Brokerage Sees 34% Travel Food Services Upside on Airport Expansion

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Overview

B&K Securities initiates 'Buy' on Travel Food Services, setting a target price of ₹1,530, implying a 34.4% potential gain. The firm cites India's expanding airport network, robust F&B demand, and strong operational execution as key growth drivers. Joint ventures with Adani and GMR Airports are expected to further widen the growth runway.

Brokerage Initiates 'Buy' on Travel Food Services

B&K Securities has launched coverage on Travel Food Services (TFS) with a conviction 'Buy' rating, assigning a target price of ₹1,530 per share. This valuation suggests a potential upside of 34.4% from the stock's closing price of ₹1,138.05 on Thursday.
The brokerage's valuation is anchored at 40 times projected FY27-28 earnings per share (EPS), employing a 2.5 times price-to-earnings-growth (PEG) ratio. This reflects confidence in the company's strong cash-flow generation and return metrics. Currently, TFS trades at approximately 33.8 times and 26.7 times its estimated earnings for FY27 and FY28, respectively.

Airport Network Expansion to Fuel Growth

Analysts anticipate TFS will significantly benefit from India's aggressive airport infrastructure development. New terminals and expanded capacities are projected to drive steady passenger growth at a rate of 1.5 to 2 times the country's gross domestic product (GDP).
Airport food and beverage (F&B) demand is deemed structurally resilient. Semi-captive customer bases, strong visibility tied to passenger throughput, and relatively inelastic pricing contribute to this resilience. TFS, with its substantial market share in airport quick-service restaurants (QSRs) and lounges, is positioned to capture this multi-year, footfall-driven growth cycle.

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