- You could capture a multi‑digit upside if TFS sustains its momentum.
- EBITDA margin expanded by 137bps, driven by operating leverage.
- PAT grew ~36% YoY, bolstered by the Adani JV mobilisation.
- Cash balance sits at INR 7.9 bn, providing ample runway for expansion.
- Target price of INR 1,600 implies a 42x Sep’27E EPS valuation.
You missed the Q3 earnings beat, and you might be leaving money on the table.
Travel Food Services (TFS) surprised the market in Q3 FY26, delivering a 1.6% year‑on‑year increase in passenger traffic and a 28% jump in system sales revenue. The catalyst? A swift rebound from H1 disruptions caused by geopolitical tensions and aircraft maintenance hiccups, combined with the operational kick‑off at Delhi Terminal 2 and Navi Mumbai airports. This isn’t a one‑off bounce; the company’s underlying economics are shifting into a higher‑growth gear.
Travel Food Services: Q3 FY26 Results Beat Expectations
The headline numbers speak loudly. System sales revenue surged 28% YoY, while EBITDA margins widened by 137 basis points. The earnings per share (EPS) growth translated into a PAT (profit after tax) increase of roughly 36% YoY, largely thanks to the mobilisation of units in the Adani joint venture. Cash flow generation remains robust, with cash on hand at INR 7.9 bn as of December 2025. The balance sheet is healthy, and the operational leverage suggests that any additional traffic will disproportionately boost profitability.
Why the Passenger Traffic Recovery Matters for Airport Concessions
Passenger traffic is the lifeblood of airport concessionaires. A 1.6% YoY rise might seem modest, but in a sector where growth is typically constrained by capacity caps and regulatory hurdles, it signals a genuine shift in demand dynamics. Higher footfall translates directly into higher sales per passenger (SPP), a key metric for concession revenue. The festive and travel season spike further validates that demand elasticity is improving, allowing TFS to negotiate better concession agreements and extract higher rents from airlines and retailers.
How Competitors Like Tata and Adani Are Positioning Themselves
While TFS expands, peers such as Tata Airport Services and Adani Airports are also sharpening their strategies. Tata has been aggressive in securing long‑term concession contracts at secondary airports, focusing on ancillary services like lounge management and retail. Adani, on the other hand, leverages its infrastructure expertise to bundle airport development with concession rights, creating integrated revenue streams. TFS’s joint venture with Adani gives it a front‑row seat in the Adani ecosystem, meaning the company can benefit from cross‑selling opportunities and shared operational best practices. The competitive landscape is tightening, but TFS’s first‑mover advantage at newly operational terminals provides a moat that isn’t easily replicated.
Historical Patterns: Airport Concession Winners After a Traffic Upswing
History teaches us that concessionaires that successfully ride a traffic rebound often enjoy a multi‑year earnings tailwind. Take the case of GVK Power & Infrastructure in 2015–16: after a 2% traffic lift at Hyderabad airport, the company’s EBITDA margin rose by 210bps, leading to a 45% share price rally over the next 12 months. Similarly, the post‑COVID recovery in 2021 saw a 3% traffic jump at Delhi’s primary terminal, and the concessionaire’s earnings grew at a CAGR of 18% for the next three years. The pattern is consistent—traffic growth fuels higher SPP, which in turn amplifies margin expansion through operating leverage.
Investor Playbook: Bull vs Bear Cases for TFS
Bull Case: The company continues scaling at existing airports (Delhi T2, Navi Mumbai) while launching operations at Noida and mobilising the Kochi domestic airport. Each new concession adds roughly INR 150‑200 mn of incremental revenue, pushing the revenue CAGR to 6% and EBITDA CAGR to 12% through FY28. The 42x September 2027 EPS multiple is justified by the runway of untapped traffic and the ability to extract higher per‑passenger fees. A successful execution could see the share price target of INR 1,600 reached by FY28, delivering a 30‑plus percent upside from current levels.
Bear Case: If geopolitical tensions flare again or if airline capacity remains constrained, passenger traffic could stagnate, throttling SPP growth. Additionally, any delay in the Noida airport launch or cost overruns at Kochi could erode cash reserves, forcing TFS to seek external financing at higher cost. A margin compression of 50bps would push the 42x multiple down to around 30x, trimming the target price to roughly INR 1,150, which represents a 20% downside.
In summary, TFS’s Q3 performance isn’t just a seasonal uptick—it’s a structural shift that aligns with broader industry tailwinds. The combination of robust cash, expanding margins, and strategic JV partnerships makes the stock a compelling addition for investors seeking exposure to India’s burgeoning airport concession market.