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The US-Iran conflict has led to disruptions in travel sentiment weighing on FTAs and discretionary demand in 4QFY26E. Due to unfavourable base (MahaKumbh in 4QFY25) the domestic aviation traffic reported a modest growth of 4.4%/2.3% YoY in Jan-26/Feb-26 respectively. However, the traction in Mar-26 was impacted by geo-political headwinds especially on international routes. As far as hospitality sector is concerned, while the pan-India RevPAR reached a new high of Rs8,249-8,625 (up 15-17% YoY as per HVS Anarock) in Feb’26, occupancy levels for major hoteliers took a beating in Mar-26 led by a slowdown in FTAs. The luggage sector also borne the brunt of West Asia war as demand sentiment was weak in Mar-26 with sharp inflation in key RM’s like PP & PC. We expect crude price volatility to impact near term earnings in aviation and luggage sector while the demand recovery in hospitality can be swift once the West Asia crisis normalizes. SAMHI IN and PARKHOTE IN are our top picks in the travel & tourism space.

Luggage – RM inflation to weigh on earnings: We expect VIP IN/SII IN to report revenue of Rs4.2bn (down 14.1% YoY)/Rs4.6bn (up 8.6% YoY) in 4QFY26E. Key RM’s such as PP, PC, nylon and polyester have witnessed sharp inflation in Mar-26 amid ongoing geopolitical tensions in West Asia, exerting pressure on margins. Consequently, VIP IN is expected to report GM of 38.4% while SII IN’s GM is expected to be at 45.8%.

For VIP IN, we cut our FY27E/FY28E EPS estimates by ~50%/24% and retain REDUCE on the stock with a TP of Rs267 (36x FY28E EPS; no change in target multiple). For SII IN, we cut our FY27E/FY28E EPS estimates by ~13%/9% and maintain ‘HOLD’ on the stock with a TP of Rs1,989 (40x FY28E EPS; no change in target multiple).

Hotels – FTA decline leads to occupancy dip: For CHALET IN, we expect ARR’s to increase 8.1% YoY to Rs15,500 but occupancy is expected to contract ~900 bps on YoY basis to 67%. This decline is driven by transient factors like weakness in the Mumbai market (~45% of inventory) in Jan’26 due to a high base (Coldplay-led demand in Jan’25) and temporary disruptions (Republic Day long weekend coinciding with BMC elections and the West Asia crisis). Overall, we expect CHALET IN to report flattish revenue with an EBITDA margin of 45.0%. We maintain ‘BUY’ on the stock with an SoTP based TP of Rs1,080 (hotel business valued at 20x FY28E EBITDA; no change in target multiple).

For LEMONTRE IN, we expect ARR’s to increase 4.7% YoY to Rs7,370 with an occupancy of 77%. We expect revenue growth of 6.8% YoY while EBITDA margin is expected to compress 377 bps YoY to 50.2% due to loss of input tax credit, ongoing portfolio renovation and rising spends towards technology upgrade. We maintain ‘BUY’ on the stock with a SOTP-based TP of Rs164.

For SAMHI IN, we expect ARR’s to increase 7.1% YoY to Rs8,019 with an occupancy of 74%, and an overall revenue growth of 8.8% for the quarter. We expect EBITDA margin to contract ~132bps YoY to 37.3% in 4QFY26E. We maintain ‘BUY’ on the stock with a TP of Rs268 valuing the stock at an EV/EBITDA multiple of 10.5x FY28E EBITDA (no change in target multiple).

For PARKHOTE IN, we expect revenue growth of 8.4% YoY to Rs1,922mn. ARR for owned hotels is expected to increase 6.0% YoY to Rs9,287 with an occupancy of 92%. We expect EBITDA margin of 35.2% in 4QFY26E. We maintain ‘BUY’ on the stock with a TP of Rs207 valuing hotel business at 12.5x FY28E EBITDA (no change in target multiple) and Flurys at 1.5x FY28E sales (no change in target multiple).

Aviation – International load factor and ASKM impacted in Mar-26: We expect INDIGO IN to report a load factor of 85.0% reflecting the impact of Middle east crisis. We expect PRASK of Rs4.48 and consequently a yield of Rs5.27 (decline of 0.9% on YoY basis). We expect ASKM/RPKM to increase by 8.2%/5.3% YoY to 45.6bn/38.7bn respectively. We expect RASK of Rs5.15 and gross spread (RASK less fuel CASK) of Rs3.60.

INDIGO IN is expected to report revenues of Rs234bn (up 5.9% YoY) with an EBITDAR margin of 11.5% (FX adjusted EBITDAR margin of 26.8%). Given steep depreciation in INR, we expect MTM FX loss of Rs36bn in 4QFY26E. We maintain ‘HOLD’ with a TP of Rs5,203 (10.5x FY28E EBITDAR, no change in target multiple).

IRCTC – Ticketing volumes to be 136mn: We expect online ticketing volumes of 136mn resulting in convenience fee revenue of Rs2.6bn in 4QFY26E. Catering revenue is expected to increase 8.7% YoY to Rs5.8bn while tourism business is expected to grow by 6.4% YoY to Rs2.9bn. Overall, we expect IRCTC IN’s revenue to increase by 9.0% YoY to Rs13.8bn with an EBITDA margin of 33.1%. We maintain BUY with a TP of Rs850 (40x FY28E EPS; no change in target multiple).

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