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Motilal Oswal Report
Motilal Oswal Financial Services Ltd. believes TBO Tek Ltd. offers a structural play in the B2B global outbound travel market, enabling offline travel agents and enterprise buyers across geographies to access international airlines, hotels, and ancillaries.
The brokerage also highlighted that globally, the B2A travel distribution landscape comprises nearly ~2 million travel agents, spanning freelancers, home-based consultants, small independent agencies, and full-time professional firms.
Notably, TBO Tek targets the full spectrum of travel agents, and the breadth and fragmentation of this base underscores a large total addressable market, providing significant headroom for penetration, wallet share gains, and geographic expansion over time.
MOFSL expects TBO Tek to deliver revenue/Ebit/PAT CAGR of 35%/37%/32% over FY25-28, mainly on the back of increased contribution from high take-rate hotels and ancillary segments in the GTV mix, rising from 59% currently to over 70%.
Contribution from CV is expected to drive overall profitability, given its focus on luxury and premium hotel properties.
TBO Tek is currently trading at a P/E of 46x/32x/21x for FY26E/FY27E/FY28E. With an RoE/RoCE of 26%/21% in FY28E, the brokerage values TBO Tek at a 28xFY28E earnings per share of Rs 48.7 to arrive at a target price of Rs 1,360 and initiate with a Buy rating.
Key risks and concerns
- Extreme weather may impact destination accessibility;
- Rising travel costs could impact airfares and accommodation prices;
- Geopolitical uncertainty may influence traveler sentiment and route planning.
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