Why Motilal Oswal is Bullish on TBO Tek and Ixigo Amid India's Travel Boom

India's travel and leisure sector is undergoing a massive structural shift, moving from a fragmented offline market to a high-growth digital ecosystem. As rising disposable incomes and improved infrastructure fuel demand, online travel platforms are positioned to capture significant value in this transforming landscape.

A Massive Growth Engine: The INR 3.8 Trillion Opportunity

The Indian online travel market is poised to outpace global growth trends, driven by rapid digital adoption and a consumer shift toward experience-led spending. According to recent industry projections, the market is expected to expand from approximately INR 2.1 trillion in FY23 to an impressive INR 3.8 trillion by FY28. This represents a Compound Annual Growth Rate (CAGR) of roughly 13%.

A critical driver of this expansion is the rising digital penetration within the sector. Currently, digital channels account for about 54% of total travel bookings, but this figure is expected to climb to nearly 65%. This shift is being supported by technological advancements, particularly Artificial Intelligence, which enables hyper-personalized planning and real-time decision-making, making online platforms indispensable to the modern traveler.

TBO Tek: Scaling Through Global Integration

Motilal Oswal maintains a "BUY" stance on TBO Tek, citing its resilient performance and strategic expansion. A major catalyst for the company is the integration of Classic Vacations, which is expected to drive significant operating synergies and scale.

The company's recent financial momentum is noteworthy, with revenue growing 83% YoY in 4QFY26, largely aided by the Classic Vacations consolidation, while organic revenue saw a 21% YoY increase. Looking ahead, analysts expect TBO Tek to deliver a robust CAGR over the FY25-28E period, with revenue, EBIT, and PAT projected to grow at 37%, 35%, and 30% respectively. This growth will be fueled 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 targeting the heart of India. As the second-largest Online Travel Agency (OTA) in terms of FY26 Gross Transaction Value (GTV) at INR 187 billion, Ixigo boasts a massive monthly active user base of 85 million.

What sets Ixigo apart is its deep penetration into non-metro areas; approximately 94% of its bookings have either an origin or destination in a non-Tier-1 city. The company is a dominant force in train ticketing, commanding a market share of roughly 60%. By utilizing a multi-app, multi-brand strategy, Ixigo manages to maintain a structurally lower customer acquisition cost. Analysts project an impressive EBITDA margin improvement of 400 basis points to 10% by FY28E, driven by operating leverage.

Key Takeaways

  • Market Expansion: India's online travel market is projected to reach INR 3.8 trillion by FY28, growing at a 13% CAGR.
  • TBO Tek Outlook: Driven by the Classic Vacations integration, TBO Tek is expected to see a revenue CAGR of 37% through FY28.
  • Ixigo’s Edge: Ixigo dominates the train ticketing segment with a 60% market share and maintains deep penetration in Tier-2 and Tier-3 cities.