Best Travel Stocks in September 2024 Based on Net Margin

India is one of the most popular travel destinations worldwide, which has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth in the services sector in India. The Indian travel and tourism industry is likely to witness an annual growth rate of 7.1%. By FY27, the Indian travel market is expected to reach US$ 125 billion from an estimated US$ 75 billion in FY20. In this blog, we will explore the best travel stock in September 2024 based on net margin

Best Travel Stocks in September 2024 – Based on Net Margin

Note: The stocks mentioned above have been selected from the travel and tourism sector with a market capitalisation of over ₹1,000 Crore and sorted based on net margin as of September 24, 2024

Overview of the Top 5 Travel Stocks

• Easy Trip Planners Ltd: Easy Trip Planners Ltd provides a range of travel-related products and services under the flagship brand ”Ease My Trip.” It also provides end-to-end travel solutions, including airline tickets, hotels and holiday packages, rail tickets, bus tickets, and taxis, as well as ancillary value-added services such as travel insurance, visa processing, and tickets for activities and attractions. EaseMyTrip has partnered with Adani Digital Labs to offer travellers access to duty-free shopping directly from its platform at seven major international airports in India, including Amritsar, Ahmedabad, Jaipur, Lucknow, Mangaluru, Mumbai, and Thiruvananthapuram. 

Key Metrics:

• Return on Equity (ROE): 31.9%
• Return on Capital Employed (ROCE): 43.4%
• TBO Tek Ltd: Established in 2006, the company operates an online B2B travel distribution platform that provides a wide range of offerings and connects Buyers and Suppliers. During Q1 FY25, the gross transaction value  (GTV) was up by 14%, while revenue grew by 21% compared to Q1 FY24. The company delivered a net profit of ₹61 Crore compared to ₹47 Crores for the same period last year. 

Key Metrics:

• ROE: 12.8%
• ROCE: 14.0%
• India Tourism Development Corporation Ltd: Established in 1966, India Tourism Development Corporation Ltd is a Govt. of India undertaking. It runs hotels and restaurants, providing transport facilities. The company is also engaged in the production, distribution and sale of tourist publicity literature and providing entertainment and duty free shopping facilities to tourists. In Q1 of FY 2024-25, the company reported a total turnover of ₹ 87.62 crore while profit before tax (PBT) hit ₹10.12 crores.

Key Metrics:

• ROE: 19.2%
• ROCE: 31.4%
• Ecos (India) Mobility & Hospitality Ltd: Incorporated in February 1996, ECOS (India) Mobility & Hospitality Limited is a chauffeur-driven car rental service provider in India. During FY 2024, it serviced the CCR and ETS requirements of more than 1,100 organisations in India. In Fiscal 2024, through CCR and ETS segments, it completed more than 3,100,000 trips, averaging more than 8,400 trips in a day.

Key Metrics:

• ROE: 38.7%
• ROCE: 42.9%
• Thomas Cook (India) Ltd: Thomas Cook offers a broad spectrum of services that include Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Visa & Passport services, and E-Business. The company set up its first office in India in 1881. The company’s travel segment revenue grew by 15% during Q1 FY25. This was led by Holidays, where the revenue growth was up 21%, and MICE at 30%. The 21% growth in Holidays actually came from short-haul, domestic, and long-haul

Key Metrics:

• ROE: 13.8%
• ROCE: 19.1%

Government Measures to Enhance the Travel Industry

The Indian government has taken a number of actions to establish India as a major international tourism destination. The Swadesh Darshan Scheme was initiated by the Ministry of Tourism with the aim of creating theme-based tourism circuits, authorising 76 projects. Updated to Swadesh Darshan 2.0 (SD2.0), it focuses on environmentally friendly travel, choosing 57 locations for development and having States and Unions draft plans in line with that. 

It is projected that 30.5 billion foreign visitors will arrive by 2028, bringing in approximately US$ 59 billion in income. Nonetheless, it is anticipated that domestic travellers will spearhead the expansion after the pandemic.

Conclusion

Investing in travel and tourism stock could provide a compelling opportunity as the sector is expected to witness substantial growth in upcoming years. However, the sector is also exposed to numerous, so it is required to do thorough research before investing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.