Travel Food Services Limited (TFS), India's leading travel food and retail company, demonstrated resilience in its Q2 FY26 performance, achieving system-wide sales of INR 7.30 billion with an 18.4% year-on-year growth. This growth came despite a 3.5% decline in passenger traffic at consolidated airports, primarily due to the India-Pakistan conflict and reduced flight schedules.

Financial Highlights

• Consolidated PAT reached INR 979.00 million, marking a 15.3% growth year-on-year
• System-wide sales grew by 18.4% year-on-year to INR 7.30 billion
• Like-for-like (LFL) sales growth of 9.2% system-wide, outperforming the passenger traffic trend
• Consolidated sales touched INR 3.50 billion with LFL growth of 3.8%

Operational Achievements

• Expanded to over 500 travel QSR outlets and lounges system-wide
• Added 50 new travel QSR outlets and four new lounges in the last 12 months
• Secured new contracts at Cochin International Airport and Delhi Terminal 2
• Launched India's first outlet of Gordon Ramsay Street Burger at Delhi Terminal 1

Strategic Initiatives

TFS implemented several strategic initiatives to drive growth and enhance customer experience:

1. Introduced a quick commerce menu at select outlets, promising food delivery within five minutes
2. Launched festival-specific menus and curated events in lounges to engage travelers
3. Developed a technology platform through Elite Assist Technology and Services for seamless lounge access integration with banks and card networks

Market Outlook

Despite short-term challenges, TFS management remains optimistic about the long-term growth prospects of the Indian aviation market. The company expects its performance to benefit from recovering passenger traffic trends in the seasonally stronger second half of the fiscal year.

Management Commentary

Varun Kapur, Managing Director and CEO of TFS, stated, "Against this challenging backdrop, TFS has performed well and delivered a strong quarter. We achieved this by taking immediate and decisive action, managing the cost base tightly and driving efficiencies."

Vikas Kapoor, Whole-time Director and CFO, added, "Our consolidated PAT increased to INR 979.00 million in Q2 FY'26 from INR 849.00 million in Q2 FY'25, registering strong 15.3% year-on-year growth on an adjusted basis. The profit growth is driven by sales growth, cost efficiency and uptick in JV profit."

TFS's ability to outperform passenger traffic trends and maintain strong growth in a challenging environment demonstrates the company's resilience and effective business strategies. As the aviation sector continues to recover, TFS is well-positioned to capitalize on the growing travel food and retail market in India.

Travel Food Services Limited (TFS), India's leading operator of Travel QSR outlets and Lounges, has reported strong financial results for the second quarter of fiscal year 2026. The company's performance demonstrates resilience and growth despite temporary challenges in the aviation sector.

Key Financial Highlights

• System-wide sales grew by 18.4% year-over-year to Rs. 7,284.00 million in Q2FY26
• Consolidated PAT increased by 15.3% year-over-year to Rs. 979.00 million in Q2FY26
• PAT margin expanded by 268 basis points to 27.5%
• H1FY26 system-wide sales growth of 22.4% year-over-year to Rs. 14,435.00 million
• H1FY26 consolidated PAT growth of 17.2% year-over-year to Rs. 1,929.00 million

Operational Performance

TFS achieved significant milestones in its operational expansion:

• Surpassed 500 Travel QSR outlets and Lounges system-wide
• Expanded brand portfolio to 135 brands, adding 16 new brands in the last year
• Increased footprint to 464 Travel QSR outlets and 37 Lounges across domestic and international airports

Growth Drivers

The company's growth was driven by:

1. Like-for-like (LFL) sales growth of 9.2% year-over-year in Q2FY26, despite a 1% decline in passenger traffic
2. Net contract gains of 9.3% year-over-year in Q2FY26, reflecting the mobilization of 50 new Travel QSR outlets and 4 new Lounges

Strategic Developments

TFS continues to strengthen its market position:

• Won new F&B concessions at Cochin Airport Domestic terminal and Delhi IGI Airport Terminal 2
• Launched India's first Gordon Ramsay Street Burger outlet at Delhi's Indira Gandhi International Airport
• Enabled a new technology platform for direct integration with banks and card networks for lounge access

Financial Stability

The company maintains a strong financial position with:

• No debt on the balance sheet
• Cash balance of Rs. 7,490.00 million as of September 30, 2025

Management Commentary

Varun Kapur, Managing Director and CEO of TFS, commented on the results: "This quarter has been marked by robust execution of operations and mobilisation of new sites, taking us over the 500-outlet mark, thereby reinforcing our leadership position in the sector. With our continued focus on driving profitable growth, we delivered a strong financial performance with system-wide sales growth of 18.4% YoY and adjusted consolidated PAT increase of 15.3% YoY in Q2FY26, despite a short-term moderation in passenger traffic."

Outlook

Despite temporary challenges in passenger traffic due to additional maintenance and safety procedures following an aircraft accident in Ahmedabad, TFS remains optimistic about future growth. The company is well-positioned to capitalize on the recovering passenger traffic and is prepared to commence operations at new locations, including Cochin International Airport and the newly built Noida and Navi Mumbai airports.

TFS's strong performance in Q2FY26 demonstrates its ability to navigate challenges in the aviation sector while continuing to expand its presence and improve profitability. The company's focus on revenue enhancement initiatives, strategic expansions, and technological advancements positions it well for sustained growth in the travel food and beverage industry.