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.