Anand Rathi's research report on TBO Tek
TBO Tek’s overall GTV grew 3.7% y/y to Rs77.9bn due to slight impact from Ramadan-induced seasonality in Mar’25 and full consolidation of Jumboonline. Q4 revenue grew ~20.9% y/y to ~Rs4.5bn, largely led by the take rate expanding to ~5.7%, from 4.9% in Q4 FY24 (hotels’ take rate expanded to 7.6%,from 6.8% in Q4FY24). Margins contracted ~172bps y/y to ~16% due to increase in other expenses (as the company hired ~60 sales employees in Q4). FY25 revenue grew ~24.7% y/y, with overall GTV growing 16.2% y/y and margins at 17.5% (down ~105bps y/y). We expect growth revival from Q1 FY26 due to the low base (affected by Ramadan) of last year.
Outlook
However, we expect near-term margin pressure due to company’s investment in sales team for expansion across new geographies (15+ countries added in FY25; plans ~20 new countries in FY26) and penetrating further into existing ones. Factoring in this, we cut our FY27e margins by 170bps to 18.5% and retain a Buy rating, with a TP of Rs1,500, ~46x FY27e EPS.
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