This article first appeared on GuruFocus .
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Revenue Growth:The company delivered growth on both top line and bottom line despite a tough quarter.
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Europe Revenue Growth:Delivered 24% year-on-year growth in Europe.
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Middle East Performance:Delivered flat numbers with 1% growth in constant currency despite regional crisis.
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North America Hotel GTV:With the acquisition of Classic Vacation, North America now represents almost a quarter of hotel GTV.
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EBITDA Margins:Bottom line EBITDA margins grew significantly faster than GP or revenue margins, demonstrating operating leverage.
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Constant Currency Impact:An 11% gap in hotel GTV was observed between constant currency and INR reporting due to rupee depreciation.
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Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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TBO Tek Ltd ( NSE:TBOTEK ) delivered both top-line and bottom-line growth despite a very tough quarter due to Middle East disruptions, demonstrating business resilience.
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The company's diversified source market strategy helped cushion the impact, with Europe delivering 24% year-on-year growth and the Middle East remaining flat in constant currency.
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Operating leverage was clearly visible, with EBITDA margins growing significantly faster than gross profit or revenue margins, even on moderate top-line growth.
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The acquisition of Classic Vacations was timely, providing a strong entry into the more resilient North America-Europe travel corridor, which now accounts for nearly a quarter of hotel GTV.
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The company is making progress on integrating Classic Vacations, with platform integration expected by the end of the calendar year, which should unlock further cross-selling opportunities.
Negative Points
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The Middle East crisis created severe travel disruptions, making it the toughest quarter for the company in the last two years and creating an extremely fluid and unpredictable situation.
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The company had to selectively drop margins in some regions to win business during the crisis, leading to a slightly lower take rate for the quarter.
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The integration of Classic Vacations is still in progress, and it will be several quarters before the business can deliver enterprise-level growth on its own.
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Currency depreciation created an 11% gap in hotel GTV when comparing INR to constant currency, complicating financial reporting and analysis.
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The timing of a return to normal growth in the Middle East is highly uncertain, making it difficult to predict when the company can fully benefit from its prior investments in the region.
Q & A Highlights
Here are the key highlights from TBO Tek Ltd's Q1 FY27 earnings call, focusing on the most significant Q&A exchanges.
Q: The EBITDA to GTV margin was strong at 1.3% this quarter. Is this level sustainable, and should we expect it to grow from here? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) EBITDA to enterprise GTV is a tricky metric to track due to varying take rates between our airline and hotel businesses. In a crisis, we may also selectively drop margins to win business. The right metric for operating leverage is GP to EBITDA conversion, and we expect that number to continue to improve.
Q: Given the volatile situation in the Middle East, do you expect that region to return to growth anytime soon? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) The situation is extremely fluid and changes hourly. We have given up on predicting when it will normalize. We view the Middle East as optionality; if growth returns, it will accelerate our bottom line, but it's very hard to bank on it right now.
Q: How should we model the growth of the organic business from a medium-term perspective, assuming things return to normal? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) We expect to get back to the growth profile we had in Q3 of last year, which was our last full quarter of normalcy. We don't expect a change in trajectory pre- and post-war. If anything, larger players like us tend to become bigger post-crisis as smaller players face attrition.
Q: On the Classic Vacations integration, what levers are yet to contribute, and what impact do you expect? A: (Ankush Nijhawan, Co-Founder & Joint Managing Director) The strategy is three-pronged: 1) Expanding our sales team in North America (mostly done). 2) Integrating and automating back-office and CX (underway). 3) Platform integration, which is the biggest lever and should be complete by the end of the calendar year. This will allow seamless cross-selling between the TBO and Classic platforms.
Q: With the Classic acquisition providing a foothold in North America, what markers will give you comfort that the acquisition is moving in the right direction? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) The core marker is whether North America as a whole is growing for us. It's a massive, mature market that takes time to break into. If we can find enterprise-level growth in North America over several quarters, that will be a big win, as that top-line growth will drive a far larger bottom line in that market.
Q: You mentioned that the investment cycle is concluded. What is the peak EBITDA-to-GP margin you see for the company? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) It's hard to give guidance due to variables like AI's impact on efficiency and the medium-term outcome in the Middle East. However, scaled platform businesses in our space normalize at 45-60% EBITDA margins. While we are not anchoring to that in the short term, there is significant runway for margin improvement from current levels.
Q: The organic hotels and ancillary GP as a percentage of GTV declined by ~30 bps. Was this due to lower saliency from the Middle East or a decision to protect volumes? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) It's impossible to separate the two, as both happened. We fought for business by lowering margins in a tough environment to take top-line share, and the Middle East, a higher-margin market, was flat. Both factors contributed to the decline.
Q: The intercompany elimination for TBO sales to Classic was ~?65 crore. Is this a good proxy for current cross-sell, and where do you see it stabilizing post-integration? A: (Vikas Jain, CFO) Yes, that number represents current sales from TBO to Classic. We look forward to increasing that share. (Gaurav Bhatnagar, Co-Founder & Executive Director) The reverse cross-sell (Classic supply to TBO) has not started yet and will only begin after the platform migration, likely early next year.
Q: Are you seeing players vacating or shutting down in the Middle East market due to the crisis? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) There isn't massive attrition among our direct competitors (outbound-focused). However, inbound businesses that depend on travelers coming into the Middle East are under serious stress, and we will likely see attrition there if the situation doesn't revive soon.
Q: How is AI being applied on the supply side, particularly for contract rate negotiation with hotels and airlines? A: (Gaurav Bhatnagar, Co-Founder & Executive Director) AI-led negotiations for long-tail contracting is not a big focus for us. Our contracting is primarily with chains and large luxury hotels. The long-tail hotel distribution ecosystem is already managed by channel managers and aggregators, so this isn't an area of focus at this time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
