Edelweiss recently met the management of Thomas Cook and here is the updte,
We expect the foreign exchange business (contributing 60-65% of the sales and profits) to grow at 10-15% every year and continue to contribute majority to sales and profits. The travel related business, including ticketing, outbound travel and inbound travel is expected to grow 30-35% as the company is focused on the high-margin inbound travel business. Total number of branches is expected to double to support growth in the business over the next 2-3 years.
We expect the foreign exchange business (contributing 60-65% of the sales and profits) to grow at 10-15% every year and continue to contribute majority to sales and profits. The travel related business, including ticketing, outbound travel and inbound travel is expected to grow 30-35% as the company is focused on the high-margin inbound travel business. Total number of branches is expected to double to support growth in the business over the next 2-3 years.
CY09 being the worst year in the history of the company, business prospects are looking better with rebound in general economic activity. With plans to increase the high-margin business of travel related services aggressively, along with costs reduction, we expect TCI to report much better financials in the years to come. At CMP of INR 63, the company is trading at P/E and EV/EBIDTA of 55.2x and 18.9x, respectively.
