Last year 3.6 m travellers from India went abroad on work and leisure. Outbound travel is growing at 25% per annum and is expected to clock in a figure of 5 m in the current year. Thomas Cook India Ltd (TCIL) a leading player of forex and outbound travel, will be a beneficiary of this growth.
This growth in outbound travel can be attributed to higher business and corporate travel as well as the availability of cheap and attractive destinations in Southeast Asia for leisure tourists. Besides RBI's move of increasing the Basic Travel Quota (BTQ) for corporate travellers and for holiday goers recently to has added to this growth.
Year ended 31st December
TCIL continues to be a leading player in the forex travel market with a network of 51 branches in 15 cities. The company has become very aggressive on the leisure travel front and its revenues from this business are on the rise. As a result the company's revenues from leisure travel business has gone up from 6 percent of turnover in 1996 to 11 percent in 1999.
As TCIL has not been very strong in inbound travel and keeping with its strategy of becoming a "one stop travel shop", the company has decided to takeover Travel Corporation of India. Travel Corporation is India's leading player of inbound tourism. After this takeover, TCIL will have access to 27 offices of Travel Corporation. The benefits of this acquisition for TCIL is that by this the company will become very strong in the area of inbound travel, which is currently the forte of Travel Corporation of India. This move will also spruce up the company's bottomline.
On the current price of Rs 376, TCIL is trading at 30.3 x FY2000 EPS of Rs 12.4.
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