TBO Tek Ltd Management Discussions

1. Industry Structure and Developments

Global Context

In 2024, international arrivals climbed back to 1.4 billion trips – 99% of 2019 levels and an 11% year-on-year gain. Demand was broad-based across source markets: the Middle East eclipsed its pre-pandemic baseline by 32%, Asia-Pacific arrivals jumped by one-third, Europe saw a 5% uplift, and the Americas recovered to 97% of their 2019 volumes.¹ As a result, International tourism receipts reached USD 1.6 trillion,² underscoring the sectors powerful economic resurgence.

Indian Market Dynamics

Indias travel and tourism sector saw steady growth in outbound travel in FY 2024–25, fuelled by rising disposable incomes, digital penetration, and infrastructure investments. Outbound travel expenditure in the first half of 2024 was 81 % above 2019, reflecting the countrys growing significance on the global stage.³

Supply-side investments are equally strong: Indian carriers placed orders for 1,120 aircraft, expanding the fleet from roughly 730 in 2024 to nearly 2,000 by 2030, and infrastructure spending of over USD 170 billion is slated through 2030 to upgrade existing hubs and build new airports.⁴ Regulatory reforms are also easing travel: the 2025 Union Budget raised the TCS threshold for overseas remittances to INR 10 lakh,⁵ and more than 60 countries now offer visa-free or e-visa access to Indian citizens.⁶

India has about 200,000 branded hotel rooms, and the number is expected to grow to 300,000 by 2030⁷. In fiscal year 2025 (FY25), The Indian Hotels Company (IHCL) expanded its portfolio by adding 100 new locations, which includes 74 new signings and 26 hotel openings. IHCLs total portfolio increased to 380 hotels. The Oberoi Group plans to open 50 new hotels by 2030. Marriott International Inc. is also aiming to increase its room count to 50,000 over the next 3-5 years.

New demand pockets are emerging beyond the metros, supported by Smart City and UDAN (Ude Desh ka Aam Naagrik) regional connectivity initiatives⁸. Meanwhile, low-cost and full-service carriers are launching direct international routes from tier-2 and tier-3 airports, further democratizing travel access. Indian travellers are not only traveling more frequently but also spending more on experiences - 25–30 % of outbound budgets now goes toward cultural activities, guided tours, and culinary journeys⁹.

[For more information, please refer to Our Business & Strategic Framework section of the Annual Report]

2. Opportunities and Threats

Opportunities:

Growth in Outbound Tourism: Outbound tourism rebounded strongly in 2024, with global arrivals reaching 1.4 billion¹—near pre-pandemic levels. India led with 81% higher outbound spending vs. 2019, driven by rising incomes, better connectivity, and policy support. With growing demand for frequent and richer travel experiences, both globally and in India, the segment is set for sustained growth.

Niche Segments: Specialized verticals – adventure tourism, sports and musical concerts specific tourism is gaining popularity with Indians travelling internationally to witness their favourite cricket matches e.g. ICC Champions Trophy Finale in Dubai, or the Coldplay Tour in India and the UAE.

Digital Transformation: The integration of AI-driven personalization engines, machine-learning demand forecasting, and blockchain for secure, transparent transactions can streamline back-office operations, enhance customer experiences, and reduce service costs¹⁰.

Premium & Luxury Travel: With the global luxury hotel market projected to grow at an 11.5 percent CAGR to USD 369 billion by 2032, there is a clear opportunity to curate high-margin, experience-led offerings tailored to affluent travellers seeking exclusivity and bespoke services¹¹.

Strategic Partnerships & M&A: Targeted alliances and acquisitions in mature and high-growth markets can rapidly expand our geographic footprint, accelerate technology adoption, and deepen supplier relationships, reinforcing our competitive positioning.

Threats:

Competitive Intensity: Escalating rivalry from global OTAs, agile domestic platforms, and vertical consolidators continues to compress commission margins and demands relentless innovation in service and pricing¹².

Macroeconomic Volatility: Inflationary pressures, currency fluctuations, and shifts in discretionary spending can lead to unpredictable swings in consumer travel budgets and booking behaviour¹³.

Supplier Dependence: Our commercial model relies heavily on negotiated commission structures with airlines, hotel chains, and ancillary providers. Any shift in supplier pricing policies or contract terms, such as reduced commission rates or higher booking fees can directly compress our profitability. Proactive supplier portfolio diversification and long-term partnership agreements are critical to mitigate this risk.

Cybersecurity & Data Privacy: Managing large volumes of sensitive customer and payment data entails stringent compliance requirements and breach risks, necessitating ongoing investment in SOC 2 controls, penetration testing, and privacy-by-design practices¹⁴.

Regulatory & Geopolitical Risks: Sudden changes in visa policies, travel advisories, or regional conflicts can disrupt demand patterns and route viability, requiring agile market monitoring and contingency planning¹⁵.

3. Company Outlook

The Company is well-positioned to harness the robust expansion of the global travel industry, which is expected to grow at a compound annual growth rate of approximately 8.2%, reaching nearly US $2.6 trillion by 2027.Against this backdrop, the Company delivered exceptional performance in FY 2025: revenue surged 25% to INR 1,737 crore, adjusted EBITDA increased over 22%, and gross transaction value rose 16% year-on-year. These strong results, backed by strategic acquisitions like Jumbonline and a strengthened B2A platform, underscore the efficacy of our expansion strategy across Asia-Pacific, the Middle East, Africa, and Latin America.

Looking ahead, we anticipate continued momentum fueled by key industry drivers—including rising outbound passenger traffic projected to reach 42 million by 2027 and the outbound market growing at an 11.1% CAGR . Our expansion roadmap includes further investment in regional offices (notably in Asia-Pacific), doubling local sales and operations teams, and deepening partnerships and integrations to enhance personalization and platform scalability. With strong liquidity from our recent IPO, minority investment backing, and ongoing macro-industry tailwinds, the Company is poised for sustainable, profitable growth as a leader in global B2B travel distribution.

[For more information, please refer to Our Business & Strategic Framework section of the Annual Report]

4. Risks and Concerns

Risk Category	Description	Mitigation
Macroeconomic Supply	Inflation and currency swings Supplier contract changes	Active hedging and diversified markets Long-term agreements and diversified supplier base
Cybersecurity Regulatory	Data breaches and compliance Visa policy and travel advisories	SOC 2 compliance and regular audits Agile policy monitoring and alternative markets
Geopolitical risks	Shifts in regional stability leading to disruption in route planning and reduction in demand	Agile route-alignment protocols and diversified supplier/market footprint

5. Internal Control Systems and their adequacy

The Company has established a robust system of internal controls, tailored to the scale and complexity of its operations. These controls, supported by standardized and coordinated processes, safeguard assets and enhance operational efficiency. Aligned with the corporate governance framework, the risk management and control procedures ensure compliance with established principles of accountability and sound management. These systems are embedded across the organizational structure, with cross-functional teams working collaboratively to fulfill their responsibilities effectively.

6. People & Culture

TBO Global family of 2,300+ members spans more than 55 locations worldwide. We are proud of our workplace diversity, with 34% female participation in our workforce. In the past year, we invested heavily in talent development, delivering 3,800+ hours of training and engaging employees in leadership programs.

Initiatives:

Values Workshops: We conducted multiple interactive workshops across our global offices, engaging employees to bring our core values - Care, Collaboration, Innovation and Integrity to life, in everyday work.

Feedback Platforms:Our TBO Reach and TBO Voice channels achieved an outstanding participation rate, enabling employees to share candid insights on policies, processes, and culture; this high engagement has directly informed enhancements to our flexible work and communication frameworks.

Wellness Programs: Through our Employee Assistance Program and onsite health camps, significant number of employees took part in mental health counselling, fitness workshops, and preventive health screenings—underscoring our commitment to holistic wellbeing.

7. Key Financial Ratios

Please refer Note 44 of Standalone audited financial statements for details of significant changes in key financial ratios, along with detailed explanations thereof.

8. Consolidated Financial Performance Overview:

Profit and Loss Statement

Income

Total income increased from INR 14,210.46 million in FY24 to INR 17,993.05 million in FY25 primarily due to an increase in revenue from contracts with customers which is in line with an increase in transaction volumes on the Companys platforms.

	For the year ended
Particulars	March 31, 2025	March 31, 2024	Variance % YoY
	(INR million)
Income
Revenue from operations
Revenue from Contract with Customers	16,140.39	12,809.09	26.01

 

	For the year ended
Particulars	March 31, 2025	March 31, 2024	Variance % YoY
	(INR million)
Other operating revenue	1,234.34	1,119.10	10.30
Revenue from operations	17,374.73	13,928.19	24.75
Other income	618.32	282.27	119.05
Total Income	17,993.05	14,210.46	26.62

Revenue from Operations

Revenue from operations increased by 24.75% from INR 13,928.19 million in FY24 to INR 17,374.73 million in FY25, primarily due to a significant increase in the customers utilizing the Companys platforms. Take rate (revenue from operations divided by GTV) has improved from 5.25% in FY24 to 5.64% in FY25, primarily due to improvement in hotels GTV saliency from 50% in FY24 to 59% in FY25.

Revenue from Contract with Customers

Revenue from contracts with customers increased by 26.01% from INR 12,809.09 million in FY24 to INR 16,140.39 million in FY25. Increase in revenue from operations – revenue from contracts is mainly contributed by significant increase in hotels and ancillary revenue in international markets, which is partially offset with decline in Revenue from Air Ticketing. Revenue from Hotel & Packages as a percentage of total revenue from operations has increased from 68.13% in FY24 to 74.02% in FY25. The following table sets forth revenue from contracts with customers presented in accordance with the types of services offered by company for the periods indicated:

	For the year ended March 31, 2025		For the year ended March 31, 2024
Types of service	Amount	Percentage of Revenue from Operations	Amount	Percentage of Revenue from Operations
	(INR million)	(%)	(INR million)	(%)
Air Ticketing	2,895.53	16.67	2,994.39	21.50
Hotel and Packages	12,861.37	74.02	9,489.23	68.13
Technical Service	25.36	0.15	37.31	0.27
Other Services	358.13	2.06	288.16	2.07
Total revenue from contract with customers	16,140.39	92.90	12,809.09	91.97

Other Operating Revenue

Other operating revenue increased by 10.30% from INR 1,119.10 million in FY24 to INR 1,234.34 million in FY25 primarily due to an increase in business volumes during the year. The following table sets forth its other operating revenue presented in accordance with the types of services it offers for the periods indicated:

	For the year ended March 31, 2025		For the year ended March 31, 2024
Types of service	Amount (INR million)	Percentage of Revenue from Operations (%)	Amount (INR million)	Percentage of Revenue from Operations (%)
Air Ticketing	379.37	2.18	471.97	3.39
Hotel and Packages	854.97	4.92	647.13	4.65
Total other operating revenue	1,234.34	7.10	1,119.10	8.03

Other Income

Other income increased from INR 282.27 million in FY24 to INR 618.32 million in FY25, primarily due to an increase in Interest income from financial assets from INR 115.62 million in FY24 to INR 351.25 million in FY25 mainly from deployment of unutilised proceeds from IPO. Increase is further contributed by increase in income from investments in short term debt based mutual funds from INR 35.55 million in FY24 to INR 60.24 million in FY25 and increase in liabilities no longer required written back from INR 121.94 million in FY24 to INR 189.58 million in FY25.

Expenses

Total expenses increased by 29.53% from INR 11,869.38 million in FY24 to INR 15,374.45 million in FY25, primarily due to an increase in service fees, employee benefits expenses and other expenses. The increase in total expenses has been higher than the increase in our revenue from operations due to expenses incurred during current year as investment towards future growth.

	For the year ended
Particulars	March 31, 2025	March 31, 2024	Variance % YoY
	(INR million)
Service fees	5,439.77	4,707.29	15.56
Employee benefit expense	3,760.92	2,773.43	35.61
Finance costs	232.77	106.49	118.58
Depreciation and amortisation expenses	518.82	361.63	43.47
Share Issue Expenses	30.45	20.31	49.93
Net loss on foreign exchange differences	257.22	55.70	361.80
Other Expenses	5,134.50	3,844.53	33.55
Total expenses	15,374.45	11,869.38	29.53

Service Fees

Service fee expenses increased by 15.56% from INR 4,707.29 million in FY24 to INR 5,439.77 million in FY25, primarily due to the increase in the Companys business volumes with a consequent increase in service fees.

As a result, Gross Profit (computed as revenue from operations less service fees) has increased by 29.43% from INR 9,220.90 million for FY24 to INR 11,934.96 million for FY25.

Employee Benefits Expense

Employee benefits expense increased by 35.61% from INR 2,773.43 million in FY24 to INR 3,760.92 million in FY25, primarily due to an increase in salaries, bonuses, allowances and benefits from INR 2,689.34 million in FY24 to INR 3,675.19 million in FY25 on account of an increase in number of on-roll employees as investment towards future growth and compensation increments given to employees, an increase in contribution to provident and other funds from INR 93.43 million in FY24 to INR 107.30 million in FY25; an increase in employee stock option expense from INR 92.37 million in FY24 to INR 248.59 million in FY25 on account of an increase in options granted in FY25 under the TBO Employees Stock Option Scheme 2021 and also due to increase in the share value post listing; and increase in gratuity expense from INR 43.31 million in FY24 to INR 49.90 million in FY25.

This also includes Staff welfare expense of INR 106.23 million in FY25 against INR 130.16 million in FY24. Further, employee benefit expense amounting to INR 426.29 million has been capitalised during FY25 against INR 275.18 million in FY24, as part of Intangible assets (including intangible assets under development) on account of various on-going tech projects.

Finance Costs

Finance costs increased from INR 106.49 million in FY24 to INR 232.77 million in FY25 primarily due to an increase in interest on borrowings from INR 11.62 million in FY24 to INR 119.52 million in FY25 due to full year interest charge on term loan taken towards end of FY24 in subsidiary company, and increase in interest recognised on deferred consideration in relation to business combination from INR 12.29 million in FY24 to INR 37.80 million in FY25. This also includes Interest expense on lease liabilities of INR 71.89 million in FY25 against INR 69.45 million in FY24.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses increased by 43.47% from INR 361.63 million in FY24 to INR 518.82 million in FY25, on account of increase in depreciation on property, plant and equipment from INR 50.85 million in FY24 to INR 64.53 million in FY25, amortisation of intangible assets from INR 202.44 million in FY24 to INR 331.48 million in FY25 due to additional intangible assets capitalised during the year and increase in depreciation on right-of-use assets from INR 108.34 million in FY24 to INR 122.81 million in FY25 due to full year impact of additional office space taken on lease in FY24.

Net loss on foreign exchange differences

Net loss on foreign exchange differences have increased majorly from INR 55.70 million in FY24 to INR 257.22 million in FY25, primarily due to high volatility in foreign exchange rates during the year.

Other Expenses

Other expenses increased by 33.55% from INR 3,844.53 million in FY24 to INR 5,134.50 million in FY25, primarily on account of following: •Hosting and bandwidth charges increased from INR 399.78 million in FY24 to INR 589.07 million in FY25, due to increase in bandwidth usage as result of higher transaction volumes on the TBO platforms;

•Legal and professional expenses increased from INR 268.99 million in FY24 to INR 321.82 million in FY25 on account of increase in fees paid to legal consultants and other professional services availed;

•Software license fee increased significantly from INR 92.30 million in FY24 to INR 160.68 million in FY25, on account of the license fee paid for various additional software procured in line with increase in Companys operations;

•Advertising and marketing expenses increased from INR 298.44 million in FY24 to INR 346.56 million in FY25 on account of increased marketing initiatives;

•Insurance expense increased from INR 85.46 million in FY24 to INR 129.73 million in FY25, mainly on account of the higher coverage during the year in line with increase in business volume; •Payment gateway charges increased from INR 1,029.82 million in FY24 to INR 1,200.41 million in FY25 which was consistent with the increase in the Companys business and an increase in revenue from contracts with customers;

•Business support services significantly increased from INR 908.89 million in FY24 to INR 1,317.46 million in FY25, primarily on account of an increase in off-roll consultants during the year as investment towards future growth.

•Net impairment losses on financial assets which include provisions for bad debts, have increased from INR 97.44 million in FY24 to INR 250.07 million in FY25 due to higher specific case-based, as well as higher Expected Credit Loss (ECL) - based provisioning during the year.

Exceptional items

Exceptional items include INR (127.12) million recovered from earlier written-off receivables. Exceptional items in FY24 included INR 81.02 million on account of advances related to one of the airline suppliers written off; net of INR (9.06) million recovered from earlier written-off receivables.

Profit / Loss for the Year

With all the reasons discussed above, the company has recorded a profit of INR 2,298.91 million in FY25 compared to INR 2,005.73 million in FY24.

Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024
Profit/(loss) for the year (A)	2,298.91	2,005.73
Tax Expense (B)	446.81	263.39
Profit/(loss) before tax (C=A+B)	2,745.72	2,269.12
Add: Finance costs (D)	232.77	106.49
Add: Depreciation and amortisation expenses(E)	518.82	361.63
Add: Net loss on foreign exchange differences (F)	257.22	55.70
Less: Other income (G)	(618.32)	(282.27)
Add: Exceptional items/ (H)	(127.12)	71.96
Earnings before interest, taxes, depreciation and amortization expenses (EBITDA) (I= C+D+E-F-G+H)	3,009.09	2,582.63
Add: Share issue expenses (J)	30.45	20.31
Add: Employee Stock Option Expense (K)	248.59	92.37
Adjusted Earnings before interest, taxes, depreciation and amortization expenses (Adjusted EBITDA) (L= I+J+K)	3,288.13	2,695.31
Revenue from operations (M)	17,374.73	13,928.19
Adjusted EBITDA Margin (Adjusted EBITDA as a percentage of Revenue from operations) (N = L/M)	18.92%	19.35%

Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) and EBITDA Margin

EBITDA has increased from INR 2,582.63 million in FY24 to INR 3,009.09 million in FY25, while EBITDA Margin (EBITDA as a percentage of Revenue from Operations) has been 17.32% in FY25 compared to 18.54% in FY24, mainly due to expense being incurred during FY25 as investment for future growth.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortisation (Adjusted EBITDA) and Adjusted EBITDA Margin

Adjusted EBITDA is calculated as profit for the year plus finance cost, depreciation and amortization expenses, net loss on foreign exchange differences, exceptional items, share issue expenses and employee stock option expense less other income while Adjusted EBITDA Margin is the percentage of Adjusted EBITDA as a percentage of revenue from operations.

Adjusted EBITDA was INR 3,288.13 million in FY25 compared to INR 2,695.31 million in FY24, while Adjusted EBITDA Margin (Adjusted EBITDA as a percentage of Revenue from Operations) was 18.92% in FY25 compared to 19.35% in FY24.

BALANCE SHEET Capital Expenditure

The capital expenditure towards additions to fixed assets (property, plant and equipment, goodwill & intangible assets (including under development)) was INR 3,192.70 million as at March 31, 2025, against INR 2,959.84 million as at March 31, 2024. The following table sets forth fixed assets as of the periods indicated:

Particulars	As at March 31, 2025	As at March 31, 2024
Property, plant and equipment	127.90	129.79
Goodwill	912.41	886.49
Other Intangible Assets	1,763.37	1,804.82
Intangible assets under development	389.10	138.74
Total	3,192.78	2,959.84

Additions during the year mainly include purchase of computer systems in normal course of business and additional investments in various internally developed IT projects. The above-mentioned increases were offset by depreciation charged for the year.

Intangible assets under development mainly comprises of cost in relation to further development of travel integration website.

Investments

The Companys investments (Non-current & current) stood at INR 1,725.16 million as at March 31, 2025 against INR 20.34 million as at March 31, 2024. These majorly include investments done in debt based, short term mutual funds.

Trade Receivables

Trade Receivables have increased from INR 33,066.99 million as at March 31, 2024 to INR 40,613.04 million as at March 31, 2025, which is in line with increase in year-on-year business volume.

Cash, cash equivalents and bank balances

Cash, cash equivalents and bank balances have increased from INR 8,540.83 million as at March 31, 2024 to INR 12,850.60 million as at March 31, 2025. Increase is contributed by proceeds from IPO and accumulated profits during the year.

Other financial assets (Current & Non-Current)

Other financial assets (Current & Non-Current) have decreased from INR 755.32 million as at March 31, 2024 to INR 584.50 million as at March 31, 2025. This is contributed majorly by decline in recoverable of tax collected at source from airlines in India, decline in receivable from service providers providing collection services to the overseas subsidiary company, and is offset by increase in security deposits paid during the year.

Other assets (Current & Non-Current)

Other assets (Current & Non-Current) majorly include advances given to suppliers, which have marginally increased from INR 2,404.38 million as at March 31, 2024 to INR 2,339.53 million as at March 31, 2025.

Borrowings (Current & Non-Current)

Borrowings (Current & Non-Current) include term loan taken by subsidiary company stand at INR 1,363.79 million as at March 31, 2025 against INR 1,350.83 million as at March 31, 2025.

Other financial liabilities (Current & Non-Current)

Other financial liabilities (Current & Non-Current) have decreased from INR 1,601.93 million as at March 31, 2024 to INR 1,354.48 million as at March 31, 2025, mainly driven by payment of due liability towards business acquisition done during last FY. This also includes amount payable to employees which have increased from INR 181.99 million as at March 31, 2024 to INR 307.40 million as at March 31, 2025 due to increase in employees during the year, and refunds payable to customers which have declined from INR 471.31 million as at March 31, 2024 to INR 345.44 million as at March 31, 2025.

Employee benefit obligations (Current & Non-Current)

Employee benefit obligations (Current & Non-Current) have increased from INR 257.89 million as at March 31, 2024 to INR 301.56 million as at March 31, 2025. These include provisions for Gratuity and Leave Encashment, and increase is due to increase in on-roll employees and increments during the year.

Trade payables

Trade payables have increased from INR 36,033.17 million as at March 31, 2024 to INR 43,212.07 million as at March 31, 2025, which is in line with increase in year-on-year business volume.

Contract Liabilities

Contract Liabilities majorly include advance received from customers (travel buyers) for issue of tickets and hotel packages and have decreased from INR 2,523.82 million as at March 31, 2024 to INR 2,423.54 million as at March 31, 2025.

Other liabilities (Current & Non-Current)

Other liabilities (Current & Non-Current) stand at INR 491.12 million as at March 31, 2025, against INR 489.36 million as at March 31, 2024. These include Statutory dues payable and outstanding refunds liability as on closing date.

Shareholders Funds Share Capital

The Companys share capital stood at INR 108.59 million as at March 31, 2025. [108,587,787 equity shares of INR 1 Each] (Previous year: INR 104.24 million [104,239,961 equity shares of INR 1 Each]).

Other Equity

The Companys other equity as at 31 March 2025 was of INR 11,841.98 million in comparison to INR 5,343.83 million as at 31 March 2024.