Travel
Food Services (TFS) is an Indian airport travel quick service restaurant
(Travel QSR) and lounge (Lounge). The company‘s F&B brand portfolio,
comprising 127 partner and in-house brands, is in the operation of 442 Travel
QSRs across India, Malaysia and Hong Kong.
The
travel QSR business comprises a range of curated food and beverage (F&B)
concepts across cuisines, brands and formats, which have been adapted to cater
to customers’ demands for speed and convenience within travel environments.
TFS
lounge business comprises designated areas within airport terminals, accessible
primarily by first and business-class passengers, members of airline loyalty
programs, select credit card and debit card holders and members of other
loyalty programs.
The
company‘s Travel QSR and Lounge businesses are present in 14 airports in India,
three airports in Malaysia and one in Hong Kong, as of March 31, 2025. Such
airports include the Delhi Airport, Mumbai Airport, Bengaluru Airport,
Hyderabad Airport, Kolkata Airport, and Chennai Airport.
TFS
launched its first travel quick-service restaurant (QSR) outlet in 2009. It is
promoted by SSP Group plc (SSP) and its affiliates SSP Group Holdings Ltd, SSP
Financing Ltd, SSP Asia Pacific Holdings Ltd along with the Kapur Family Trust,
Varun Kapur and Karan Kapur.
Object of the offer
The IPO comprises an entire offer for
sale (OFS) of 1,81,81,818 equity shares at higher price band. Promoter family
group (Kapur Family
Trust)
will be offloading shares worth Rs 2000 crore worth of shares in the OFS. The offer provides reservation
options for eligible employees to subscribe at a discount of Rs 104 per share.
Since the IPO is solely an OFS, the
company will not obtain any funds from this issuance, and all proceeds will be
directed to the selling shareholder.
Strengths
TSR is the leading player in the Travel QSR
and Lounge sectors in airports in India based on its revenue in Fiscal 2025.
The company operated the largest network of Travel QSRs in India, as of March
31, 2025, with 384 of its 413 operational outlets being situated in airports,
and the remaining in highway sites and had a market share of approximately 26%
based on revenue in the travel QSR sector in Indian airports and had a market
share of approximately 45% based on revenue in the airport lounge sector in
India in FY2025.
Strong expertise in operating and
handling the distinct challenges of F&B in the operationally complex and
highly secure airport environment. Its capabilities and processes enable it to
efficiently execute in and address the challenges posed by the operationally
complex and highly secure airport environment.
Proven and established track record of
long-term working relationships with airport operators. TFS long-term working
relationships with many airport operators supports its growth of Travel QSR and
Lounge businesses.
The company has a diversified portfolio
of partner F&B brands franchised from high-quality brand partners and
in-house F&B brands. The company has 90 F&B brands licensed from
international and regional Indian brand partners, in addition to 37 in-house
brands. International brands include international brands such as KFC, Pizza
Hut, Wagamama, The Coffee Bean & Tea Leaf, Subway and Krispy Kreme,
regional Indian brands such as Bikanervala and Third Wave Coffee, and in-house
brands such as Caféccino, Curry Kitchen, Idli.com and Dilli Streat.
The company has a seasoned management
team with an average of over 24 years of experience. In addition, the company
benefits from the support and experience of SSP group and K Hospitality (Kapur
family).
Weaknesses
Revenue from the company’s Travel QSRs
and Lounges situated in airports contributed 95.55% of its revenue in FY2025 as
such is highly dependent on its concession agreements for its business
operations and inability to renew existing concession agreements or any adverse
changes in the terms therein, early termination, or any inability to obtain new
concessions could adversely affect the company’s business.
The Top 5 airports contributed 85.94% of
the company’s revenues in FY2025 and decrease in passenger traffic in such
airports could have a significant impact on the company’s revenue.
The company faces competition from a
wide variety of local and international Travel QSR operators and Lounge
operators, in addition to brand partners themselves, which compete with the
company by tendering for concessions in airports and highway sites.
Failure to attract new brand partners or
maintain or develop existing ones could adversely affect the operations of the
company.
The company’s business may be negatively
impacted if it is unable to retain its existing lounge partners or attract new
ones as the company derived 44.9% of its revenues from lounge business in
FY2025.
The company’s business growth may be
adversely affected by shifts in the operating models of its airport operators,
which may reduce the company’s share of profit derived from the relevant
concession agreements with such airport operators.
There are outstanding legal matters
against the company amounting to Rs 104.8 crore and any adverse outcome may affect
the financial condition of the company.
Contingent liabilities as on March 31,
2025, stood at Rs 273.4 crore.
Valuation
In FY2025, consolidated sales were up by 20.9% to Rs
1687.74 crore compared to FY2024. Increase in revenues was on account of an
increase in its LFL Sales Growth of 4.55% in Fiscal 2025 compared to Fiscal
2024, and net contract gains of 15.66% in Fiscal 2025 compared to Fiscal 2024. The
OPM increased by 331 bps to 32.83%, which led to a 34.4% rise in operating
profit to Rs 554.10 crore. The Other income was up 13.5% to Rs 74.97 crore.
Interest costs declined 11.6% to Rs 45.71 crore while depreciation increased
14.0% to Rs 126.30 crore. PBT increased 30% to 504.34 crore in FY2025 as
against Rs 387.47 crore in FY2024. Tax
expenses for FY2025 were Rs 124.68 crore compared to tax expense of Rs 89.35
crore in FY2024. Net profit increased 26.2% to Rs 363.15 crore.
FY2025 EPS on post-issue equity works out to Rs 27.58.
At the upper price band of Rs 1100, P/E works out to 39.88x and EV/EBITDA stood
at 25.03x.
Listed industry peers of the company are
JubliantFoodwork, Devyani International, SapphieFoods India, Restaurant Brands
Asia, Westlife Foodworld and Dreamfolks Services. In comparison, Jubilant
Foodworks trades at 221 times its P/ FY2025EPS and 32.29 times EV/EBITDA,
Devayani International trades at 2050 times P/FY2025 EPS and 28.12 times
EV/EBITDA, Sapphire Foods trades at 533 times its P/FY2025 EPS and 23.8 times
EV/EBITDA, Westlife Foodworld trades at 976 times its P/FY2025 EPS and 41.4
times its EV/EBTDA and Dreamfolks Services trades at 17.67 times its P/FY2025
EPS and 11.6 times its EV/EBITDA.
Travel Food Services: Issue
highlights
|
For Fresh Issue Offer size (in no
of shares )
|
|
- On lower price band
|
-
|
- On upper price band
|
-
|
Offer size (in Rs crore)
|
-
|
For Offer for Sale Offer size (in
no of shares )
|
|
- On lower price band
|
19138756
|
- On upper price band
|
18181818
|
Offer size (in Rs crore)
|
2000
|
Price band (Rs)
|
1045-1100
|
Minimum Bid Lot (in no. of shares
)
|
13
|
Post issue capital (Rs crore)
|
|
- On lower price band
|
13.17
|
- On upper price band
|
13.17
|
Post-issue promoter & Group
shareholding (%)
|
86.2%
|
Issue open date
|
07-07-2025
|
Issue closed date
|
09-07-2025
|
Listing
|
BSE, NSE
|
Rating
|
44/100
|
Travel
Food Services: Consolidated Financial
|
|
2303 (12)
|
2403 (12)
|
2503 (12)
|
Sales
|
1067.15
|
1396.32
|
1687.74
|
OPM (%)
|
35.03
|
29.52
|
32.83
|
OP
|
373.86
|
412.13
|
554.10
|
Other inc.
|
36.43
|
66.07
|
74.97
|
PBIDT
|
410.29
|
478.20
|
629.07
|
Interest
|
47.81
|
51.69
|
45.71
|
PBDT
|
362.48
|
426.51
|
583.36
|
Dep.
|
83.11
|
110.83
|
126.30
|
PBT Before share of profit of
Associates and Joint Ventures
|
279.38
|
315.68
|
457.06
|
Share of profit/loss from JV
|
47.76
|
71.79
|
47.27
|
PBT
|
327.14
|
387.47
|
504.34
|
Total Tax
|
75.84
|
89.35
|
124.68
|
PAT
|
251.30
|
298.12
|
379.66
|
Minority Interest
|
7.48
|
10.34
|
16.51
|
Net Profit
|
243.82
|
287.79
|
363.15
|
EPS (Rs)*
|
18.52
|
21.85
|
27.58
|
EPS is on post issue
equity capital of Rs 13.17 crore of face value of Rs 1 each
|
Figures in Rs crore
|
Source: Travel Food Services Issue
Prospectus
|
|