Now Reading: TFS posts 35.6% profit jump, shares fall 1.8% on muted sales growth
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TFS posts 35.6% profit jump, shares fall 1.8% on muted sales growth
TFS posts 35.6% profit jump, shares fall 1.8% on muted sales growth
Travel Food Services (TFS) reported a 35.6% rise in consolidated profit after tax to Rs 128.8 crore for the first quarter of FY27, with system-wide sales growing 18% to Rs 843.7 crore.…
The Story in Brief
Travel Food Services (TFS) reported a 35.6% rise in consolidated profit after tax to Rs 128.8 crore for the first quarter of FY27, with system-wide sales growing 18% to Rs 843.7 crore. The stock fell 1.81% to Rs 1,369 on the NSE on Friday as like-for-like sales growth was a muted 0.8% due to passenger traffic disruptions from the West Asia conflict and terminal migration at airports including Mumbai and Guwahati.
EBITDA margins contracted 308 basis points to 35.8% because of higher costs from new outlets. TFS expanded to 580 outlets across 21 airports, adding 87 QSR outlets and 2 lounges in the past year. The company has no debt and a cash balance of Rs 969.8 crore. Earnings per share rose 38.1% to Rs 9.60.
The Indian Opinion
The market's sell-off despite a 35% profit beat shows that investors are pricing in the West Asia disruption and airport migration headwinds that capped like-for-like growth at 0.8%. The optimistic narrative around TFS's rapid outlet expansion needs to be weighed against the 308-basis-point EBITDA margin contraction from those very new outlets. The real test will come when passenger traffic normalises: can the 87 new QSR outlets added in the last year deliver the 7% LFL growth the company claims they can?
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
