Jefferies retains TBO Tek Buy, sees 18% upside on hotel-led growth
Jefferies retained Buy on Indian travel-tech platform TBO Tek, raising its target to Rs 1,905 for 18% upside. It cited stronger operating leverage, 22% organic GTV growth and hotel-led expansion, while MakeMyTrip prioritises share gains and Ixigo faces investment-driven margin pressure.
Read the source at Financial Express · BrandWagonNewer TBO Tek signal · — may update this storyJefferies sees TBO Tek gaining from North America luxury travel growth
The numbers
| TBO Tek organic EBITDA growth: | 28% YoY |
|---|---|
| TBO Tek adjusted PAT growth: | 51% YoY |
| TBO Tek FY28E EV/EBITDA: | 20x |
| MakeMyTrip constant-currency gross bookings growth: | 21% |
| Ixigo GBV growth: | 19%; EBITDA declined 5% |
| TBO Tek hotel GTV: | Rs 7,577.7 crore |
| TBO Tek hotel take rate: | 10.55% |
Why it matters to operators and investors
TBO Tek’s stronger profitability profile versus MakeMyTrip and Ixigo suggests its asset-light B2B travel platform could be a more attractive partner or consolidation target as rivals absorb share-gain spending and investment pressure.
What to watch next
- Organic GTV growth remaining at or above roughly 20% across the next two to three quarters.
- EBITDA growth continuing to exceed GTV/revenue growth, demonstrating operating leverage.
- Hotel segment mix, booking volumes, room-night trends and commission/take-rate stability.
- Sales and marketing expense as a percentage of revenue versus MakeMyTrip and Ixigo’s competitive spending trajectory.
- Changes in international travel demand, visa rules, airfare trends, foreign-exchange movements and hotel pricing.
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- Large supplier contract renewals, agency churn, working-capital movement and any acquisition-related dilution.
Likely next moves
The desk's read of what comes next — analysis, not reported by the source.
- Expand hotel supply and agency penetration in high-growth outbound and cross-border corridors.
- Use stronger profitability to selectively invest in distribution technology, agent tools and localized inventory rather than broad consumer-marketing spend.
- Pursue tuck-in partnerships or acquisitions that add regional agent networks, hotel contracting capabilities or ancillary travel products.
- Emphasize EBITDA and cash-flow conversion in investor communications to reinforce differentiation from consumer OTA peers facing share-led spending.
The counter-case
The bullish case leans heavily on sustained hotel-led GTV growth and operating leverage, but travel demand is cyclical and hotel commissions can be vulnerable to supplier renegotiation, discounting, and competitive incentives. A 51% adjusted PAT increase may also be flattered by a low base or adjustments rather than reflecting equally strong underlying cash earnings. With the stock already being framed against a higher target price, execution must remain strong; any slowdown in international travel, hotel booking volumes, or take-rate expansion could compress the expected upside.