India’s Travel Boom: Why Motilal Oswal is Bullish on TBO Tek and Ixigo

India’s travel and leisure sector is undergoing a massive structural shift, moving from a fragmented offline market to a digitally-led powerhouse. As rising disposable incomes and improved infrastructure drive demand, online travel platforms are positioned to capture a significant share of this expanding economy.

A Multi-Trillion Rupee Growth Opportunity

The Indian online travel market is set to significantly outpace global growth trends. According to recent analysis, the market is projected to expand from approximately INR 2.1 trillion in FY23 to INR 3.8 trillion by FY28, representing a robust CAGR of around 13%.

A critical driver of this growth is the increasing digital penetration. While online channels currently account for about 54% of total travel bookings, this figure is expected to rise to nearly 65%. This shift is being fueled by several structural tailwinds, including favorable demographics, increasing workforce participation, and a growing consumer preference for "experience-led" spending. Furthermore, the integration of Artificial Intelligence (AI) is set to transform the industry through hyper-personalized planning and dynamic packaging.

TBO Tek: Scaling Through Global Integration

Motilal Oswal maintains a "BUY" stance on TBO Tek, highlighting its resilience despite geopolitical disruptions. The company's growth is being significantly bolstered by the integration of Classic Vacations, which is expected to enhance scale and operating synergies.

The financial momentum for TBO Tek is notable:

  • Revenue Growth: The company reported an 83% YoY revenue increase in 4QFY26, driven largely by the consolidation of Classic Vacations (organic revenue grew by 21% YoY).
  • Profitability: EBITDA rose 23% YoY, while PAT saw a 2% increase.
  • Future Outlook: Analysts expect a high growth trajectory for FY25-28E, with a projected CAGR of 37% in revenue, 35% in EBIT, and 30% in PAT. This growth will be driven by higher-margin segments like hotels, holiday packages, and ancillary services.

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

Le Travenues Technology (Ixigo) has carved out a unique niche by capturing the massive demand from India's non-metro regions. With a monthly active user base of 85 million, approximately 94% of Ixigo's bookings involve either an origin or destination in non-tier-1 cities.

Ixigo's market position is reinforced by its dominance in specific niches:

  • Market Leadership: The company holds a commanding ~60% market share in the train ticketing segment.
  • Transaction Volume: In FY26, Ixigo reported a Gross Transaction Value (GTV) of INR 187 billion, spanning flights (INR 75b), trains (INR 83b), and buses (INR 26b).
  • Efficiency and Margins: By using a multi-app, multi-brand strategy, Ixigo has maintained lower customer acquisition costs. Analysts project an EBITDA margin improvement of 400bps to 10% by FY28E, supported by operating leverage.

Key Takeaways

  • Massive Market Expansion: India's online travel market is expected to reach INR 3.8 trillion by FY28, growing at a 13% CAGR.
  • Strategic Consolidation: Companies like TBO Tek are using M&A (such as the Classic Vacations integration) to drive scale and access higher-margin international segments.
  • The Rise of Bharat: Ixigo’s success underscores the importance of Tier-2 and Tier-3 cities, which drive the bulk of India's travel volume through train and bus bookings.