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

India’s travel and leisure sector is undergoing a massive structural transformation, shifting from a fragmented offline market to a digitally-led ecosystem. As rising disposable incomes and improved infrastructure fuel demand, online travel platforms are positioned to capture a significant share of this burgeoning market.

A Rapidly Expanding Online Travel Market

The Indian online travel market is set to outpace global growth trends significantly. Projections indicate the market will 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. Currently, online channels account for about 54% of total travel bookings, but this is expected to rise to nearly 65%. This shift is being powered by several structural tailwinds, including favorable demographics, increased workforce participation, and a consumer pivot toward experience-led spending. Furthermore, the integration of Artificial Intelligence (AI) is expected to revolutionize the sector through hyper-personalized planning and real-time decision-making.

TBO Tek: Leveraging Global Synergies

Motilal Oswal maintains a "BUY" stance on TBO Tek, citing its diversified platform and strong execution capabilities. Despite geopolitical disruptions, the company has shown remarkable resilience. In 4QFY26, TBO Tek reported an 83% YoY revenue growth, largely bolstered by the consolidation of Classic Vacations. Even when looking at organic growth, revenue increased by 21% YoY.

The company's growth trajectory is expected to remain steep, with projected revenue, EBIT, and PAT CAGRs of 37%, 35%, and 30% respectively over the FY25-28E period. This growth is expected to be driven by higher-margin segments such as hotels and ancillary services, alongside the expanding scale gained from the Classic Vacations integration.

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

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

Ixigo stands as a formidable player in the OTA space, boasting an FY26 Gross Transaction Value (GTV) of INR 187 billion. It holds a commanding 60% market share in the train ticketing segment, while also consolidating its presence in flight (INR 75b) and bus (INR 26b) bookings. Analysts estimate that Ixigo will deliver a significant EBITDA CAGR of 59% between FY26-28E, with margins expected to improve by 400bps to reach 10% by FY28E through operating leverage.

Key Takeaways

  • Market Expansion: India's online travel market is projected to grow from INR 2.1 trillion (FY23) to INR 3.8 trillion (FY28), driven by a rise in digital bookings to 65%.
  • TBO Tek Outlook: Expected to see a revenue CAGR of 37% (FY25-28E) due to international expansion and the integration of Classic Vacations.
  • Ixigo's Niche: Dominates the non-metro market with 94% of bookings originating from or heading to non-tier-1 cities and holds a 60% share in train ticketing.