TBO Tek Ltd Management Discussions

Industry overview

Global travel and tourism industry¹

The global travel and tourism industry has experienced a significant rebound in 2023, with its contribution to global GDP nearing pre-pandemic levels. In CY 2023, it recorded a growth rate of 18.2% year-on-year from 2022 and is currently valued at US$ 1.9 Tn. This growth was primarily driven by a surge in domestic travel spending and a strong recovery in international tourism. With this being said, the industry is forecasted to achieve a compound annual growth rate (CAGR) of 8.2%, reaching US$ 2.6 trillion by 2027.

Growth forecast of the global travel and tourism industry

Global travel and tourism market size (US$ T, 2017-2027P)

According to the United Nations World Tourism Organization (UNWTO), international arrivals in the first quarter of 2023. reached 80% of pre-pandemic levels. Approximately 235 million tourists travelled internationally during this period, which is more than double compared to the same period in 2022. The global travel industrys main growth catalysts include demographic changes, the adoption of flexible work arrangements (such as remote work), the popularity of staycation models, the increasing use of e-visas, enhanced value offerings, the influence of social media on discovering new tourist destinations, and the growing prosperity in emerging economies.² Despite the difficulties the sector has faced, projections point to a strong decade of growth. Travel and tourism contribution to GDP is expected to grow at a CAGR of 6% between 2023 and 2027, outpacing the growth of the overall economy.¹

1Lattice Analysis [1 Lattice Analysis] ²UN TOURISM

Global travel buyer market¹

Globally, there are about 1.5 to 2 million travel buyers across various sizes, based on data from five key economies. These buyers are essential intermediaries, offering customized pricing and inventory solutions. Tourism Australia estimates 100,000 travel agents in the USA, 42,400 in China (National Bureau of Statistics), and 28,700 in Europe (German Travel Association and National Statistics Institute). Travel buyers, divided into five groups in retail and enterprise sectors, cater to different customer demographics, each with unique needs and challenges.

Global travel distribution industry¹

Travel distribution platforms have built an ecosystem for addressing the needs and frictions faced by the highly fragmented base of travel buyers and travel suppliers, thus offering seamless and customized travel experiences to end customers. The total travel spending enabled by travel distribution platforms in 2023 was estimated to be at US $ 1.9 trillion covering global air, hotel, and ancillary market. This is expected to grow at a CAGR of 8.1% from 2023 to 2027 to reach US$ 2.6 trillion driven by the need for aggregating the fragmented global inventory for hotels and airlines for travel buyers and resolving the travel buyers and suppliers concerns.

Indian travel and tourism industry¹

The Indian travel and tourism industry is poised for steady growth, with an annual increase of 7.1%. According to the WTTCs 2023 report, Indias Travel and Tourism GDP grew by 5.9%. The industry is projected to reach US$ 512 billion by 2028 and generate 53 million jobs by 2029, maintaining an annual GDP growth rate of 7-9% until 2030. By FY27, the airline market is expected to double to ~US$ 20 billion, and the hotel market to surge to ~US$ 52 billion. By 2028, international tourist arrivals are expected to surpass 30.5 billion, generating over US$ 59 billion in revenue.³ India is expected to have 220 airports in the coming 5 years, up from the current 148. The domestic air traffic has touched a record high with 4.71 lakh daily passengers. A significant rise in overseas travel spending, which reached $17 billion in FY24, reflects an increase of more than 24.5% compared to $13.6 billion in the previous year. Indias economic boom has also fueled record Schengen visa applications despite delays.⁴ The IATA considers India the most exciting market for aviation. Outbound travel from India is emerging as a future growth engine for global tourism, with travel to Vietnam skyrocketing by nearly 250% compared to

3WTTCs 2023 report ⁴ET:Jun 07,2023 ⁵ET : Dec,2023

2019. Indias position has significantly improved in global rankings, climbing from 54th in 2021 to 39th in the World Economic Forums "Travel & Tourism Development Index (TTDI) 2024.⁵ Some of the emerging segments driving the growth of the Indian travel industry are :

1. Outbound Luxury Travel – Growth in the Indian outbound luxury travel market is driven by rising disposable incomes, increased interest in premium travel experiences, and a growing number of affluent Indian travelers.

2. Cruise Travel - Rising incomes and interest in domestic cruises have pushed the industry beyond pre-pandemic levels. Government efforts to build new terminals and promote places like Goa and Kerala, plus affordable packages for younger travelers, are boosting cruise tourism and the Indian travel industry.

3. MICE Travel - Growth in Indian Meetings, Incentives, Conferences, and Exhibitions (MICE) market is driven by increased corporate events, growth in corporate INC., and enhanced infrastructure in large cities such as Delhi, Mumbai, Goa, Bangalore, and Chennai.

4. Sports Tourism – Growth in Indian sports tourism is driven by the increasing popularity of sports events, especially cricket, FIFA and Grand Prix.

5. Outbound Student Travel – The Indian outbound student travel market is expanding as more and more students are traveling overseas for further education, and being further driven by higher disposable incomes, and better access to international universities.

6. Adventure tourism - Indias diverse landscapes and the National Strategy for Adventure Tourism (NSAT) are driving growth in adventure travel. Improved safety standards, promotion of lesser-known destinations, and increased investment, along with rising internet searches, position India to attract more domestic and international tourists.

Indias infrastructure investments are set to boost tourism through improved connectivity and travel options. Growing internet penetration in rural areas will make travel more convenient, attracting a wider range of tourists and fueling industry growth. In 2024, increased domestic and business travel is projected to drive the market to US$ 23.7 billion.⁶ The surge in domestic tourism presents a prime opportunity for the Indian travel distribution industry, as travelers seek curated experiences beyond standard bookings. This shift benefits distributors offering unique itineraries, driving significant expansion. Evolving traveler preferences and technological advancements will transform the industry, with platforms enhancing user experiences through seamless online payments and personalized offerings.

Government initiatives will also play a major role, with policies like the UDAN scheme boosting connectivity in tier-3 and beyond regions and air travel accessibility. Streamlined processes like e-visas and airport infrastructure investments will further stimulate travel demand and position the Indian air travel industry for growth.

Indian travel buyer market¹

In India, both retail and enterprise travel buyers play a vital role in meeting the diverse needs of the end customer market, offering services ranging from airline to hotel reservations and holiday packages and train bookings. With approximately 275,000 travel buyers nationwide, these entities strive to provide competitive pricing and a wide global inventory for customers to choose from. However, the Indian travel buyer market faces challenges due to its highly fragmented and dispersed nature, making it difficult to offer comprehensive global inventory in one place. This lack of choice leads to lower customer loyalty and poses a significant challenge for buyers.¹ Despite these obstacles, the travel buyer market in India, particularly for airlines and hotels, is experiencing substantial growth driven by factors such as a growing middle-class population, increased disposable incomes, and government initiatives to enhance the travel experience. The market is characterized by four main distribution channels: direct online, direct offline, online platforms, and traditional travel agents. These channels are expected to contribute to the markets growth,

Friction in the travel buyer value chain

Travel buyers currently struggle to offer consumers a seamless travel experience due to several challenges. The travel industry is highly fragmented, with numerous small and mid- sized providers, leading to complexity in distribution. This fragmentation extends to various service providers, including independent hotels, local transfers, tour guides, and car rental companies, with limited adoption of technology. Providing a safe, secure, and seamless experience from booking to arrival and beyond remains a daunting task for travel buyers across channels. Failure to adapt to rapidly changing travel needs has resulted in declining business for many buyers. Due to the industrys evolving and fragmented nature, travel buyers often lack efficiency, leading to average or below-average travel experiences for consumers.

B2B platforms serve as centralized hubs, streamlining processes for both travel buyers and suppliers. For suppliers, these platforms offer significant value additions. Firstly, they provide extensive supply and demand reach, connecting travel agencies with global resources like airlines and hotels and simplifying inventory management. Secondly, they enhance efficiency by reducing operational costs through streamlined booking and payment processes. Thirdly, B2B platforms offer valuable insights into customer needs, aiding in product development and service enhancement. Lastly, they provide integrated marketing tools, enabling suppliers to showcase their offerings effectively. Examples include TMCs and global distribution systems. As the travel industry evolves,

Company overview

As a leading travel distribution platform in the global travel and tourism sector established in 2006, TBO caters to Buyers in over 100 countries by offering a comprehensive travel inventory tailored to their customers needs, complete with currency options and forex assistance. The companys platform streamlines the travel business for Suppliers, including hotels, airlines, car rentals, transfers, cruises, insurance, and rail services, as well as for Retail Buyers such as travel agencies and independent advisors, and Enterprise Buyers like tour operators and online travel companies. Through its two-sided technology platform, Suppliers and Buyers seamlessly transact, enabling Suppliers to showcase their inventory to the global Buyer base while empowering Buyers with an integrated, multi-currency, and multi-lingual solution for discovering and booking travel across leisure, corporate, and religious segments worldwide.

Our key strengths

Strong Network Effect: A strong network effect is a key strength for the company as it creates a virtuous cycle. As more travel agents and individual travelers use our platform, it attracts a wider range of hotels, airlines, and other travel suppliers. This increased selection compels even more users, thus creating a valuable ecosystem for all. This network effect positions us to become a one-stop shop for travelers, fostering user loyalty and driving growth for TBO in the competitive Indian travel market.

Scalable Technology Platform: the platforms modular design allows it to easily add new features, services, and travel products. This agility is crucial in the dynamic travel industry. As new trends emerge, like adventure tourism or customized experiences, companies can quickly adapt the platform to cater to them. This adaptability keeps it ahead of the curve, attracting new customers and ensuring it remains a leader in the Indian travel distribution landscape.

Data-Driven Insights: The vast amount of user data the company collects on travel preferences, booking habits, and spending patterns allows it to personalize offerings and target marketing with laser focus. This translates to more relevant recommendations for travelers, increased conversion rates, and ultimately, a competitive edge. By leveraging data effectively, company can optimize its platform and cater to the ever-evolving needs of the Indian travel market.

Capital-Efficient Model: The companys capital-efficient model is a key strength compared to traditional travel agencies. Unlike competitors burdened by high overhead costs like physical offices, the Companys focus on online services keeps expenses lower. This translates to a leaner operation and potentially more profits to reinvest in growth initiatives like marketing campaigns or expanding its travel product portfolio. This financial flexibility positions it to weather market fluctuations and out-maneuver competitors with heavier operational costs.

Growing Customer Base: The surge in users, both travel agents and individual travelers, signifies customer confidence in the companys platform. As a result, more users attract more travel suppliers, offering a wider selection that compels even more customers to the company. This loyalty fosters a thriving ecosystem on its platform, solidifying its position in the competitive Indian travel market and propelling further growth.

TBO stands well-positioned to capitalize on the evolving landscape of the travel and tourism industry, both at global and India level. With a robust network effect, a scalable and adaptable technology platform, and the ability to leverage data-driven insights, company is equipped to meet the dynamic needs of both suppliers and buyers. With strategic infrastructure investments, technological advancements, and government initiatives propelling industry growth, TBO stands ready to leverage these trends, fostering continued growth and reinforcing our position as one of the leading companies in the travel distribution sector.

Consolidated Financial performance overview

Profit and Loss Statement

Income

Total income increased from INR 10,857.71 million in FY 2023 to INR 14,154.76 million in FY 2024 primarily due to an increase in revenue from contracts with customers from India as well as international operations which is in line with an increase in transaction volumes on the Companys platform.

Particulars	Fiscal		Variance % YoY
Income	2023	2024
	(INR in million)
Revenue from operations
Revenue from Contracts with Customers	9,827.67	12,809.09	30.34%
Other operating revenue	818.20	1,119.10	36.78%
Revenue from operations	10,645.87	13,928.19	30.83%
Other income	130.33	246.73	89.31%
Other gains/(losses) – net	81.51	(20.16)	-124.73%
Total Income	10,857.71	14,154.76	30.37%

Revenue from Operations

Revenue from operations increased by 30.83% from INR 10,645.87 million in Fiscal 2023 to INR 13,928.19 million in Fiscal 2024, primarily due to a significant increase in the customers utilizing the Companys platforms for air tickets and hotel and packages and also due to the easing of COVID-19 related travel restrictions. Resultantly, the take rate (revenue from operations divided by GTV) has improved from 4.77% in Fiscal 2023 to 5.25% in Fiscal 2024.

Revenue from Contracts with Customers

Revenue from contracts with customers increased by 30.34% from INR 9,827.67 million in Fiscal 2023 to INR 12,809.09 million in Fiscal 2024. There was a significant increase in revenue from operations – revenue from contracts with customers for hotels and packages as well as air ticketing since there was an increase in bookings on the Companys platform due to the easing of COVID-19-related travel restrictions. Revenue from Hotel & Packages as a percentage of total revenue from operations has increased from 64.27% in Fiscal 2023 to 68.13% in Fiscal 2024. 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:

	Fiscal 2023		Fiscal 2024
Types of service	Amount	Percentage of Revenue from Operations	Amount	Percentage of Revenue from Operations
	(INR in million)	(%)	(INR in million)	(%)
Air Ticketing	2,765.96	25.98	2,994.39	21.50
Hotel and Packages	6,842.43	64.27	9,489.23	68.13
Technical Service	37.85	0.36	37.31	0.27
Other Services	181.43	1.70	288.16	2.07
Total revenue from contracts with customers	9,827.67	92.31	12,809.09	91.97

Other Operating Revenue

Other operating revenue increased by 36.78% from INR 818.20 million in Fiscal 2023 to INR 1,119.10 million in Fiscal 2024 primarily due to an increase in the customers utilising the Companys platforms for air tickets and hotel and packages and also on account of the recovery in global travel. The following table sets forth its other operating revenue presented in accordance with the types of services it offers for the periods indicated:

	Fiscal 2023		Fiscal 2024
Types of service	Amount (INR in million)	Percentage of Revenue from Operations (%)	Amount (INR in million)	Percentage of Revenue from Operations (%)
Air Ticketing	439.07	4.12	471.97	3.39
Hotel and Packages	379.13	3.56	647.13	4.65
Total other operating revenue	818.20	7.69	1,119.10	8.03

Other Income

Other income increased from INR 130.33 million in Fiscal 2023 to INR 246.73 million in Fiscal 2024, primarily due to an increase in liabilities no longer required written back from INR 52.98 million in Fiscal 2023 to INR 121.94 million in Fiscal 2024 and Interest income from financial assets from INR 67.92 million in Fiscal 2023 to INR 115.62 million in Fiscal 2024.

Other gains/(losses) - net

Other gains/(losses) – net decreased majorly from INR 81.51 million in Fiscal 2023 to INR (20.16) million in Fiscal 2024, primarily due to a decrease in net foreign exchange difference to INR (56.20) million in Fiscal 2024 from INR 47.60 million in Fiscal 2023 on account of losses on account of foreign exchange fluctuations. The decrease was partially offset by an increase in net gain on sale of investments which includes income from investments in overnight/liquid funds from INR nil in Fiscal 2023 to INR 35.55 million in Fiscal 2024.

Also, there was a net gain on conversion of the joint venture into a step down subsidiary of INR 32.71 million in Fiscal 2023 on account of the acquisition of an additional 20% of the outstanding equity share capital of United Experts for Information Systems Technology Co. (LLC) ("United Experts") taking the Companys effective holding to 70%, which has contributed to the variance in Other gains/(losses) – net.

Expenses

Total expenses increased by 29.19% from INR 9,144.17 million in Fiscal 2023 to INR 11,813.68 million in Fiscal 2024, primarily due to an increase in service fees, employee benefits expenses and other expenses. The increase in total expenses was consistent with the increase in the Companys revenue from operations.

	Fiscal
Particulars	2023	2024	Variance % YoY
	(INR in million)
Service fees	3,319.49	4,707.29	41.81
Employee benefit expense	2,283.98	2,773.43	21.43
Finance costs	71.67	106.49	48.58
Depreciation and amortisation expenses	245.57	361.63	47.26
Net impairment losses on financial assets	93.37	97.44	4.36
Share Issue Expenses	120.45	20.31	-83.14
Other Expenses	3,009.64	3,747.09	24.50
Total expenses	9,144.17	11,813.68	29.19

Service Fees

Service fee expenses increased by 41.81% from INR 3,319.49 million in Fiscal 2023 to INR 4,707.29 million in Fiscal 2024, 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 25.9% from INR 7,326.38 million for Fiscal 2023 to INR 9,220.90 million for Fiscal 2024.

Employee Benefits Expense

Employee benefits expense increased by 21.43% from INR 2,283.98 million in Fiscal 2023 to INR 2,773.43 million in Fiscal 2024, primarily due to an increase in salaries, bonuses, allowances and benefits from INR 2,081.56 million in Fiscal 2023 to INR 2,689.34 million in Fiscal 2024 on account of an increase in number of on-roll employees and compensation increments given to employees, an increase in contribution to provident and other funds from INR 75.16 million in Fiscal 2023 to INR 93.43 million in Fiscal 2024; an increase in employee stock option expense from INR 50.22 million in Fiscal 2023 to INR 92.37 million in Fiscal 2024 on account of an increase in options granted in Fiscal 2024 under the TBO Employee Stock Option Scheme 2021; and increase in gratuity expense from INR 34.31 million in Fiscal 2023 to INR 43.31 million in Fiscal 2024.

This also includes Staff welfare expenses which have increased from INR 42.73 million in Fiscal 2023 to INR 130.16 million in Fiscal 2024 due to an increase in the number of on-roll employees and various staff welfare initiatives including medical Insurance, etc. Also, employee benefit expense is reduced by INR 275.18 million on account of expense capitalised during Fiscal 2024 as part of other intangible assets/intangible assets under development on account of various ongoing tech projects.

Finance Costs

Finance costs increased from INR 71.67 million in Fiscal 2023 to INR 106.49 million in Fiscal 2024 primarily due to an increase in interest expense - lease liabilities from INR 60.26 million in Fiscal 2023 to INR 69.45 million in Fiscal 2024, interest on borrowings from INR 1.30 million in Fiscal 2023 to INR 11.62 million in Fiscal 2024 and increase in interest recognised on deferred consideration in relation to business combination from INR 1.16 million in Fiscal 2023 to INR 12.29 million in Fiscal 2024.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses increased by 47.26% from INR 245.57 million in Fiscal 2023 to INR

361.63 million in Fiscal 2024, on account of increase in depreciation on property, plant and equipment from INR 35.54 million in Fiscal 2023 to INR 50.85 million in Fiscal 2024, amortisation of intangible assets from INR 123.42 million in Fiscal 2023 to INR 202.44 million in Fiscal 2024 and increase in depreciation in right-of-use assets from INR 86.61 million in Fiscal 2023 to INR 108.34 million in Fiscal 2024 due to additional office space taken on lease during the year.

Other Expenses

Other expenses increased by 24.50% from INR 3,009.64 million in Fiscal 2023 to INR 3,747.09 million in Fiscal 2024, primarily on account of the following: f Hosting and bandwidth charges increased from INR 268.93 million in Fiscal 2023 to INR 399.78 million in Fiscal 2024, primarily due to an increase in Transacting Buyers on the Companys platform; f Payment gateway charges increased from INR 860.99 million in Fiscal 2023 to INR 1,029.82 million in Fiscal 2024 which was consistent with the increase in the Companys business and an increase in revenue from contracts with customers from air ticketing as well as hotel and packages; f Legal and professional expenses increased from INR 217.24 million in Fiscal 2023 to INR 268.99 million in Fiscal 2024 on account of increase in fees paid to legal consultants and other professional services availed; f Software license fee increased significantly from INR 27.61 million in Fiscal 2023 to INR 92.30 million in Fiscal 2024, on account of the license fee paid for various additional software procured for the Companys operations; f Business support services significantly increased from INR 657.25 million in Fiscal 2023 to INR 908.89 million in Fiscal 2024, primarily on account of an increase in off-role consultants during the year.

Exceptional items

Exceptional items include INR 71.96 million in Fiscal 2024, which includes INR 81.02 million on account of advances related to one of the airline suppliers written off during the year; net of INR 9.06 million recovered from earlier written-off receivables. Exceptional items amounting to INR (28.90) million in Fiscal 2023 were on account of recovery of the written-off receivables.

Profit / Loss for the Year

With all the reasons discussed above, the company has recorded a profit of INR 2,005.73 million in Fiscal 2024 compared to INR 1,484.91 million in Fiscal 2023.

Particulars	Fiscal 2023	Fiscal 2024
Profit/(loss) for the year (A)	1,484.91	2,005.73
Tax Expense (B)	257.04	263.39
Profit/(loss) before tax (C=A+B)	1,741.95	2,269.12
Add: Finance costs (D)	71.67	106.49
Add: Depreciation and amortisation expenses (E)	245.57	361.63
Less: Other income (F)	(130.33)	(246.73)
Less: Other gains/(losses) - net (G)	(81.51)	20.16
Add: Exceptional items/ (H)	(28.90)	71.96
Earnings before interest, taxes, depreciation and amortization expenses (EBITDA) (I= C+D+E-F-G+H)	1,818.45	2,582.63
Add: Share issue expenses (J)	120.45	20.31
Add: Employee Stock Option Expense (K)	50.22	92.37
Add: Share of loss of joint ventures (L)	0.49	-
Adjusted Earnings before interest, taxes, depreciation and amortization expenses (Adjusted EBITDA) (K= I+J+K+L)	1,989.61	2,695.31
Revenue from operations (L)	10,645.87	13,928.19
Adjusted EBITDA Margin (Adjusted EBITDA as a percentage of Revenue from operations) (M = K/L)	18.69%	19.35%

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

EBITDA was INR 2,582.63 million in Fiscal 2024 compared to INR 1,818.94 million in Fiscal 2023, while EBITDA Margin (EBITDA as a percentage of Revenue from Operations) has increased to 18.54% in Fiscal 2024 compared to 17.09% in Fiscal 2023.

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

Adjusted EBITDA is calculated as profit for the year/period plus finance cost, depreciation and amortization expenses, exceptional items, share issue expenses, employee stock option expense and share of loss of joint ventures less other income and other gains / (losses) - net while Adjusted EBITDA Margin is the percentage of Adjusted EBITDA as a percentage of revenue from operations. Adjusted EBITDA was INR 2,695.31 million in Fiscal 2024 compared to INR 1,989.61 million in Fiscal 2023, while Adjusted EBITDA Margin (Adjusted EBITDA as a percentage of Revenue from Operations) was 19.35% in Fiscal 2024 compared to 18.69% in Fiscal 2023.

BALANCE SHEET

Capital Expenditure

The capital expenditure towards additions to fixed assets (property, plant and equipment, goodwill & intangible assets (including under development)) was INR 2,959.84 million as of March 31, 2024, against INR 746.81 million as of March 31, 2023. The following table sets forth fixed assets as of the periods indicated:

(INR million)

Particulars	As of March 31, 2023	As of March 31, 2024
Property, plant and equipment	96.29	129.79
Goodwill	361.16	886.49
Other Intangible Assets	289.36	1,804.82
Intangible assets under development	-	138.74
Total	746.81	2,959.84

In addition, the significant increase in Goodwill and other intangible assets for Fiscal 2024 compared to Fiscal 2023 is on account of the acquisition of 100% equity share capital of Jumbonline during the year and additional investments in various internally developed IT projects. The above-mentioned increase were offset by depreciation charged for the period.

Intangible assets under development mainly comprise costs in relation to the further development of the travel integration website.

Investments

As of March 31, 2024, the Companys investments (Non-current & current) stood at INR 20.34 million against INR 2.37 million as of March 31, 2023. During Fiscal 2024, INR 20.00 million has been invested into Hotelzify Private Limited as Non-Current investment and current investment amounting to INR 2.04 million in NHPC Limited as of March 31, 2023, has been realised during the year.

Trade Receivables

Trade Receivables have increased significantly from INR 15,661.57 million as of March 31, 2023, to INR 33,066.99 million as of March 31, 2024. While this increase primarily relates to the newly acquired Jumbonlines contribution to the receivables, the remaining increase is driven by the increased GTV in the existing businesses.

Cash, cash equivalents and bank balances

Cash, cash equivalents and bank balances have increased from INR 6,612.87 million as of March 31, 2023, to INR 8,540.83 million as of March 31, 2024. The increase is mainly due to accumulated profits.

Other financial assets (Current & Non-Current)

Other financial assets (Current & Non-Current) have increased from INR 640.75 million as of March 31, 2023, to INR 755.32 million as of March 31, 2024, majorly due to an increase in receivables from service providers providing collection services to the overseas subsidiary company.

Other assets (Current & Non-Current)

Other assets (Current & Non-Current) have increased from INR 1,163.37 million as of March 31, 2023, to INR 2,404.38 million as of March 31, 2024, majorly due to an increase in advance to suppliers in the newly acquired entity Jumbonline.

Borrowings (Current & Non-Current)

Borrowings (Current & Non-Current) have increased significantly from INR 63.60 million as of March 31, 2023, to INR 1,350.83 million as of March 31, 2024, due to a term loan taken by a subsidiary company during the year.

Other financial liabilities (Current & Non-Current)

Other financial liabilities (Current & Non-Current) have increased significantly from INR 813.01 million as of March 31, 2023, to INR 1,601.93 million as of March 31, 2024, majorly due to amounts payable (including contingent consideration) towards business acquisition done during the current year.

Employee benefit obligations (Current & Non-Current)

Employee benefit obligations (Current & Non-Current) have increased from INR 202.91 million as of March 31, 2023, to INR 257.89 million as of March 31, 2024. These include provisions for Gratuity and Leave Encashment and the increase is due to an increase in on-roll employees and increments during the year.

Trade payables

Trade payables have increased significantly from INR 18,029.62 million as of March 31, 2023, to INR 36,033.17 million as of March 31, 2024. While this increase primarily relates to the newly acquired Jumbonlines contribution to the payables, the remaining increase is driven by the increased activity in the existing businesses.

Contract Liabilities

Contract Liabilities have increased from INR 2,017.22 million as of March 31, 2023, to INR 2,523.82 million as of March 31, 2024. This majorly includes advances received from customers (travel buyers) for the issue of tickets and hotel packages.

Other liabilities (Current & Non-Current)

Other liabilities (Current & Non-Current) have increased from INR 361.93 million as of March 31, 2023, to INR 489.36 million as of March 31, 2024. This includes Statutory dues payable and outstanding refund liability as on the closing date.

Shareholders Funds

Share Capital

As of 31 March 2024, the Companys share capital stood at INR 104.24 million [104,239,961 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 of 31 March 2024 was INR 5,343.83 million compared to INR 3,298.62 million as of 31 March 2023.

Key financial ratios

Please refer Note 44 of Standalone financials for details of significant changes (i.e. change of 25% or more as comparedtotheimmediatelypreviousfinancialyear)inkey financial ratios, along with detailed explanations thereof.

Opportunities and threats

Opportunities

Capitalize on Rising Domestic Tourism: Leveraging its platform, the Company has the opportunity to meet the demands of the thriving domestic travel market in India. Through the provision of curated experiences, niche packages, and extensive regional coverage, it can establish itself as the preferred option for domestic travellers seeking distinctive adventures beyond conventional bookings.

Mobile Expansion: With the increasing penetration of mobile internet in India, the Company can enhance their mobile app to ensure a smooth user experience. This involves incorporating local payment options, delivering real-time travel updates, and introducing voice search features to meet the needs of the expanding mobile-first traveller segment.

Focus on Niche Markets: The Company can utilize their data to recognize and address niche markets, aligning with the changing preferences of travellers in India. This strategy entails developing tailored packages for adventure travel, wellness retreats, or experiences tailored to distinct demographics such as millennials or families.

Strategic Acquisitions: The recent IPO of the Company has furnished it with funds for strategic acquisitions, enabling investment in companies that enhance its services, such as activity providers or local tourism players. This endeavour would expand its portfolio of travel products and enrich the overall travel booking experience. Technological Innovation: In a perpetually changing travel industry landscape, the Company has the opportunity to invest in cutting-edge technologies such as virtual reality and artificial intelligence to elevate its platform. Virtual reality experiences could enable users to virtually tour destinations before booking, while AI-driven chatbots can tailor recommendations and simplify the booking procedure, appealing to technologically adept Indian travellers.

Threats

Competition: The Indian travel distribution market is fiercely competitive, with established players and emerging startups vying for market share. The Company will need to constantly innovate and differentiate its offerings to stay ahead.

Dependence on Suppliers: The Company relies heavily on partnerships with travel suppliers like hotels and airlines for its inventory. Any changes in commission structures or pricing by these suppliers could negatively impact its profitability.

Economic Slowdown: An economic slowdown in India could lead to decreased consumer spending on travel, impacting the Companys booking volumes, thereby impacting the net revenue.

Technological Disruption: The travel industry is constantly evolving, and new technologies could emerge that disrupt the current online travel distribution model. The Company needs to be adaptable and invest in staying at the forefront of technological advancements.

Data Security Concerns: As the Company handles a large amount of customer data, data breaches or security vulnerabilities could damage its reputation and lead to customer churn.

Risks and mitigation strategies

Risk	Description	Mitigation
Economic risk	The Companys operations are intricately linked with the broader macro environment, which influences consumer behaviour and purchasing power. The tourism industry has been impacted by factors such as escalating inflation and political instability.	The Company possesses a robust client base, and its growth is propelled by a customer- centric approach and efficient service delivery, unaffected by economic instability.
Credit risk	Given the Companys engagement with various corporate entities and channel partners, it faces significant credit risks. Any instance of payment default or delay could potentially have adverse effects on the Companys financial performance.	The Companys well-structured, equitable, and thorough client policy governs all contracts and business transactions. Additionally, the finance team evaluates the financial capabilities of major clients and channel partners.
Forex risk	With its presence spanning diverse geographical regions, the Company conducts transactions in multiple currencies, exposing it to the risk of adverse currency fluctuations that could result in financial losses.	The Company implements a rigorous hedging policy to mitigate its foreign exchange risks. It diligently monitors currency fluctuations and engages in hedging contracts to safeguard its margins.
Competition risk	As a premium brand operating in various categories across different regions, the Company faces fierce competition from local players, leading to pricing battles that could potentially impact its operating margins negatively.	The leadership presence of the Company in most markets provides it with competitive advantages, while the Companys pricing strategy is formulated to achieve healthy targeted margins.
Integration risk	The Companys investments in diversified businesses across different geographical regions necessitate seamless integration of personnel, assets, processes, and systems. Any shortcomings in the integration process could hinder the Companys growth prospects.	The Companys promoters and senior management have successful track records in overseeing acquisitions and integrations. Moreover, the company has reorganized its business divisions to enhance focus and agility in operational activities.

IPO

TBO Tek Limited marked a significant milestone in its corporate journey. The Companys shares were listed on the BSE and NSE Limited on May 15, 2024. The Companys IPO worth INR 1,550.81, was a combination of fresh issue of 0.43 crore shares aggregating to INR 400.00 crores and offer for sale of 1.25 crore shares aggregating to INR 1,150.81 crores.

A Quick Rundown on IPO f Bidding Dates - May 8, 2024 to May 10, 2024 f Allotment - May 13, 2024 f Listing Date – May 15, 2024 (BSE and NSE)

The IPO price band was set at INR 875 to INR 920 per share and the face value was INR 1. The minimum lot size for was application was 16 shares. The minimum amount of investment required by retail investors was INR 14,720. The minimum lot size for investment for small NII (sNII) was 14 lots (224 shares), amounting to INR 206,080, and for big NII (bNII), it was 68 lots (1,088 shares), amounting to INR 1,000,960.

Human resources

Our people are our best assets. Their caliber and commitment is our inherent strength. With the singular objective of always being the preferred employer in the talent landscape, we are encouraging our people to discover and realize their true potential. Acquiring diverse experiences, accomplishing challenging tasks and continually learning and upskilling is enabling them to deliver their best. By identifying, developing and nurturing quality talent at every stage of the employee lifecycle, we are empowering them to become future ready and build rewarding careers. At TBO Tek, we strongly believe that diversity gives an organisation a competitive edge, encourages innovation and vibrancy of thought and action. A diverse workplace strengthens understanding of and responsiveness to the ever-changing needs of a varied customer base. The Company has implemented several initiatives to attract and develop a diverse and inclusive workforce, with a focus on maintaining a healthy gender diversity blend and to continue its successful evolution as an organisation. We have launched a specially curated mentorship program for our women employees – EmpowHer. Through this program, we provide a supportive network of mentors offering guidance, encouragement, and practical advice to help women navigate their careers with confidence.

Future ready trails of agility, digital mindset and customer centricity are being consciously imbibed, both in thought and action, at every level across the organization. Richer collaborations and stronger teamwork have accelerated our pursuit of excellence and growth.

Building an effective organisational culture

Culture is a key enabler to optimise potential, retain and also attract top talent to fuel performance within the organisation. The collective desire to become more agile and future ready necessitated a refresh of the organisational culture. Or core values lay a strong foundation in building an effective and inspiring organisational culture that lays strong emphasis on Entrepreneurial spirit, Collaboration, Accountability and Risk taking.

Engaging employees through quarterly newsletters, virtual sessions, workshops, and confluences, provides platforms for interaction with business leaders, talent showcasing, and family engagement. Additionally, the Company offers long-term incentives, stock options, and competitive compensation to retain its top talent.

Internal control systems and adequacy

The Company maintains robust internal control procedures tailored to its size and activities. It believes that safeguarding assets and enhancing operational efficiency is achievable through the implementation of adequate internal controls and the standardization of operational processes. These internal controls and risk management mechanisms adhere to the principles and criteria outlined in the corporate governance code of the organization. They are seamlessly integrated into the overall organizational structure of both the Company and the Group, involving various personnel who collaborate effectively in fulfilling their respective duties. The Board of Directors provides guidance and strategic oversight to the Executive Directors and management, overseeing monitoring and support committees.

Cautionary statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand-supply and price conditions in the domestic & overseas markets in which the Company operates, changes in the government regulations, tax laws & other statutes & other incidental factors.