Management

• Ashwani Kumar Puri (Chairman and Independent Director),
• Varun Kapur (Varun Kapur),
• Geeta Mathur (Independent Director),
• Karan Kapur (Non-executive Director),
• Sonu Halan Bhasin (Non-executive Director),
• Vikas Vinod Kapoor (Chief Financial Officer).

Use of Proceeds

The total issue size is Rs. 2,000 cr, which is entirely an offer for sale (OFS). The company will not receive any proceeds from the Offer and all the Offer Proceeds will be received by the Promoter Selling Shareholder.

Industry

Robust Aviation Sector Growth Backed by Demand and Supply Drivers India’s aviation sector is poised for strong growth, driven by both demand and supply-side enablers. Domestic air passenger traffic is projected to grow at a CAGR of 8–9%, while international traffic is expected to rise at 6–8% between FY 2025 and FY 2034. A key contributor is the rising dominance of Low-Cost Carriers (LCCs), whose share of domestic air traffic has surged from 66% in FY 2016 to ~75% by H1 FY 2025. This increased accessibility enables more frequent travel, supporting both business and leisure mobility. On the infrastructure front, capital expenditure in 30–35 Indian airports is underway, including greenfield and brownfield projects. The number of operational airports is expected to rise to 165–185 by FY 2029 and 185–205 by FY 2034. By 2047, the Government of India targets 300 airports, significantly expanding the addressable market for airport-based businesses such as Travel QSRs and Lounges.

Demand for Travel QSRs and Lounges Fuelled by Airport Behaviour Airport-based Travel QSRs and Lounges in India are experiencing increasing demand due to changing travel patterns and infrastructure improvements. Indian passengers tend to spend more time at airports than the global average due to early check-in counter closures. As airports adopt more streamlined processing systems, dwell times are expected to further increase, enhancing consumption opportunities for food, beverages, shopping, and lounges. Travel QSRs specifically benefit from the LCC boom, as most LCCs don’t offer complimentary in-flight meals, encouraging passengers to make pre-boarding food purchases. Simultaneously, Lounges are gaining from the expansion of credit card and loyalty programs that offer Lounge access, making premium airport services accessible to a broader set of travelers. These trends together create a favorable environment for airport-based F&B and Lounge services, especially as more airports are developed and passenger traffic continues to rise steadily.

Underpenetrated Lounge Market and Highways Offer Long-Term Growth India's airport Lounge market remains significantly underpenetrated, offering substantial room for growth. As of September 2024, Indian airports had just 0.7 Lounges per airport on average, with major hubs like Delhi, Mumbai, and Bengaluru having 8–10 Lounges each—far fewer than global standards. The Indian Lounge industry is projected to grow at a CAGR of 22–24% from FY 2025 to FY 2034, reaching Rs 155–165 billion. Globally, the Lounge sector is also expected to expand rapidly. Additionally, there is growing potential in the highways segment. The National Highways Authority of India (NHAI) is targeting the development of 1,000 Wayside Amenities (WSAs) to improve travel experiences. As of March 31, 2025, India had 21 operational expressways, with projections of 35–45 by FY 2029 and 55–65 by FY 2034. This infrastructure expansion presents a parallel growth opportunity for expressway Travel QSRs, offering a scalable complement to the airport-based model.

Competitive Strengths

Leading Player in the Travel QSR and Lounge Sectors in Indian Airports The company is the market leader in the Travel QSR and Lounge sectors within Indian airports, based on FY2025 revenue. As of March 31, 2025, it operated the largest network of Travel QSRs and private airport Lounges in India, holding ~26% market share in airport Travel QSRs and ~45% in airport Lounges. Its presence spans 14 key Indian airports including Delhi, Mumbai, Bengaluru, Hyderabad, and Chennai. With this strong foundation, the company is well positioned to capture expected growth within the Indian Travel QSR and Lounge sectors given its presence within these airports. Long-term concessions averaging 8.21 years and a high contract retention rate of 93.94% further strengthen its leadership position.

Strong Expertise in Managing F&B in Complex Airport Environments Operating in high-security airport environments requires specialized capabilities. The company has built an experienced team that manages complex operations like security clearances, outlet construction, and daily logistics across terminals. To efficiently handle diverse menus, multiple brands, and varying passenger flows, the company developed a robust infrastructure—central kitchens located near terminals, streamlined SOPs, and multiproduct supply chains. These central kitchens feature multi-cuisine setups to ensure timely service and freshness. This operational depth enables the company to handle sudden demand spikes, deliver consistent quality, and cater to varied F&B expectations in a challenging airport environment.

Proven Track Record and Long-Term Concessions with Airport Operators The company has developed long-standing relationships with airport operators, being present at key hubs like Delhi (15 years), Mumbai (16 years), Bengaluru (6 years), and Chennai and Kolkata (11 years). It has operated in Delhi Terminal 3 and Mumbai Terminal 2 since their respective launches. As of March 31, 2025, it had 70 airport concessions across India, Malaysia, and Hong Kong with average concession tenures of 8.21 years. Strategic JVs with GMR and partnerships with Adani Airport Holdings and AJ Holding helped secure operations at major airports like Hyderabad, Goa Mopa, Mumbai, Ahmedabad, and Navi Mumbai.

Diversified and Strategic F&B Brand Portfolio The company had 127 F&B brands as of March 31, 2025, comprising 90 licensed international and regional partner brands and 37 in-house brands. Global names like KFC, Pizza Hut, Wagamama, Subway, and Krispy Kreme, along with Indian brands like Bikanervala and Third Wave Coffee, diversify its portfolio. In-house brands such as Caféccino, Curry Kitchen, and Dilli Streat enhance flexibility and exclusivity. This wide portfolio has been instrumental in winning key tenders, including Bengaluru’s new terminal and Noida airport in 2024. It strengthens competitiveness, allowing tailored offerings based on location, demographics, and travel behaviors.

Deep Understanding of Traveller Preferences and Customer Experience Focus To cater to evolving traveler needs, the company has introduced innovations like self-order kiosks, contactless payments, grab-and-go fridges, and the Food@Gate™ in-airport delivery service. It simplifies menu layouts, uses imagery, and provides combo options to ease ordering and speed up service. Pricing and sales strategies are tailored to airport-specific demographics. Takeaway-friendly packaging enhances convenience. In Lounges, premium experiences like chef-curated menus, spa services, live music, cocktail bars, and entertainment zones (e.g., golf simulators) elevate the offering. These thoughtful enhancements demonstrate a deep understanding of traveler expectations and drive higher satisfaction and engagement.

Peer Comparison

Key Risks & Concerns

• The firm derived 95.55% of revenue from operations in FY25 from travel QSRs and lounges, with 85.94% of it coming from the top 5 airports. Termination of the concession agreement or a decrease in passenger traffic can impact revenue.
• Revenue from franchised brand partners stood at 54.37% of Travel QSR revenue in FY25. Failure to attract new brand partners or maintain existing ones could affect business.
• There are outstanding legal matters against the firm, certain promoters and directors and one of its subsidiaries. Any adverse decision in such cases may render the company liable to liabilities or penalties, which may affect business.

Outlook and Valuation

Travel Foods Services stands out as a dominant player in India’s Travel QSR and Lounge sectors, with a 26% and 45% market share in each, respectively, as per FY25 revenue. Its diversified portfolio includes 90 partner F&B brands such as KFC, Wagamama, and Bikanervala, alongside 37 in-house brands like Caféccino and Idli.com. The brand strategy enables tailored offerings and strengthens its ability to win new airport concessions. Its footprint covers 14 major Indian airports, including 13 of the top 15 by passenger traffic, collectively serving 89% of India’s air passengers. With 384 QSR outlets and 28 Lounges in key hubs like Delhi and Mumbai, the company enjoys unmatched scale. A high contract retention rate of 93.9% and average concession tenures of over eight years highlight its long-term operator partnerships. These factors, combined with promoter support from SSP Group and K Hospitality, make it a preferred partner for global brands seeking strategic entry into India.

With 16 years of operational experience since launching its first outlet in 2009, the company has demonstrated strong execution in the demanding airport environment. It maintains compliance with airport security regulations through dedicated teams managing BCAS and CISF clearances. Its centralised kitchens near airport terminals supply fresh multi-cuisine food efficiently and consistently. The ability to handle sudden volume spikes and run 24/7 operations gives it a significant competitive edge. Additional innovations such as online ordering, self-kiosks, grab-and-go fridges, and the proprietary Food@Gate™ delivery system boost service convenience and enhance customer satisfaction. This strong operational backbone has improved the company’s value proposition to airport operators, supporting its continued success in securing prime locations and long-term concessions. By adapting brand menus and services to specific airport demographics and constraints, it remains flexible and resilient in a sector where execution, compliance, and service quality are crucial differentiators.

India’s aviation market is projected to grow rapidly, with the number of airports expected to reach 185–205 by FY34, offering significant tailwinds for Travel QSR and Lounge operators. Low-cost carriers, underpenetration of air travel, higher airport dwell times, and a growing demand for better in-terminal F&B options are all structural tailwinds for the business. TFS is well-positioned to capitalize on this opportunity due to its scalable model, diversified brand mix, and deep airport relationships. Its financials reflect strong growth, with revenue increasing from Rs 10,672 million in FY23 to Rs 16,877 million in FY25, and net profit rising from Rs 2,513 million to Rs 3,797 million over the same period. The company also plans to drive same-store growth through menu optimization, service upgrades, and premium lounge experiences. TFS's operations are fundamentally dependent on the concession agreements and the terms and conditions negotiated with airport operators. Airport operators aiming to improve their profitability may exert pressure on the TFS business model and its long-term financial success, akin to previous situations where TFS was compelled to reduce its ownership in operating entities. Additionally, TFS lacks exclusive rights to set up travel QSR and lounges at all airports where it functions, thereby constraining its capacity to realize its complete revenue potential.  At the upper price band of Rs 1,100, the stock is valued at 23 times EV/EBITDA & 39.9x P/E based on FY25 EPS, which is at a discount to listed QSR peers.  We recommend aggressive investors to SUBSCRIBE to the issue.