The June quarter, traditionally a sound one, turned out to be challenging for the travel and tourism industry. Debasis Nandy, president and group chief financial officer at Thomas Cook India, speaks to Swaraj Baggonkar to provide important highlights of the quarter. Excerpts:
There has nearly been no growth in net profit at the consolidated level. What would you attribute this to?
There was a one-time expense of Rs 17.1 crore. This was on account of a provision made for ex-gratia for Madhavan Menon, group chairman and managing director who retired from the company. If I exclude this from profit and loss, the PBT goes up by 18%.
Will this require a shareholder nod?
Yes. It will be presented at the annual general meeting due in September. The board agreed to do this in May. We have not made the actual payment – it is only a provision at this stage.
How was the June quarter?
The quarter was not favourable for the industry. With geopolitical challenges like the Pahalgam attack, closure of airspace and Air India crash, the quarter turned out to be the most volatile one since Covid-19.
How did the forex business perform?
Forex saw a decline in the top line, primarily because of discontinuation of operations at the Delhi airport. We had 7-8 counters there, but operations were proving to be unprofitable as it (the airport) added new counters in violation of the basic terms of the contract. This resulted in a 7% fall in the top line.
How important has been the revenue from the Delhi airport?
In terms of top line, it contributed Rs 20-25 crore. This is below 10%. We hope to recover some ground. We have bagged a contract at the Bengaluru airport for which we are awaiting the final mandate.
Was there an increase in cancellations after the Air India crash?
Not too many. We saw a fall in corporate ticketing. We did not see any cancellation from the leisure segment. We saw cancellations after the Pahalgam attack, but there were people who sought rescheduling of travel dates.
The second quarter is seasonally a weak one. What guidance can you provide with regard to PAT and revenue?
Forward bookings have slowed down. People are not booking two months in advance like earlier. The gap between the booking date and actual travel date has substantially reduced, thanks to increased air connectivity and visa-free arrivals.
How did Sterling Hotels perform?
Its top line improved by 8% and the bottom line grew 25%. Occupancy remained at 60%, but the number of rooms grew by 300 between the two quarters. We have operationalised two new resorts. We now have 62 resorts, and have a plan to take it up to 80 in 12-18 months.