TBO Tek Navigates Macro Headwinds, Accelerates Growth with Strategic Acquisitions

TBO Tek Limited, a prominent global B2B travel distributor, has reported a robust performance for Q2 FY26, demonstrating significant resilience amidst prevailing macroeconomic headwinds and geopolitical challenges experienced in Q1. The company's earnings call and investor presentation paint a picture of strategic clarity and operational recovery, particularly in its core business segments. For the quarter ended September 30, 2025, TBO Tek announced a Gross Transaction Value (GTV) of ₹8,901 crore, marking a 12% year-on-year growth. Gross Profit surged by 19% to ₹363 crore, while Adjusted EBITDA, before accounting for M&A costs, reached ₹104 crore, reflecting a 16% increase compared to the same period last year. This strong showing indicates a broad-based recovery and effective execution of its growth strategies.

The recovery was notably driven by the hotels business, which experienced nearly 20% growth. Management highlighted a favorable shift in the business mix towards hotels and improved retention rates. Geographically, the company witnessed positive momentum across several key regions. India's business arrested its degrowth trend, returning to positive growth with GTV up 0.3% year-on-year. Europe, after Q1 disruptions, returned to normalcy, growing 20% year-on-year, led by markets such as Spain, France, Germany, Italy, and Israel. The Middle East and Africa (MEA) region delivered another strong quarter, with Hotels + Ancillary GTV growing 27% year-on-year, driven by GCC markets like UAE, Qatar, and Kuwait. The Americas also saw healthy growth, with Hotels + Ancillary GTV increasing by 10% year-on-year, primarily led by Argentina and Brazil.

Strategic Expansion and Acquisitions Fueling Growth

A pivotal development for TBO Tek is its aggressive inorganic growth strategy, exemplified by the recent acquisition of Classic Vacations. This transaction, which closed on October 1, 2025, marks a significant expansion into the North American luxury travel market. Classic Vacations, a premier B2B2C company focused on US travel advisors, brings a 47-year history, strong consortia relationships, and access to over 1,500 direct luxury hotels. While Classic Vacations historically showed limited growth, TBO Tek's management is confident in unlocking its potential by integrating its larger supply pools and leveraging its advanced technology infrastructure. The acquisition is expected to contribute meaningfully to TBO Tek's revenue from Q3 FY26 onwards.

Beyond acquisitions, TBO Tek's strategic vectors include expanding into new geographies, growing buyer segments, bolstering its supplier network, and diversifying product lines. The company's proprietary, modular, and scalable technology platform is central to these efforts, enabling seamless business operations for global travel buyers and suppliers. Investments in sales personnel across key growth markets have led to rapid growth in Monthly Active Agents and new agent additions, visibly translating into incremental business. The company is also deploying AI and high-tech innovation to enhance efficiency, optimize pricing, and improve conversion rates, contributing to operating leverage.

Operational Efficiency and Future Outlook

TBO Tek's business approach is designed for capital efficiency and strong cash generation. The company benefits from high buyer retention, increased wallet share, and global network effects, which, combined with technology automation, result in a near-zero marginal cost for serving new transactions. This strong operating leverage means that incremental benefits largely flow to the bottom line. Management expects EBITDA growth to outstrip Gross Profit growth for the core business in the coming quarters, with margins expanding due to a projected tapering down of SG&A growth year-on-year.

Despite the positive outlook, TBO Tek acknowledges certain challenges. The LatAm business continues to face structural headwinds, including an IOF tax and currency volatility, although operational adjustments have been made in Brazil to support growth under a revised tax framework. The air business segment has also seen shrinking take rates due to intense competition. However, the company's proactive approach to addressing these issues, coupled with its strategic investments and diversified growth drivers, positions it for sustained performance. TBO Tek's commitment to expanding its EBITDA margin on the core business, excluding Classic Vacations, for the next several quarters underscores its focus on profitable growth and shareholder returns.

Conclusion: A Resilient Path to Global Leadership

TBO Tek Limited's Q2 FY26 performance underscores its resilience and strategic acumen in navigating a dynamic global travel market. The company's ability to recover from earlier challenges, coupled with its aggressive expansion through acquisitions and technological innovation, highlights a clear path towards strengthening its position as a leading global B2B travel distributor. With a focus on operational efficiency, diversified growth, and a robust technology platform, TBO Tek is poised for continued success, aiming to simplify travel and create joyful experiences for its global network of buyers and suppliers.