Retail Research IPO Note

Sector: Travel QSR Price Band (Rs): 1,045 – 1,100

03rd July 2025 Recommendation: Subscribe

Travel Food Services Ltd

Company Overview: Issue Details

Travel Food Services Ltd (TFS) is a leading player in the Indian Airport Date of Opening 07th July 2025
Travel QSR and Lounge industry. As of FY25, the company accounted for Date of Closing 09th July 2025
~26%/45% market share in the Indian Airport Travel QSR and the Indian Price Band (Rs) 1,045 – 1,100
Offer for sale (Rs cr) 2,000.0
Airport Lounge sectors respectively in terms of revenue. The company’s
Fresh Issue (Rs cr) -
Travel QSRs are predominantly situated within airports while, the Lounge
Issue Size (Rs cr) 2,000.0
business comprises of designated areas within airport terminals. As of
No. of shares 1,81,81,818 @upper price band
Mar'25, TFS operated 442 Travel QSRs across India & Malaysia and 37
Employee Reservation (Rs cr) 4.0
Lounges across India, Malaysia and Hong Kong. Face Value (Rs) 1.0
Key Highlights: Post Issue Market Cap (Rs cr) 13,761 – 14,485
Kotak Mahindra Capital
1. Largest network of Travel QSRs & Lounges in India: As of FY25, the Company Ltd, HSBC Securities
company operated the largest network of Travel QSRs in India with 413 BRLMs and Capital Markets (India) Pvt
operational outlets in the country. Of which, 384 were situated in airports Ltd, ICICI Securities Ltd, Batlivala
and the remaining in highway sites. Additionally, TFS also operated the & Karani Securities India Pvt Ltd
largest network of private lounges comprising of 28 lounges across 10 Registrar MUFG Intime India Pvt Ltd
airports in India. The company has procured long-term concessions Bid Lot 13 shares and in multiple thereof
through bidding for its Travel QSR and Lounges with terms averaging ~8.2
QIB shares 50%
years. Retail shares 35%
2. Diversified portfolio of F&B brand partnerships: Within the Travel NII shares 15%
QSR business, TFS operates a wide range of popular international and
regional F&B brands like KFC, Pizza Hut, Subway, Bikanervala, Third Wave Shareholding Pattern
Coffee along with in-house brands such as Cafeccino, Curry Kitchen, Pre-Issue No. of Shares %
Idli.com and Dilli Streat. As of FY25, the company had 90 F&B brand Promoter & Promoter Group 13,16,79,484 100.0
licenses from international and regional brand partners along with 37 in-
Public & Others - -
house brands.
Total 13,16,79,484 100.0
3. Focus on traveler preferences: In order to address traveler’s demands
for speed and convenience, the company has introduced self-ordering Post Issue @ Lower Price Band No. of Shares %
kiosks, online order and in-airport delivery options along with contactless
Promoter & Promoter Group 11,25,40,728 85.5
payment systems to accelerate customer servicing time and make
Public & Others 1,91,38,756 14.5
ordering more convenient at select locations. In addition, at certain
Lounges, the company has introduced a-la-carte menu options curated Total 13,16,79,484 100.0
by chefs, along with spa services, live music, cocktail specialists and
interactive sports and entertainment zones. Post Issue @ Upper Price Band No. of Shares %
Promoter & Promoter Group 11,34,97,666 86.2
4. Strategic Partnerships: TFS through its strategic partnerships with
airport operators secures long-term concessions within the airports Public & Others 1,81,81,818 13.8
which are under the strategic partners’ purview. Such partnerships Total 13,16,79,484 100.0
include Delhi International Airport in relation to operations at the Delhi Source: RHP, SSL Research
Terminal 3 airport, JV with GMR Airports for its operations at Goa (Mopa)
and Hyderabad airports. The company has also formed a JV (Semolina Promoter Shareholding Split
Kitchens Pvt Ltd) with Adani Airport Holdings Ltd and AJ Holding Ltd in
relation to operations at Mumbai, Ahmedabad, Jaipur, Mangalore,
Lucknow, Guwahati, Thiruvananthapuram and Navi Mumbai airports.
Valuation: TFS is a proxy to the Indian aviation growth story. It has a 49.0%
strong presence across all the major airport terminals across India as 51.0%
well as concession wins at both the upcoming new airports at Greater
Noida and Navi Mumbai. The brand portfolio has a healthy mix of third
party and in-house QSR brands. At the upper price band of Rs 1,100, the
stock is likely to trade at 39.9x FY25 EPS which is at a discount to listed
SSP Asia Pacific Holdings Ltd Kapur Family Trust
QSR companies. TFS has superior margins and return ratios along with
strong balance sheet. We recommend investors to Subscribe to the
issue at the cut-off price. Source: RHP, SSL Research

For the list of our branches refer to the website: www.sbisecurities.in

 Travel Food Services Ltd Travel QSR

Key Financials & KPIs

Particulars (Rs cr) FY23 FY24 FY25

Travel QSR outlets (#) 282 369 442
Lounge outlets (#) 25 30 37
Revenue from operations 1,067.2 1,396.3 1,687.7
EBITDA 373.9 412.1 554.1
PAT 243.8 287.8 363.2
EBITDA Margin (%) 35.0 29.5 32.8
PAT Margin (%) 22.8 20.6 21.5
RoE (%) 37.2 32.9 34.5
RoCE (%) 47.7 39.2 47.7
P/E (x)* 59.4 50.3 39.9

*Note: Pre-issue P/E based on upper price band

Source: RHP, SSL Research

Risk Factors
• Highly dependent on concession agreements: The company operates its business through concession agreements,
lease, license and tenancy agreements with operators of airports and highway sites. Thus, TFS’s ability to expand and
grow its network depends on retaining existing concession agreements and obtaining new concessions on
commercially reasonable terms.

• Failure to attract new brand partners: As of FY25, the company derived ~54.4% of its Travel QSR revenue from brand
partners. Failure to renew or retain existing franchise agreements or to enter into new franchising agreements could
adversely impact the growth of the company’ business.

• Failure to maintain Lounge partnerships: The success of the company’s Lounge business is dependent on its long-term
relationship with Lounge Partners, comprising domestic and international airlines, card issuers and networks, etc. As
of FY25, revenue from Lounge services accounted for ~44.9% of the company’s total revenue. TFS typically renews its
agreements with Lounge Partners on an annual basis.

• Regulatory risk: The company’s Travel QSR business is subject to Food Safety and Standards Regulations and other
regulations of FSSAI. Any non-compliance with or changes in such regulations may adversely affect the business and
reputation of the company.

Growth Strategies
• Optimizing product offerings and services to grow like-for-like sales.

• Expanding network of outlets within existing markets

• Building strategic presence in newer markets, including at global airports.

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 Travel Food Services Ltd Travel QSR

Overview of Promoters
About SSP Group PLC:

SSP Group PLC (SSP) is a FTSE 250 company listed on the London Stock Exchange and is one of the leading operators in the
Travel QSR sector globally in terms of revenue (as of CY24). As of FY25, SSP had a network of over 3,000 F&B and Lounge outlets
in 38 countries. Additionally, SSP’s brand portfolio comprises of ~550 proprietary brands and third-party brands and bespoke
concepts.

Leverage for TFS:

TFS benefits from SSP’s long-standing relationships with international airport operators which provides opportunities for the
company to expand its international Lounge operations. Through SSP, the company was able to enter into a franchise
agreement with Wagamama to operate the brand within the airport Travel QSR sector in India. Going forward, TFS will work
closely with SSP to leverage their international airport relationships to grow its Lounge business internationally under ARAYA,
an umbrella brand for its Lounge business growth strategy.

As per a latest exchange filing made by SSP, the company has announced its plans to purchase additional shares in TFS
(~1.01% of TFS’ issued share capital) for a consideration of GBP 12.5 mn (~Rs 145.7 cr). Following completion of the
transaction, SSP’s stake in TFS will increase to 50.01% from the current holding of 49.0% and TFS will continue to be
consolidated in SSP’s financial results. Additionally, consistent with the strategic importance of TFS to SSP, SSP intends that 2
of its representatives will join the Board of TFS replacing its existing nominee directors, subject to all necessary regulatory
clearances.

Particulars Rs cr
Overview
SSP Group PLC's Market Cap 17,491.8
Travel Food Services Ltd. Implied Market Cap 14,484.7
Holding of SSP in TFS* 50.0%
Stake Value 7,243.8
TFS contribution to SSP’s FY24 (September ended) Financials
Revenue 5.0%
EBITDA 14.0%
Number of Travel QSR and Lounge outlets
SSP Group PLC 3,000+
Travel Food Services Ltd 479
Number of F&B Brands in portfolio
SSP Group PLC 550
Travel Food Services Ltd 127

*Assuming purchase of additional 1.01% stake by SSP in TFS

Source: RHP, SSP Group PLC’s FY24 Results Presentation, SSL Research

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 Travel Food Services Ltd Travel QSR

SSPs Global Presence

Source: RHP, SSL Research

About K Hospitality:

K Hospitality is the flagship hospitality brand under which the Kapur Family Trust operates/owns/invests in various hospitality
and food services companies. As of FY25, K Hospitality has a presence in 35 cities in India and abroad. It operates, owns or
invests in QSRs, restaurants, bars, cafes, food courts, banqueting, outdoor catering and corporate food services under popular
brands and business verticals such as Copper Chimney, Blue Sea Catering and Banquets and LifeCo Services.

Leverage for TFS:

TFS benefits from K Hospitality’s market reputation and bargaining leverage in the procurement of raw materials from K
Hospitality’s network of suppliers. Through over 50 years of experience in the Indian F&B industry, K Hospitality has developed
culinary and operational know-how, an understanding of Indian consumers and industry knowledge that TFS is able to bank
on.

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 Travel Food Services Ltd Travel QSR

Segment-wise Revenue Mix

FY23 FY24 FY25
Segment
Rs cr % of Revenue Rs cr % of Revenue Rs cr % of Revenue

Travel QSR 539.1 50.6% 732.8 52.5% 872.1 51.7%

Lounge services 492.4 46.2% 623.5 44.7% 758.4 44.9%

Management & other services* 34.5 3.2% 39.0 2.8% 57.1 3.4%

Total revenue 1,066.1 100.0% 1,395.3 100.0% 1,687.6 100.0%

*Other services include joining fee and branding income from tie-ups with certain brands & income from the subleasing of space within airports to third parties.
Source: RHP, SSL Research

Travel QSR & Lounge outlets - Bifurcation

Particulars FY23 FY24 FY25
Number of Travel QSR outlets
India 266 340 413
Malaysia 16 29 29
Total 282 369 442
Number of Lounge outlets
India 21 24 28
Malaysia 4 6 8
Hong Kong - - 1
Total 25 30 37

Source: RHP, SSL Research

List of Partner & In-House Brands

Partner brands
In-house brands
International Brands Regional Indian Brands
• KFC • Third Wave Coffee • Caféccino
• Pizza Hut • Hatti Kaapi • Dilli Streat
• Wagamama • Sangeetha • idli.com
• Coffee Bean & Tea Leaf • Bikanervala • Curry Kitchen
• Jamie Oliver’s Pizzeria • Wow Momo
• Brioche Doree • The Irish House
• Subway • JOSHH
• Krispy Kreme • Adyar Ananda Bhavan
• Bombay Brasserie

Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

Travel QSR Revenue Split – Brands wise

FY23 FY24 FY25
Particulars
Rs cr % of Revenue Rs cr % of Revenue Rs cr % of Revenue

Partner brands 291.5 54.1% 399.0 54.4% 474.2 54.4%

In-house brands 247.7 45.9% 333.9 45.6% 398.0 45.6%

Total revenue from Travel QSR 539.1 100.0% 732.8 100.0% 872.1 100.0%

Source: RHP, SSL Research

Pan-India Presence (Present across 13 of India’s Top 15 airports)

Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

Industry Overview

Total Domestic Air Passenger Traffic (mn)

1,000 FY29P-FY34P CAGR: 7.0%

900 820 - 840

800
FY25A-FY29P CAGR: 9.9%
700
580 - 600
600

500
412
400

300

200

100

-
FY25 FY29P FY34P
Source: RHP, SSL Research

No. of Operational Airports in India

250

185 - 205
200 165 - 185

150 135

100

50

-
FY24 FY29P FY34P
Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

Global Airport Travel QSR market (USD bn)

70 CY29P-CY34P CAGR: 6.2%

60 53 - 58

CY24E-CY29P CAGR: 11.3%

50
38 - 43

40

30 26 - 28

20

10

-
CY24E CY29P CY34P
Source: RHP, SSL Research

India Airport Travel QSR market (Rs bn)

250

FY29P-FY34P CAGR: 17.6%

200
170 - 180

150

FY25E-FY29P CAGR: 19.7%

100
70 - 80

50 37 - 39

-
FY25E FY29P FY34P
Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

Financial Snapshot
INCOME STATEMENT
(Rs cr) FY23 FY24 FY25
Revenue from Operations 1,067 1,396 1,688
YoY growth (%) - 30.8% 20.9%
Cost Of Revenues (incl Stock Adj) 210 285 296
Gross Profit 857 1,112 1,391
Gross margins (%) 80.3% 79.6% 82.4%
Employee Cost 159 230 277
Other Operating Expenses 323 470 561
EBITDA 374 412 554
EBITDA margins (%) 35.0% 29.5% 32.8%
Other Income 36 66 75
Interest Exp. 48 52 46
Depreciation 83 111 126
PBT 279 316 457
Tax 76 89 125
Share of profit of associates and JVs 48 72 47
Minority Interest 7 10 17
PAT 244 288 363
PAT margin (%) 22.8% 20.6% 21.5%
EPS (Rs) 18.5 21.9 27.6

BALANCE SHEET
(Rs cr) FY23 FY24 FY25
Assets
Net Block 96 122 121
Capital WIP 6 23 39
Intangible Assets 1 1 2
Goodwill 2 2 -
Right of use assets 255 262 249
Other Non current Assets 346 541 544
Current Assets
Current Investment 326 376 589
Inventories 11 12 9
Trade receivables 114 105 106
Cash and Bank Balances 134 179 38
Short-term loans and advances 6 11 31
Other Current Assets 37 64 175
Total Current Assets 628 745 949
Current Liabilities & Provisions
Trade payables 178 275 339
Other current liabilities 66 74 116
Short-term provisions 24 26 31
Total Current Liabilities 269 375 487
Net Current Assets 359 371 462
Total Assets 1,064 1,322 1,416
Liabilities
Share Capital 4 4 13
Reserves and Surplus 652 870 1,040
Total Shareholders Funds 655 874 1,053
Minority Interest 10 14 17
Total Debt 31 64 -
Long Term Provisions 6 7 7
Lease Liabilities 352 352 333
Other Long Term Liabilities 10 11 6
Total Liabilities 1,064 1,322 1,416

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 Travel Food Services Ltd Travel QSR

Cash Flow Statement (Rs cr) FY23 FY24 FY25

Cash flow from Operating Activities 322 353 515
Cash flow from Investing Activities (197) (155) (191)
Cash flow from Financing Activities (104) (172) (343)
Free Cash Flow 285 274 455

RATIOS
FY23 FY24 FY25
Profitability
Return on Assets 18.3% 17.0% 19.1%
Return on Capital Employed 47.7% 39.2% 47.7%
Return on Equity 37.2% 32.9% 34.5%
Margin Analysis
Gross Margin 80.3% 79.6% 82.4%
EBITDA Margin 35.0% 29.5% 32.8%
Pre Ind-AS EBITDA Margin 25.7% 21.0% 25.7%
Net Profit Margin 22.8% 20.6% 21.5%
Short-Term Liquidity
Current Ratio (x) 2.3 2.0 1.9
Quick Ratio (x) 2.2 1.9 1.9
Avg. Days Sales Outstanding 39 27 23
Avg. Days Inventory Outstanding 18 15 11
Avg. Days Payables 94 102 109
Fixed asset turnover (x) 11.2 11.4 14.0
Debt-service coverage (x) 4.1 3.2 11.0
Long-Term Solvency
Total Debt / Equity (x) 0.0 0.1 -
Interest Coverage Ratio (x) 6.8 7.1 11.0
Valuation Ratios*
EV/EBITDA (x) 38.5 34.9 26.1
P/E (x) 59.4 50.3 39.9
P/B (x) 22.1 16.6 13.8
EV/Sales (x) 13.5 10.3 8.6
P/Sales (x) 13.6 10.4 8.6

*Valuation ratios are based on pre-issue capital at the upper price band
Source: RHP, SSL Research

Reconciliation of EBITDA for Pre Ind-AS 116 treatment

Particulars (Rs cr) FY23 FY24 FY25
Revenue 1,067.2 1,396.3 1,687.7
EBITDA (Post Ind-AS) 373.9 412.1 554.1
EBITDA Margin (Post Ind-AS) 35.0% 29.5% 32.8%
Depreciation of right-of-use assets 60.5 79.2 86.2
Interest expense on lease liabilities 39.2 39.5 34.2
Pre Ind-AS EBITDA 274.1 293.5 433.6
Pre Ind-AS EBITDA Margin 25.7% 21.0% 25.7%

Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

Peer Comparison – FY25

Jubilant Devyani Sapphire Restaurant
Travel Food Westlife
Particulars (Rs cr) FoodWorks International Foods India Brands Asia
Services Ltd Foodworld Ltd
Ltd Ltd Ltd Ltd
CMP 1,100.0 705.0 167.2 320.3 758.3 82.5
Sales 1,687.7 8,142.0 4,951.0 2,882.0 2,491.0 2,551.0
EBITDA 554.1 1,568.0 810.0 477.0 320.0 268.0
Net Profit 363.2 228.0 (6.9) 27.7 12.2 (216.0)
Mkt Cap. 14,484.7 46,519.1 20,195.4 10,292.3 11,824.6 4,803.3
Enterprise Value 14,369.9 47,867.1 20,946.4 10,234.3 12,073.6 4,562.3
EBITDA Margin (%) 32.8 19.3 16.4 16.6 12.8 10.5
Net Profit Margin (%) 21.5 2.8 - 1.0 0.5 -
P/E (x) 39.9 204.0 - 371.0 973.2 -
EV/EBITDA (x) 25.9 30.5 25.9 21.5 37.7 17.0
RoE (%) 34.5 10.8 - 2.0 2.0 -
RoCE (%) 40.6 21.1 - 8.0 12.7 -
EV/Sales 8.5 5.9 4.2 3.6 4.8 1.8

For Travel Food Services Ltd, the Market Cap, P/E (x), Enterprise Value, EV/EBITDA (x) and EV/Sales (x) are calculated on post-issue equity share capital based on the upper
price band.

RoE and RoCE calculated on Pre-issue capital

CMP of peer companies is as of 03rdJuly, 2025. Travel Food Services Ltd does not have any listed like to like industry peers in India. We have chosen the above companies
as peers based on the disclosure made by company in RHP.

Source: RHP, SSL Research

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 Travel Food Services Ltd Travel QSR

SBICAP Securities Limited

(CIN): U65999MH2005PLC155485 I Research Analyst Registration No INH000000602
SEBI Registration No.: Stock Broker: INZ000200032 | CDSL: IN-DP-314-2017 | NSDL: IN-DP-NSDL-369-2014 | Research Analyst: INH000000602
IRDA/RW/IR2/2015/081 | IRDA/RW/IR1/2016/041 | IRDA: CA0103
Registered & Corporate Office: Marathon Futurex, A Wing, 12th Floor, N. M. Joshi Marg, Lower Parel, Mumbai-400013.

For any information contact us:

022-6854 5555
E-mail: [email protected] I Web: www.sbisecurities.in

DISCLOSURES & DISCLAIMERS:

Analyst Certification: The views expressed in this research report ("Report") accurately reflect the personal views of the research analysts ("Analysts") employed by SBICAP
Securities Limited (SSL) about any and all of the subject issuer(s) or company(ies) or securities. This report has been prepared based upon information available to the public
and sources, believed to be reliable. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendation(s)
or view(s) in this report.
The Analysts engaged in preparation of this Report or his/her relative:-
(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1 or more of the equity securities of the subject company
mentioned in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of interest at the
time of publication of the Report.
The Analysts engaged in preparation of this Report:-
(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of securities for the subject
company in the past twelve months; (c)have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in
the past twelve months; (d) have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the
subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection with the Report;
(f) has not served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company.

Name Qualification Designation

Sudeep Shah MMS-Finance DVP- Technical & Derivative Research
Sunny Agrawal B.E, MBA (Finance) DVP - Fundamental Research
Rajesh Gupta PGDBM (Finance), MA (Bus. Eco) AVP - Fundamental Research
Monica Chauhan C.A. Research Analyst - Equity Fundamentals
Harsh Vasa CA Research Analyst - Equity Fundamentals
Sumeet Shah B.E., CFA Research Analyst - Equity Fundamentals
Sweta Padhi MBA (Finance) Research Analyst - Equity Fundamentals
Uday Chandgothia B-Tech, MBA (Finance) Research Associate - Equity Fundamentals
Arnav Sane BMS (Finance) Research Associate - Equity Fundamentals
Shubham Purohit BMS (Finance) Research Associate - Equity Fundamentals
Gautam Updhyaya MBA (Finance) Research Analyst - Equity Derivatives
Vinayak Gangule BE (IT) Research Analyst - Equity Technicals
Ashwin Ramani B.Com Research Analyst- Equity Technicals
Sagar Peswani B.Tech (ECE) Research Associate - Equity Technicals
Kalpesh Mangade B.Com MIS Analyst - Retail Research

For other Disclosures please visit: https://bit.ly/R_disclaimer02

Sudeep Shah Sunny Agrawal

DVP – Technical & Derivative Research DVP – Fundamental Research

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