Thomas Cook India is looking to address the shortfall in its travel business through tighter margin management, cost efficiencies and digital initiatives as geopolitical disruptions in the Middle East and rising travel costs weigh on operations, Brijesh Modi, President and Chief Financial Officer of Thomas Cook India, said.
The company is focusing on improving operational efficiencies through better procurement, tighter cost controls and greater use of technology, while pursuing growth opportunities in its holiday and foreign exchange businesses.
“Our focus is on improving margins through tighter cost management, procurement efficiencies and operational productivity while navigating the challenges in the travel business,” Modi said.
The strategy comes against the backdrop of a mixed operating performance in the September quarter, with the India travel business facing revenue pressure even as some international markets and other business segments reported growth.
Thomas Cook India reported profit before tax before exceptional items of Rs 848 million for the September quarter, marginally higher than Rs 845 million in the corresponding period last year, according to the financial update shared by the company.
The performance came despite geopolitical challenges affecting its Middle East operations. Revenue in the India travel business declined 6%, while operations in Nairobi, South Africa and Far East Asia reported growth, excluding the impact of Middle East markets. The company is looking to improve the underlying performance of its travel operations through cost discipline, procurement efficiencies and technology-led productivity improvements.
Cash, cost management among CFO’s five priorities
Modi has outlined five priorities guiding his management approach: cash management, cost management, control, compliance management and customer enablement.
“Cash management, cost management, control, compliance management and customer enablement are the five priorities that guide our approach to managing the business,” Modi said.
Cash flow management assumes particular importance given the different working capital requirements of the group’s businesses, which range from corporate travel and other business-to-business operations to consumer-facing foreign exchange services.
While corporate travel operations typically require working capital, foreign exchange businesses benefit from advance payments by customers. Managing these contrasting cash flow cycles is central to maintaining financial flexibility while supporting the company’s expansion plans.
As of September 30, Thomas Cook India’s cash and bank balances stood at approximately Rs 2,800 crore, according to the management update. Surplus funds are invested in bonds and fixed deposits in accordance with board-approved policies.
Procurement efficiencies and advance buying to protect margins
Rising airfares, hotel rates and other operating costs are putting pressure on the travel business, prompting the company to look at procurement and inventory management as levers to protect margins.
Thomas Cook India is leveraging combined procurement across its businesses, including SOTC and Thomas Cook India, to improve purchasing efficiencies and negotiate better commercial terms. Where commercially viable, the company also procures airfare and hotel inventory in advance to manage exposure to subsequent price increases.
Alongside procurement, automation and technology-led productivity improvements are expected to help contain operating expenses as the business scales. The focus is on improving efficiency across operations without compromising customer experience, particularly in a business where travel costs and demand can be affected by external developments.
Foreign exchange gains share in student fee remittances
The foreign exchange business remains the group’s largest business segment, with student fee remittances emerging as an important growth driver. Thomas Cook reported 18% growth in student fee remittances, even as the national average declined 18%, according to figures shared by the management.
The company is also expanding its distribution reach through partnerships with non-banking financial companies, including Uniwala, Abha and HDFC Credila. The push is aimed at strengthening its presence in the overseas education payments market, where foreign exchange services have different working capital characteristics from corporate travel and other business-to-business operations.
AI investments to support automation and travel planning
Thomas Cook India plans to invest approximately Rs 6-10 crore in artificial intelligence initiatives over the next year, with a focus on improving operational efficiency, agent productivity and customer experience.
One of the initiatives is Tessie, the company’s AI-powered chatbot, which is being developed to support dynamic itinerary packaging using AI capabilities. The platform is designed to help travel agents put together travel plans more efficiently while reducing manual intervention in the booking and planning process.
The broader technology push is also aimed at automating repetitive processes and improving productivity across the business. These investments form part of the company’s efforts to manage operating costs while improving its ability to scale travel services.
Holiday bookings rise 30% as company targets domestic demand
The holiday business is seeing stronger forward demand, with bookings rising 30% year on year, according to the management update. The company is also looking to tap growing interest in domestic religious and spiritual tourism, particularly in destinations such as Varanasi, Ayodhya, Gujarat and the Chardham circuit.
To address this segment, Thomas Cook has introduced Bhakti, a sub-brand focused on religious and spiritual travel. It is also exploring chartered flight offerings to destinations such as Bhutan and Lakshadweep as part of efforts to widen its holiday portfolio.
Distribution expansion remains another priority, with the company looking to grow its franchisee and company-owned outlet network while acquiring new corporate customers. The combination of stronger forward bookings, new travel offerings and a wider distribution network is expected to support growth in the holiday business.
Sterling Holidays expands to 83 resorts
In its hospitality business, Sterling Holidays has expanded its resort network to 83 locations, representing 20% year-on-year growth in its resort count. The average room rate increased 9% to approximately Rs 6,400, while occupancy improved from 49% to 52%, according to the management update.
The expansion strengthens the group’s presence in domestic hospitality and leisure travel, with improvements in room rates and occupancy indicating growth across both pricing and utilisation metrics.
Capex and working capital to support expansion
Thomas Cook India had projected capital expenditure of Rs 85-90 crore for FY26, covering technology investments and business expansion. Its investment priorities also include strengthening technology infrastructure and supporting the working capital requirements of growing businesses such as corporate travel and meetings, incentives, conferences and exhibitions (MICE).
As the company pursues growth across travel, foreign exchange and hospitality, the challenge will be to balance investment requirements with cash discipline and operating efficiency. Its focus on procurement, automation and tighter margin management reflects an effort to address near-term business pressures while building capacity for growth.
The broader task for Modi and the management team will be to navigate geopolitical uncertainty and rising travel costs while improving the profitability of the travel business and sustaining momentum in the group’s other segments.
