TBO Tek

“So, we do expect a tough Q3 because several headwinds in the industry right now.”

“our internal aim right now is that irrespective of the turmoil, let us aim and deliver some top-line and bottom-line growth, which is, honestly at this point, it feels like a stretch target given where the situation is.”

“I am keeping fingers crossed for constant currency growth.”

“Prateek, Q2 to Q3, you know Q2 is our strongest quarter because of seasonality. We are talking year-on-year.”

“But for the rest of this year, we are not expecting to see any significant changes in our investment into market development.”

“Middle East, which has been the most impacted market because of the ongoing conflict, also delivered 10% growth on constant currency basis.”

“Markets like Europe and APAC have delivered north of 30% growth.”

“Europe on a fairly large base, has been becoming our largest source market now, which again is generally a consequence of the investment we had done in market development starting early 2025, which is also visible in the number of active agents continuing to grow at a solid pace.”

“Our belief is that if the conflict remains, if the conflict prolongs, then probably that is one corridor which will have relatively less headwinds because of what is happening elsewhere in the world.”

“If Middle East is delivering 10% growth in a quarter like the previous quarter, they will definitely expect it to deliver more growth next year when peace returns.”

“No, Karan, there is definitely pressure on demand, and this has actually elevated in October because October has been a very very volatile month globally, as you are aware.”

“See, at this point, it is not that the channel shift has happened towards travel agents, and which is why we believe that we would have grown faster if this whole crisis had not happened, right?”

“While the quarter has been tough, our belief in the organic business remains because of the fact that the underlying metrics, which is number of active agents, bookings per active agent, and growth in our ancillary businesses all continue to point to strong revival”

“Even if demand by numbers is reducing, demand by dollar revenue is still a little bit more stable and also focusing on high-value transactions.”

“We know that historically, Q3 is also the weakest quarter in travel, so that is just how seasonality works.”

“we are continuing to invest in building or using AI and technology to automate processes, to build tools for our sales team to become more effective, and tools for our operations team to automate a fair bit of work that they do. This is one of the reasons why you will see that our constant currency SG&A growth has been high single digits and significantly outpacing our top-line growth.”

“In the long run, conceptually, I feel we have gotten to a point where we know that the investment in SG&A should largely be less than the growth in GP that we are anticipating.”

“we do not need any incremental investment, just the improvement in climate and any upside in GP that will happen will directly fall to the bottom line.”

“But having said that, the upside with Classic is that the GP is significantly more, right? It is almost double the GP of the organic business”

“But at the GP level, there would be some differences, but B2A business would obviously be marginally higher than the API business in terms of the, at the GP level.”

“We generally hedge between 75% of our open exposures.”

“Now we have got some credit lines, so that has also helped in releasing some cash back into the system.”

“For example, there were certain overdue, specifically in the Middle East, due to the war situation and the Eid at the March end, those receivables had got released. We had certain receivables because of the anticipation-related thing that we had not done in Brazil in the last year. Those receivables have been released.”

“We have hired about 20 new people in sales since we acquired the business.”

“The tech integration for the TBO platform being available to Classic is in the works. A beta launch is expected to happen later this month, in the latter half of November.”

“The tech platform integration for TBO supply into Classic is completed.”

“They were running on a very short-staffed sales org of 10, 12 people to service 10,000 bookers, and I think we were losing opportunity over there.”

“This will start to deliver demonstrable results somewhere in the next couple of quarters.”

“The Americas supply org, both for TBO and Classic, is now rolled into Joel, who came from Classic, and now she is in charge for both TBO and Classic supply for all of Americas.”

“Similarly, Bonty, who again comes from Classic, is now in charge of all of Europe supply for both TBO and Classic.”

“So, relating to the exceptional cost of Rs 8.1 crores, just to give a background that after the quarter end, we had identified certain irregularities involving suspected collusion among some employees, which led to some unauthorized bookings made in some government travel agency account.”

“But based on the preliminary assessment, we have estimated that net financial loss of around Rs. 8 crores in the subsidiary.”

“As a group, we have also taken the insurance for such matter and incidents, and we have also initiated the process for the insurance claim in respect of the above matter.”

“But in the current quarter, basically on that unhedged exposure, we had certain losses.”

“It is pertaining to our Dubai, the Middle East, the UAE subsidiary.”

“The crisis in Saudi with the attacks happening on Saudi airports meant that both Saudi inbound and Saudi outbound has been very badly hit.”

“the spread of rioting across major European cities has also been a major headwind, especially cities like Paris, Euro countries, cities like Madrid, Barcelona, Italy.”

“We have filed police complaint both in India and UAE regarding the incident.”

“From a long-term perspective, we are undertaking initiatives to automate some of the activities to minimize human interventions basically, so that the risk of collusion is mitigated.”

“Subsequent to again the quarter end, we have received the adjudication order, and based on the advice from our legal consultants, we would be going ahead and filing an appeal against the same.”

“but I do want to highlight that the 16% growth in GTV led to a 27% growth in adjusted EBITDA.”

“It takes three, four years for them to truly max out their own ability to kind of maximize their order book.”

“On the margin, basically, yes, we keep whatever is required as per the arm's length basis transfer pricing margin between the two entities, and it can vary from entity to entity and market to market.”

“In the current quarter as well, the mix is 50:50 only.”

“But because of the different nature of business in Classic, in Classic, we book basis the check-ins in the quarter.”