 days). The premium model in CV enables structurally higher take rates, improving monetisation.

Scalable Asset-light Platform Supporting Margin Expansion

We believe TBOTEK’s EBITDA margin has declined in recent quarters primarily due to elevated investments in international expansion and AI infrastructure, along with the integration of Classic Vacations (CV), which operates at a relatively lower margin. With nearly two-thirds of the planned investments already completed, YoY growth in quarterly SG&A expenses has moderated. As this investment phase wanes, operating leverage is expected to improve, supporting margin expansion, going forward. Additionally, the Gross Profit as a percentage of GTV in the H&P segment has improved to 5.2% in Q1FY27 from 4.1% in Q3FY25 and this trend is likely to continue, driven by an increasing share of direct supplier relationships. Accordingly, we expect EBITDA margin to expand, from 14.1% in FY26 to 18.6% by FY29E.

Investment View:

We believe TBOTEK has built a differentiated B2B travel-distribution platform focused on global travel agents, particularly the structurally relevant outbound travel market. Its competitive moat, favourable travel-industry tailwinds, diversified geographic presence and scalable platform model support significant operating leverage. In our view, these attributes warrant a premium multiple. We forecast Revenue/EBITDA/PAT CAGRs of 26.3%/38.3%/42.4% over FY26–FY29E. We initiate coverage with a ‘BUY’ rating and a TP of INR 2,075, valuing TBOTEK at 35x FY28E– FY29E average EPS, implying a 0.8x PEG ratio supporting valuation comfort.

Optionality:

A better-than-expected rebound in outbound travel after the Middle East conflict, strong revenue synergies from the Classic Vacation acquisition, growth in monthly active agents, improved conversion ratios and further strategic acquisitions could act as key positives

Key risks:

Possibly prolonged middle east tensions, strong competition, integration and execution risk from the CV acquisition and dependence on supplier relationships.

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