India’s Travel Boom: Why Motilal Oswal Favors TBO Tek and Ixigo

India’s travel landscape is undergoing a massive structural shift as digital adoption and rising disposable incomes transform the sector from an offline-led market to a high-tech ecosystem. Motilal Oswal has identified TBO Tek and Ixigo as primary beneficiaries of this growth, driven by a projected surge in online travel bookings.

The Rapid Expansion of India’s Online Travel Market

The Indian online travel market is poised to significantly outpace global growth trends. According to recent projections, the market is expected to expand from approximately INR 2.1 trillion in FY23 to INR 3.8 trillion by FY28, representing a Compound Annual Growth Rate (CAGR) of roughly 13%.

This growth is fueled by several structural tailwinds, including improving transportation infrastructure, increased workforce participation, and a consumer shift toward experience-led spending. Furthermore, digital penetration is expected to rise from the current 54% to nearly 65% of all travel bookings. As the industry matures, scalability will increasingly depend on technological integration, specifically the use of Artificial Intelligence for hyper-personalized planning and real-time decision-making.

TBO Tek: Scaling Through Global Integration

Motilal Oswal maintains a "BUY" stance on TBO Tek, citing its resilient performance and successful integration of Classic Vacations. Despite geopolitical disruptions in certain corridors, the company has shown significant growth potential. In 4QFY26, TBO Tek reported an 83% year-on-year revenue increase, bolstered by the consolidation of Classic Vacations, while organic revenue grew by 21%.

The company's growth strategy relies heavily on high-margin segments such as hotels and ancillary services. Analysts project a robust revenue, EBIT, and PAT CAGR of 37%, 35%, and 30% respectively over the FY25-28E period. This optimism is underpinned by TBO Tek's ability to expand its international footprint and leverage synergies from its recent acquisitions.

Ixigo: Dominating the Tier-2 and Tier-3 Markets

Le Travenues Technology (Ixigo) has carved out a unique niche by targeting the heart of India. With a monthly active user base of 85 million, approximately 94% of Ixigo’s bookings involve origins or destinations in non-tier-1 cities. This deep penetration into Tier-2 and Tier-3 towns provides a significant competitive moat.

Ixigo stands as a market leader in train ticketing with a massive ~60% market share, while also maintaining a strong presence in flights and bus bookings. In FY26, the company recorded a Gross Transaction Value (GTV) of INR 187 billion. Looking ahead to FY26-28E, Ixigo is expected to deliver a staggering PAT CAGR of 51%, with EBITDA margins projected to improve by 400 basis points to reach 10% by FY28, driven by operating leverage and efficient customer acquisition costs.

Key Takeaways

  • Massive Market Upside: India's online travel market is projected to grow from INR 2.1 trillion (FY23) to INR 3.8 trillion (FY28) at a 13% CAGR.
  • TBO Tek’s Global Edge: Driven by the Classic Vacations integration, TBO Tek is expected to see a 37% revenue CAGR through FY28.
  • Ixigo’s Regional Dominance: By capturing the non-metro segment, Ixigo holds a ~60% share in train ticketing and is poised for a 51% PAT CAGR.