Up 75% in 3 months, this stock debutant can rally further. Here's why

Recent debutant TBO Tek Ltd has surged more than 75 per cent from its IPO price, in just three months of its debut. However, a couple of brokerage firms see more upside in the stock following the results of the recent debutant for the April-June 2024 period.
 

Shares of TBO Tek rose nearly 3 per cent to Rs 1,615.55 on Friday, with its total market capitalization jumping to the 17,000 crore mark for the day. However, the stock had settled at Rs 1572.95 on Wednesday. It had issued shares for Rs 920 apiece during the IPO and the stock is still 75 per cent up from the IPO price.
 

TBO Tek’s consolidated net profit rose 29 per cent on a year-on-year (YoY) basis to Rs 60.91 crore, which stood at Rs 47.3 crore in the year ago period. The B2B travel portal's operating revenue increased 21 per cent YoY to Rs 418.5 crore during the quarter under review.
 

TBO Tek's gross transaction value (GTV) soared to Rs 7,940 crore, reflecting a 14 per cent YoY growth. It indicates that more people are using their services, or they have tapped into new markets. Adjusted Ebitda climbed to 23 per cent YoY to Rs 85 crore.
 

While hotels & packaging (H&P) segment grew a robust 39.6 per cent YoY led by strong expansion in International source markets and consolidation of JumboOnline (acquired in December 2023), the Air ticketing segment declined 7.6 per cent YoY on account of management decision to let go some high-volume, low-margin domestic air travel opportunity in India, said JM Financial.
 

"On the margins front, the company once again reported solid gross margin expansion of around 200bps YoY due to business mix moving towards H&P segment. Despite this expansion, Ebitda margin was still down 60 bps YoY due to negative operating leverage," it said.
 

"Going ahead, JM Financial expects air ticketing segment to be a drag on topline growth, robust expansion in the H&P segment should ensure that the company delivers over 20 per cent topline and over 30 per cent bottom-line growth over the medium term" it added with a 'buy' rating and a target price of Rs 1,950.
 

Established in 2006, TBO Tek, formerly known as Tek Travels, is a travel distribution platform that offers travel inventory according to the needs of its customers and supports a wide range of currencies along with forex help. It simplifies the travel business for suppliers such as hotels, airlines, car rentals, transfers, cruises, insurance, rail companies, and others.
 

The company had raised a total of Rs 1,550.81 crore via its IPO, open between May 8-10, which included a fresh shares sale of Rs 400 crore and offer-for-sale of up to 1,25,08,797 equity shares. The stock was listed at Rs 1,426 per cent, a premium of 55 per cent over the issue price. It scaled at Rs 1,938.75 as highs on June 28, 2025.
 

TBO’s 1QFY25 GTV grew 14 per cent YoY to Rs 7,900 crore and was in line with estimates, while growth decelerated versus 22 per cent YoY growth in March 2024 due to softness in TBO’s India domestic air segment, which declined YoY, said Goldman Sachs. "We forecast 2QFY25 GTV growth to accelerate to 20 per cent YoY, driven by favourable seasonality in the international business."
 

On the back of 1QFY25 results, FY25 revenue is 3 per cent lower, and outer year revenues up to 1 per cent lower, largely on lower take rates for hotels and lower air segment GTV, Goldman Sachs said. "Our gross profit estimates are largely unchanged, but adjusted EBITDA is 3%-6% lower as we bake in higher investments in personnel expenses and lower topline growth," it added with a buy rating with a target price of Rs 1,950.

 

 

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