Company Overview
Travel Food Services Ltd. (TFS), incorporated in 2009, is one of India’s leading players in the airport-based food and hospitality sector. The company operates 442 Travel Quick Service Restaurants (QSRs) and 37 premium lounges across major travel hubs in India, Malaysia, and Hong Kong. TFS’s outlets span across 127 brands (including international, regional, and in-house), offering curated, high-quality dining experiences tailored for travellers. It holds 26% market share in Indian airport QSR and 45% in airport lounges.
TFS is known for its operational excellence with a ~94% concession retention rate and has developed efficient supply chain systems, a diverse outlet format, and strong brand alliances. It has partnered with global brands such as KFC, Jamie Oliver’s Pizzeria, and Subway, while also developing popular in-house offerings.
Promoters & Shareholding:
| Particulars | Pre-Issue | Post-Issue |
| Promoters | 100.00% | 86.19% |
| Others | 0.00% | 13.81% |
Public Issue Details:
- Offer for Sale: 18.2 million shares with face value of Rs 1.
- Fresh Issue: Nil
- Total Issue Size: ₹2,000 Cr
- Price Band: ₹1,045 – ₹1,100
- Post Issue Market Cap: ₹13,760.7 Cr – ₹14,484.7 Cr
- Bid Lot: 1 lot for ₹14,300 and a max of 13 lots.
- Offer Period: Jul 07, 2025 – Jul 09, 2025
- Listing Date: Jul 14, 2025
- Book Running Lead Managers: Kotak, HSBC, ICICI Securities, B&K Securities
Objects of the Offer:
- No fresh capital raised; entire issue is Offer for Sale by existing shareholders.
Pros:
- Market leader in the airport QSR and lounge segment with significant growth in outlet base.
- Strong financial performance with EBITDA margin of ~33% in FY25.
- High brand recall and wide portfolio across domestic and international travel hubs.
- Robust expansion plans through ARAYA lounges and entry into new markets.
- Premium pricing power due to captive travel audience and regulated price environments.
Risks:
- High dependence on travel footfall and key airports (e.g., Delhi, Mumbai).
- Short-term concession agreements and lease renewals pose continuity risks.
- High fixed cost structure may hurt margins in downturns.
- Exposure to regulatory and policy changes in airport operations.
Industry Outlook:
India’s aviation sector is witnessing a rapid scale-up with airports expected to rise to 180 by FY29. Airport retail and F&B is a growing contributor to non-aero revenue. The Indian airport QSR segment is forecasted to grow at 18-20% CAGR (FY24–29) while lounges are also seeing expansion due to increased travel and credit card access. Globally, airport F&B is transitioning to experience-based, premium formats, benefitting players like TFS.
Financial Snapshot (INR Crores):
| Particulars | FY23 | FY24 | FY25 |
| Revenue | 1,067 | 1,396 | 1,688 |
| EBITDA | 374 | 412 | 554 |
| EBITDA Margin (%) | 35% | 30% | 33% |
| Net Profit (PAT) | 251 | 298 | 380 |
| PAT Margin (%) | 24% | 21% | 22% |
| Adjusted EPS (₹) | 19.1 | 22.6 | 28.8 |
| Net Worth | 665 | 888 | 1,070 |
| ROE (%) | 38.8% | 34% | 35% |
Valuation:
At the upper price band, the issue is valued at EV/EBITDA of 26.1x, below the peer QSR average of 31.9x. With superior margin profile (~2x peer average) and high return ratios (ROE ~39%, ROIC ~29%), valuations appear attractive. Other listed peers like Jubilant Foodworks and Devyani International trade at higher multiples despite comparatively weaker margins.
Peer Comparison Analysis:
| Metric | Travel Food Services Ltd. | Devyani International | Jubilant FoodWorks | Sapphire Foods | Westlife Foodworld |
| Market Cap (₹ Cr) | 14,486 | 20,150 | 35,200 | 9,600 | 13,050 |
| Revenue (FY25) (₹ Cr) | 1,763 | 3,580 | 5,450 | 2,590 | 2,480 |
| PAT (FY25) (₹ Cr) | 379.7 | 295 | 440 | 142 | 198 |
| Debt-to-Equity (x) | 0.4 | 1.3 | 0.8 | 1.1 | 0.5 |
| Number of Outlets | 442 | 1,790 | 1,995 | 876 | 389 |
| Valuation Metrics | |||||
| P/E Ratio (x) | 38.15 | 68.3 | 80 | 67.6 | 65.9 |
| Key Performance Indicators (KPIs) | |||||
| SSSG (%) | 9.20% | -1.80% | 1.20% | -4.10% | 2.50% |
| EBITDA Margin (%) | 28.40% | 18.70% | 21.30% | 16.20% | 17.80% |
| PAT Margin (%) | 21.50% | 8.20% | 8.10% | 5.50% | 8.00% |
| ROCE (%) | 25.10% | 15.30% | 18.50% | 12.40% | 16.10% |
Same-Store Sales Growth (SSSG): TFS reported a very healthy SSSG of 9.2%. This is a standout figure, especially when compared to peers who have reported flat or even negative SSSG. It signifies strong and growing demand at its existing locations, highlighting the resilience of its travel-focused model.
Operational Efficiency (EBITDA Margin): The company’s EBITDA margin of 28.4% is exceptionally strong and leads the peer group by a wide margin. This reinforces the point that its core operations are significantly more profitable than other QSR players, likely due to premium pricing and lower overheads in airport environments.
Capital Efficiency (ROCE): With an ROCE of 25.1%, Travel Food Services demonstrates superior efficiency in using its capital to generate profits. This high return on capital is a strong indicator of a robust business model and efficient management.
Recommendation:
With strong operational metrics, high-growth runway in the Indian travel F&B space, and a margin/return profile better than listed peers, Travel Food Services Ltd appears well-positioned for long-term growth. Despite no fresh issue, existing fundamentals and market dominance might warrant a “Subscribe” rating for investors looking at long-term exposure to India’s consumer travel and hospitality sector.
Disclaimer:
This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision.
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