• JULY 20, 2000

Thomas Cook net down 9% YoY

Thomas Cook (India) Ltd, a leading forex and tourism company has reported a 14% YoY growth in sales to Rs 204 m for 2QFY01. However the company's operating margins dropped by over 4% to 32.4% in 2QFY01, due to a 22% increase in operating expenditure. The main increase to operating expenditure was driven by a 49% increase in staff costs.

(Rs m) 2QFY00 2QFY01 Change
Sales 179 204 14.0%
Other Income 2 4 115.8%
Expenditure 113 138 21.7%
Operating Profit (EBDIT) 66 66 0.8%
Operating Profit Margin (%) 36.7% 32.4%  
Interest 8 7 -12.0%
Depreciation 13 13 7.2%
Profit before Tax 47 49 6.1%
Other Adjustments 0 4  
Tax 15 16 10.3%
Profit after Tax/(Loss) 32 29 -9.2%
Net profit margin (%) 18.0% 12.2%  
No. of Shares (eoy) (m) 8.8 8.8  
Diluted number of shares 14.6 14.6  
Diluted Earnings per share* 8.8 8.0  
*(annualised)     12.4

Due to lower interest costs in 2QFY01, TCIL's profit before tax went up by 6% YoY in this quarter. However due to amortisation of start up costs for its wholly owned subsidiary Thomas Cook (Mauritius) Holding Company Ltd of the amount of Rs 4.3 m in 2QFY01 the company's net profit declined by 9% YoY to Rs29 m for 2QFY01.

TCIL is in an advanced stage of negotiations to acquire the business of Travel Corporation (India) Ltd. 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 fits in well with TCIL's strategy of becoming the "one stop travel shop" as it is currently strong in the areas of foreign exchange and outbound travel.

This year seems positive for the company as the second half performance should improve as inbound tourist arrivals are buoyant (9% growth reported in the 1QFY01). Outbound travel is growing at a rate of 25%-30% per annum, this too will boost the company's earnings.

Thomas Cook India Ltd (TCIL) continues to be a leading player in the forex travel market with a network of 49 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.

On the current price of Rs 424, TCIL is trading at 34x FY2000 EPS of Rs 12.4.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407