1. 🧠 At a Glance
Travels & Rentals Ltd (T&R) is a niche travel solutions provider — tickets, tours, hotel bookings, visa assistance, and insurance bundling. On paper, it’s profitable, has 66%+ operating margins, and an ROCE of 24% — but with working capital days of 1,003, this is the literal definition of “ghoomne ka paisa abhi tak nahin mila.”
2. 🎬 Introduction with Hook
This is not IRCTC.
This is not BLS or Thomas Cook.
This is Travels & Rentals, an SME stock that:
- Reported ₹11.45 Cr revenue in FY25
- Delivered ₹3.22 Cr PAT
- But also sat on ₹9.67 Cr of receivables (966 days) 🤯
- And burned ₹21 Cr in operating cash
In short: profits on paper, panic on cash flow.
3. 🌐 Business Model – WTF Do They Even Do?
T&R offers:
- Airline, rail & hotel booking
- Tours & activities (custom group tours)
- Travel insurance
- Passport & visa processing
Essentially a B2C + B2B travel desk, functioning as a travel aggregator and white-label fulfilment player. It’s not building an app like Yatra or ixigo — it’s running manual margin travel. Surprisingly, it works, just not fast.
4. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue | ₹11.45 Cr |
| Net Profit | ₹3.22 Cr |
| OPM | 66.5% |
| ROE | 15.0% |
| ROCE | 24.1% |
| EPS | ₹2.87 |
| P/E | 17.7x |
| Market Cap | ₹57.1 Cr |
| Book Value | ₹25.2 |
| P/B | 2.0x |
✅ ROE & ROCE are excellent for a services firm
⚠️ Revenues growing, but absolute scale remains tiny
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
Let’s apply Edu-level logic:
- EPS: ₹2.87
- Assign reasonable P/E of 15–20 for travel services
Fair Value = ₹2.87 x 15–20 = ₹43–₹57
🟩 CMP ₹51 = fairly valued to slightly overvalued
But this assumes all receivables actually convert — a big assumption.
6. 🍿 What’s Cooking – News, Triggers, Drama
🧨 FY25 Drama:
- ✈️ Sales up 52% YoY
- 💸 PAT up only 8% (interest cost ballooned)
- 📉 ₹21 Cr negative CFO (biggest red flag)
- ✅ Audit opinion: Clean
- 🗳️ Jun 2025: Shareholders approved authorized capital hike
🔮 Possible triggers:
- IPO fund infusion?
- Receivable monetization?
- Tech pivot to online travel stack?
7. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹11.2 Cr |
| Reserves | ₹17 Cr |
| Borrowings | ₹19.8 Cr |
| Total Assets | ₹52.6 Cr |
| Fixed Assets | ₹0.32 Cr |
| Receivables | ₹9.67 Cr |
| Cash | ₹0.59 Cr |
🚨 Assets are mostly current (no infra)
🚨 Debt is high relative to equity
🚨 No CAPEX or hard assets – business runs on credit, not capital
8. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹+3.02 Cr | ₹+0.14 Cr | ₹-3.16 Cr | ₹0.00 Cr |
| FY24 | ₹-2.42 Cr | ₹+0.47 Cr | ₹+2.02 Cr | ₹+0.07 Cr |
| FY25 | ₹-21.47 Cr | ₹+0.50 Cr | ₹+21.56 Cr | ₹+0.59 Cr |
🔴 FY25 = Complete debt-fuelled growth
🔴 Cash from ops is negative — so profitable but broke
🧯 Can’t grow sustainably unless receivables shorten or capital is infused again
9. 📐 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 15.0% |
| ROCE | 24.1% |
| Debtor Days | 966 ❗❗❗ |
| Working Capital Days | 1,003 |
| Debt/Equity | ~0.9x |
| Promoter Holding | 62.85% |
| Dividend Yield | 0% 🚫 |
📛 966 Debtor Days = literally 2.6 years to collect cash
🎭 ROE is great until you realize it’s on paper only
10. 📈 P&L Breakdown – Show Me the Money
| Year | Sales | PAT | EPS | OPM |
|---|---|---|---|---|
| FY21 | ₹2.0 Cr | ₹0.04 Cr | ₹2.27 | 46.5% |
| FY22 | ₹2.85 Cr | ₹0.69 Cr | ₹39.16* | 55.4% |
| FY23 | ₹5.67 Cr | ₹1.51 Cr | ₹7.51 | 42.0% |
| FY24 | ₹7.53 Cr | ₹2.97 Cr | ₹3.65 | 57.8% |
| FY25 | ₹11.45 Cr | ₹3.22 Cr | ₹2.87 | 66.5% ✅ |
📈 Margins fantastic
📉 EPS diluted due to share base expansion
11. 🥊 Peer Comparison – Who Else in the Game?
| Company | CMP | P/E | ROE | OPM | MCap |
|---|---|---|---|---|---|
| IRCTC | ₹785 | 49x | 37% | 33% | ₹62,820 Cr |
| BLS International | ₹379 | 30x | 34.6% | 28.7% | ₹15,594 Cr |
| Easy Trip | ₹10.4 | 34x | 16% | 24% | ₹3,689 Cr |
| Yatra | ₹82.8 | 35x | 4.8% | 5.6% | ₹1,299 Cr |
| Travels & Rent. | ₹51 | 17.7x | 15% | 66.5% | ₹57.1 Cr |
📌 Cheapest P/E among peers
📌 But also smallest scale, weakest cash position
12. 🧪 Miscellaneous – Shareholding, Promoters
| Category | % Holding |
|---|---|
| Promoters | 62.85% |
| FIIs | 0.51% |
| Public | 36.64% |
| Total Holders | 304 |
✅ Promoter holding stable
⚠️ No institutions yet
🎯 Low float = speculative moves possible
13. ⚖️ EduInvesting Verdict™
“Travels & Rentals is the only travel company where you book now, pay later — but as a shareholder.”
📈 Positives:
- Excellent margins
- Low valuation
- Profitable, ROE/ROCE above 15%
- Promoter stable
📉 Negatives:
- Debtor days = extreme risk
- Zero dividend history
- Poor cash flow despite profits
- ₹21 Cr debt to run ₹11 Cr topline business
⚖️ Verdict:
This stock is a cash flow trap disguised as a high-margin gem.
It looks profitable, but until receivables normalize, it’s financial fantasy tourism.
💰 Edu Fair Value Range = ₹43 – ₹57/share
(CMP ₹51 = fairly valued, but barely investable without a receivables fix)
✍️ Written by Prashant | 📅 08 July 2025
Tags: Travels & Rentals Ltd, travel SMEs, working capital trap, high margin low cash, EduInvesting analysis, debt-fueled SME stocks, travel IPO
