Travel Food Services Ltd Q1 FY27 Earnings Analysis

- Revenue growth without new airport additions is expected around 18% to 20% like-for-like (LFL), combining passenger traffic growth (~9-10%) and price plus initiatives (~7-10%). (Page 19) - Historical passenger traffic growth averages 7% to 10% annually; price and premiumization plus initiatives contribute an additional 5-6% each to LFL growth. (Page 18) - India’s aviation sector is underpenetrated with only ~30% population flying vs. China’s ~100%, indicating significant room for volume growth. (Page 19) - The company has a robust pipeline with over 50 outlets planned and new contracts in upcoming airports (e.g., Bhogapuram, Noida). Capex expected around INR 50-60 crores annually to support growth. (Page 15, 18) - Despite short-term disruptions, long-term structural demand drivers such as rising disposable incomes, airport expansion, and government initiatives support sustainable growth. (Pages 4, 6) - International expansion through new lounge opportunities in Malaysia and Hong Kong is underway. (Page 6)

- Revenue growth (like-for-like) expected around 18%-20% in the medium term based on traffic recovery and initiatives (Page 19). - Passenger traffic growth anticipated to normalize to 7%-10% historically, with additional 5%-6% growth from pricing and premiumization initiatives (Page 15). - FY26 saw a PAT growth of 21.4% YoY; momentum expected to continue with operational efficiencies and scale (Page 6). - Outlook remains confident in long-term Indian aviation growth, supporting strong revenue and profit expansion (Page 6, 19). - EBITDA growth propelled by margin expansion, operating leverage, and cost discipline; Q4 FY26 margin robust at ~85.6%-87.3% gross margin range (Pages 6, 7). - Capital allocation focus on growth pipeline with limited capex (~INR60 crores), enabling strong free cash flow and dividend sustenance (Page 15). - Technology initiatives like EATS platform to provide additional revenue and margin expansion levers (Pages 12, 19).

- Travel Food Services Limited expects capex of around INR 50 to 60 crores annually, including FY27. - The investment primarily focuses on mobilizing new outlets at airports, with over 50 outlets currently in the pipeline. - New airport contracts like Bhogapuram (7 outlets planned) and Noida are part of future expansion. - The company maintains a disciplined capital allocation approach with strong cash reserves (~INR 8 billion) and is completely debt-free. - Strategic investments include expansion in international lounges (e.g., Malaysia, Hong Kong) and exploring wayside amenities at access-controlled expressways, backed by government initiatives. - The company is actively bidding for new airports and remains open to opportunities in the airport retail space, including duty-free, though the primary focus remains on F&B.

- The company currently remains completely debt-free, as highlighted by Varun Kapur on Page 16. - They have a strong cash and investment position of approximately INR 8.4 billion as of March 31, 2026 (Page 8). - Capital expenditure requirements are expected to be moderate (around INR 60 crores mentioned on Page 16). - The company follows a disciplined approach to capital allocation, focusing on prudent and aggressive investments funded from existing cash reserves (Page 16). - There is no explicit mention of any immediate or planned fundraising through debt or equity in the provided transcript. - Focus remains on organic growth and strategic investments in airport F&B, lounges, international expansion, and technology platforms like EATS using internal accruals and cash reserves.

- Travel Food Services Limited currently has a robust pipeline with **more than 50 outlets in the pipeline** for future bidding and mobilization. - The company is actively bidding for new airport contracts, focusing on larger airports. - Two new airports are expected to be operational in the coming months, including Bhogapuram (a new Greenfield airport in Vizag) and Noida. - The pipeline includes outlets across existing and new contracts, indicating consistent expansion. - Capex for opening these outlets is estimated around **INR 50-60 crores annually**, expected to continue in FY27 as well.