Summary
TBO Tek Limited - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026
Event Participants
Executives 6 Akshat Verma (WTD & CTO), Anil Berera (Advisor), Ankush Nijhawan (Co-Founder & Joint MD), Gaurav Bhatnagar (Co-Founder & Joint MD), Shreshth Mahajan (Associate Director-IR), Vikas Jain (CFO)
Analysts 7 Amit Jain, Chirag Kachhadiya, Divyansh Gupta, Karan Uppal, Kavish Parekh (B&K), Manik Taneja, Prateek Kumar (Jefferies)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Gross Transaction Value (GTV) | ₹9,703 crores | Enterprise GTV; Organic business seeing recovery, CV contributing high-value luxury bookings. |
| Revenue from Operations | ₹784 crores | +8.08% enterprise take rate; Organic at 6.04% vs. Classic Vacations (CV) at 24.94% (includes pass-throughs). |
| Gross Profit (GP) | ₹391 crores | Management identified GP as the most robust measure of value capture, stripping out high pass-through commissions. |
| Adjusted EBITDA | ₹93 crores | Enterprise GTV to Adj. EBITDA conversion improved to 1.18% from 1.05% YoY. |
| Adj. EBITDA / GP Margin | 23.7% | Organic business at 25.3% conversion; CV at 19.6% due to integration phase. |
| Air GTV Growth (Organic) | +16% YoY | Strong recovery despite December carrier disruptions; GP maintained at 1.1%–1.2% levels. |
| Hotel GTV (Organic) | ₹3,410 crores | Maintained strong take rates due to “Platinum” direct-sourcing program and retail mix. |
| Net Profit (PAT) | Not Explicitly Stated | Financials impacted by one-time PPA amortization and interest costs from CV acquisition. |
Geographic & Segment Commentary
- North America (Classic Vacations): First full quarter of consolidation. Business recognizes revenue on a check-in basis (unlike TBO’s booking basis). Strategic focus is on 10,000 high-end luxury advisors and deep consortium (Virtuoso, Signature) relationships.
- Air Business (Organic): Delivered 16% YoY growth by fixing previous operational gaps while maintaining gross profit margins. Management expects double-digit momentum to continue into Q4 FY26.
- Hotel Business: Direct sourcing now stands at 40% for TBO Organic and 85% for Classic Vacations. The “Platinum” program for direct supply is a key driver for margin protection and take-rate stability.
Company-Specific & Strategic Commentary
- Classic Vacations Integration: Cross-selling has commenced with TBO inventory now available on CV; CV inventory on TBO to follow in weeks. Full platform migration of CV onto TBO’s tech stack is a multi-quarter project expected to yield cost synergies by H2 FY27.
- Operating Leverage: Management reiterated that SG&A growth is tapering. They expect significant bottom-line flow-through in Q4 FY26 as top-line growth outpaces fixed costs in the organic business.
- Take Rate Nuance: Blended take rates are “noisy” due to CV’s accounting (where 12.4% is passed to advisors). Management is shifting focus to “GP as a % of GTV” to measure true economic retention.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Operating Leverage | Q4 FY26 Improvement | Significant flow-through to bottom line expected as Q4 is seasonally the second-best quarter. |
| North America Growth | High Double Digits | Targeted over a 3-4 year horizon across both CV and organic TBO North America units. |
| Air GTV | Double-Digit Growth | Momentum from Q3 (16%) expected to persist into Q4 FY26. |
Risks & Constraints
| Risk | Context |
|---|---|
| Forex & Hedging | While YoY impact reduced, costs remain due to hedging international business (70-75% coverage) and revaluation of loans given to the Dubai subsidiary. |
| Integration Complexity | CV operates on legacy systems; the platform migration is complex and carries execution risk over the next 2-3 quarters. |
| Working Capital | Hotel and CV businesses have negative working capital cycles; however, the Air business remains working capital neutral, requiring careful management of agent credit. |
Q&A Highlights
Integration & Synergies
- Question: What are the early signs of cross-selling between TBO and Classic Vacations? (Karan Uppal)
- Answer: CV is already buying from TBO and would rank as a top 20 customer if viewed standalone. Platform migration will take 2-3 quarters due to CV’s legacy tech (Gaurav Bhatnagar).
Margin & Profitability Trends
- Question: How should we view EBITDA/GTV vs EBITDA/GP? (Manik Taneja)
- Answer: EBITDA to GP is more consistent (mid-20s range). GTV-based margins can fluctuate based on the mix of low-margin Air vs. high-margin Hotel business (Gaurav Bhatnagar).
Air Business Strategy
- Question: Can you grow Air GTV faster by reducing take rates? (Divyansh Gupta)
- Answer: Dropping GP to 0.8% would win GTV but management prefers consistency at 1.1%-1.2%. The focus is on maintaining GP while gaining market share through tech efficiency (Ankush Nijhawan).
Key Takeaway
TBO Tek’s Q3 FY26 results were defined by the first-time consolidation of Classic Vacations (CV), which bolstered Enterprise GTV to ₹9,703 crores but introduced accounting complexity due to CV’s check-in-based revenue recognition and high pass-through commissions. The organic business showed resilience with 16% Air GTV growth and stable 10.5% Hotel take rates, supported by a 40% direct-sourcing mix. Strategically, the company is pivoting toward Gross Profit as its primary health metric to normalize the high pass-through nature of the North American luxury segment. Management expressed high confidence in demonstrating significant operating leverage in Q4 FY26 as SG&A growth tapers. While integration of CV’s legacy systems remains a multi-quarter task, the immediate cross-sell momentum and deep access to US luxury consortia position TBO for sustained double-digit growth in the North American market.
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