Travel Food Services Reports 50.5% Profit Growth in Q2FY27 Despite Airport Passenger Traffic Decline

Travel Food Services Limited (TFS), which operates travel quick-service restaurants (QSRs) and airport lounges, reported a 50.5% year-on-year increase in consolidated profit after tax (PAT) to Rs 1,473 million for the second quarter of FY27, despite a challenging operating environment and declining passenger traffic. Consolidated sales increased 19.5% to Rs 4,253 million during the quarter ended September 30, 2026.

For the first half of FY27, consolidated sales reached Rs 8,775 million, registering 20.1% growth compared with the corresponding period last year. Consolidated PAT increased 43.2% to Rs 2,761 million. The company's system-wide sales grew 18.8% to Rs 8,654 million in Q2FY27 and 18.4% to Rs 17,090 million during H1FY27.

The growth was supported by new outlet mobilisation, expansion of airport contracts and improvements in existing operations. Net contract gains contributed 11.1% to system-wide sales growth in Q2FY27 and 13.5% in H1FY27. TFS mobilised more than 70 units over the last 12 months, primarily across New Delhi, Cochin, Navi Mumbai, Noida and Bhogapuram airports.

However, existing outlet performance faced pressure from lower passenger movement. System-wide like-for-like (LFL) sales increased 3.5% during Q2FY27 and 2.2% in H1FY27, while passenger traffic across TFS-managed airports declined 4.8% and 2.2%, respectively. The company attributed the decline to factors including geopolitical developments in West Asia, elevated airfares and changes in airline schedules and capacity.

On a consolidated basis, net contract gains contributed 11.0% to sales growth in Q2FY27 and 15.7% in H1FY27. Existing outlet LFL sales increased 6.6% and 5.3%, respectively, supported by menu optimisation and premiumisation initiatives.

The company also reported an improvement in its consolidated PAT margin, which increased to 34.6% in Q2FY27 from 27.5% in the corresponding quarter last year. For H1FY27, the margin stood at 31.5%, compared with 26.4% in H1FY26. However, profitability included a net-of-tax write-back of provisions amounting to approximately Rs 468 million in Q2FY27 and approximately Rs 566 million in H1FY27. The first-half figure also includes a partial GST provision write-back of approximately Rs 98 million recognised in Q1FY27.

TFS expanded its system-wide airport presence to 22 airports as of September 30, 2026, compared with 18 airports a year earlier. Its Travel QSR network increased to 535 outlets from 464 outlets, while its lounge portfolio stood at 35 compared with 37 in the previous year. The reduction in lounge numbers was primarily linked to terminal transitions and airport infrastructure renovations.

The company also increased its system-wide brand portfolio to 156, adding 21 in-house, regional and international brands over the past 12 months. New outlet mobilisation included operations at Delhi Airport's Terminal 1 and Terminal 2, Cochin Airport's Domestic Terminal 1 and the recently opened Noida Airport. TFS also commenced operations at Alluri Sitarama Raju International Airport, Bhogapuram.

Alongside its restaurant and lounge business, the company is expanding its passenger service operations through Elite Assist Technology and Services Private Ltd. (EATS), with a focus on extending lounge access distribution beyond traditional banking and card-network channels. Its Kyra Lounge at Hong Kong International Airport was also named Asia's Leading Airport Lounge at the World Travel Awards 2026 for the second consecutive year.

Varun Kapur, Managing Director and CEO, TFS, said, “It was one of the most challenging quarters for passenger traffic in recent periods, amid an unusually volatile operating environment. Despite these headwinds, TFS' system-wide sales grew 18.8% year-on-year and the business continued to deliver healthy underlying profitability, demonstrating the resilience of our portfolio and expanding network. This performance reinforces our confidence in the business and its ability to grow through periods of near-term volatility. Our strategy remains focused on strengthening the core while building the next phase of growth for TFS. Over the last twelve months, we have mobilised more than 70 units and expanded our presence to 22 airports. Many of these are still ramping up, and with a significant pipeline of outlets yet to be mobilised across new and existing airports, we have good visibility of continued growth as these operations mature. Alongside this, we continue to develop new growth avenues in passenger services, including EATS. Looking ahead, our priorities remain clear: deepen our presence at existing airports, scale operations across new and greenfield airports, and selectively expand beyond our core, particularly in international lounges and expressways. With a strong, debt-free balance sheet and an expanding network, we believe TFS is well positioned to capture the long-term growth opportunities across the aviation and broader travel ecosystem.”

As of September 30, 2026, TFS maintained a debt-free balance sheet with a cash balance of Rs 10,309 million. The company expects operating conditions to improve gradually in the second half of FY27, supported by seasonal travel demand and the potential easing of geopolitical pressures. Its expansion strategy remains focused on increasing its airport presence, ramping up recently opened outlets and developing opportunities in international lounges and expressway-based foodservice operations.