TBO Tek Limited Earnings Conference Call Summary
Date and Context
• Date of Call: June 6, 2024
• Transcript Submission: June 12, 2024
• Fiscal Year End: March 31, 2024
Key Management Participants
• Co-Founders: Mr. Ankush Nijhawan, Mr. Gaurav Bhatnagar
• CFO: Mr. Vikas Jain
• President of Strategy: Mr. Anil Berera
Financial Highlights
• IPO Response: Raised INR 1,550 Crore, including INR 400 Crore for capital infusion.
• Revenue Growth: 31% year-over-year for the fiscal year.
• Profitability: Significant increases in adjusted EBITDA and profit after tax.
Business Overview
• Sector: Global outbound travel, recovering post-COVID.
• Revenue Model: Transaction commissions from airlines and net rates from hotels; 75% of gross profit from hotel and ancillary services.
• Geographic Reach: Operates in over 100 countries, with most gross profit generated outside India.
Growth Strategy
• Three Main Pillars:
• Expanding buyer network
• Strengthening supply base
• Continuous platform improvement through technology
• Recent Acquisitions: Four in the past five years, latest being Jumbonline.
Market Trends
• Indian Travel Market: 24% increase in overseas travel spending; projected growth in international air passenger traffic.
• Expansion Plans: Targeting Tier-3 and Tier-4 cities in India.
Q&A Highlights
• Organic Growth Inquiry: Jumbo contributed INR 36 Crore in revenue; minimal impact in the previous quarter.
• Seasonality: Travel influenced by festivals; Q1 growth from summer travel, Q2 peak for international leisure, Q3 slower, Q4 benefits from year-end travel.
• MENA Region: Organic growth, particularly in Saudi tourism and Sub-Saharan Africa.
• European and North American Markets: Significant investments and expected key revenue drivers.
Acquisition Strategy
• Global Focus: Open to acquisitions that expand buyer or supply base.
• Opportunistic Approach: Acquisitions not essential for growth.
Currency Risk Management
• Hedging Strategy: Use of forwards for international payments; primarily collect and make payments in Indian Rupees for domestic transactions.
Cost Structure and Operating Leverage
• Technology Investments: Continued investment in tech teams despite high costs.
• SG&A Costs: Significant fixed costs leading to operating leverage as the business grows.
Use of IPO Funds
• Allocation: Market development, technology and data investment, exploring global inorganic growth opportunities.
Closing Remarks
• Confidence in Growth: Emphasis on organic growth potential and the business model's ability to leverage investments for future growth.