JM Financial believes this internet-based travel company could be headed for steady growth as global travel habits change.
The stock in focus here is TBO Tek Tek the brokerage has kept a Buy rating on the stock and raised its target price to Rs 1,920. This indicates a potential upside of about 15%.
Let’s take a look at the key reasons behind why the brokerage is bullish on this stock and what is the rationale behind it –
JM Financial on TBO Tek: A bet on luxury travel and global partnerships
According to the brokerage report, TBO used the investor meet to highlight its growing presence in the global luxury travel segment. The management explained how long-standing relationships with premium airlines, hotels and travel advisors help the company offer a “high-service offering” that is different from what large online travel agencies or bed banks typically provide.
The leadership team, including the Chief Executive Officer of its subsidiary Classic Vacations, pointed out that such partnerships are especially important in established markets where trust and service quality play a major role in booking decisions.
According to the brokerage report, the management believes these systems help TBO stand apart from competitive platforms and better manage operations as volumes scale.
JM Financial on TBO Tek: Why luxury tourism demand matters
One of the main pillars of JM Financial’s positive view is the long-term demand outlook for luxury travel. According to the brokerage report, the management highlighted that nearly 80–90% of global wealth is controlled by just 10% of the world’s population. This affluent group, estimated at around 60 million millionaires and 600 million aspiring millionaires, is increasingly spending on experiences rather than products.
The pandemic has accelerated this shift, with travellers preferring “luxury experiences” such as customised holidays over traditional luxury goods. As per the brokerage report, the global luxury tourism market is expected to grow from about USD 250 billion in 2023 to nearly USD 400 billion, implying a compound annual growth rate of around 10%, almost double that of the broader travel market.
JM Financial also pointed out that luxury trips are becoming more complex, involving multiple destinations, longer stays and curated activities. In such cases, travellers rely less on “DIY” booking tools and more on expert guidance. According to the brokerage report, TBO’s model of working closely with travel advisors positions it to benefit from this trend. The management indicated confidence in delivering 20-25% growth in its organic hotels business over the medium term, excluding recent acquisitions.
JM Financial on TBO Tek: Sales investments and the margin
Another key factor supporting the Buy call is the company’s recent push into new markets. According to the brokerage report, TBO invested heavily in sales teams and market development in regions that currently contribute a small share of revenue but account for a large portion of global travel spending. This strategy has led to a sharp increase in the number of active agents added in the first seven months of the year, more than the entire previous year.
JM Financial noted that these new agents are already showing better productivity. The management said revenue growth is now converging with selling, general and administrative expenses, signalling early signs of “operating leverage”. According to the brokerage report, key account managers typically break even within 12 months, and the company expects revenue growth to soon outpace cost growth. This could support organic business earnings before interest, tax, depreciation and amortisation margins starting from the fourth quarter of financial year 2026.
JM Financial on TBO Tek: Valuation and target price logic
JM Financial has maintained its overall growth estimates while slightly adjusting margin assumptions for later years. As per the brokerage report, earnings per share estimates remain unchanged for financial years 2026-2027, with a small upward revision for financial year 2028. The target price has been rolled forward to December 2026 and is based on a valuation of 40 times next twelve months price-to-earnings, which the brokerage has kept unchanged.