Motilal Oswal Financial Services has highlighted TBO Tek and Ixigo as the top beneficiaries of India's expanding digital travel ecosystem, which is forecasted to reach Rs 3.84 lakh crore by FY28. The brokerage issued "Buy" ratings for both firms, pointing to TBO Tek's global B2B supplier moats and Ixigo's strong consumer penetration in non-metro markets.
MUMBAI — Highlighting a multi-year shift in how consumers plan domestic and international transit, Motilal Oswal Financial Services has formally declared its backing for key travel-technology enterprises. In a comprehensive sector report released this week, the institutional brokerage firm named TBO Tek Limited and Le Travenues Technology (commonly known as Ixigo) as primary beneficiaries of India's structural travel boom.
According to research metrics compiled by the brokerage, India’s aggregate Online Travel Agency (OTA) ecosystem is projected to expand significantly over the next few years. The market is forecasted to rise from Rs 2.08 lakh crore in FY23 to nearly Rs 3.84 lakh crore by FY28. This growth trajectory, outstripping many mature global consumer economies, is primarily fueled by a rising underpenetrated digital travel layout outside metro regions. Motilal Oswal expects online booking market share to climb to 65% from the current baseline of 54%, positioning highly integrated platforms for high-tier earnings compounding.
TBO Tek Evolving as a Dominant B2B Travel Aggregator
Within its travel recommendations, Motilal Oswal reiterated a firm "Buy" rating on TBO Tek Limited, setting a distinct target price of Rs 1,765. The tech-driven business-to-business (B2B) aggregator acts as a critical intermediary layer, connecting over 750 global airlines and more than 1 million hospitality providers with roughly 50,000 active travel buyers and independent agencies worldwide.
Investment analysts estimate that TBO Tek will deliver a compound annual growth rate (CAGR) of 29% in revenue and 43% in profit after tax (PAT) over the FY26–FY28 window. This growth is expected to be anchored by an increasing share of high-take-rate hotel and ancillary segments in its total Gross Transaction Value (GTV) mix, alongside successful consolidation efforts like its $125 million acquisition of US-based Classic Vacations.
Furthermore, the company's asset-light model benefits directly from a structurally negative working capital cycle, creating excellent free cash flow generation to insulate corporate investors.
Ixigo Tapping Massive Growth in Non-Metro Tier-2 and Tier-3 Hubs
Concurrently, Motilal Oswal initiated direct coverage on Ixigo with a "Buy" rating and a target price of Rs 217, representing an estimated 24% upside potential. Positioned as India’s second-largest consumer-facing OTA by transaction value, Ixigo maintains a monthly active user footprint exceeding 85 million individuals, heavily concentrated in emerging regional markets.
The brokerage pointed out that roughly 94% of Ixigo’s current passenger bookings originate from or terminate in non-Tier-1 cities. This clear focus on middle-income consumer demand gives the company a structural advantage in customer acquisition costs (CAC).
By operating a multi-app platform centered heavily around its core train-ticketing business—where it commands a major 60% market share—Ixigo uses low-cost consumer utility to successfully cross-sell higher-margin services. This has driven a projected flight, train, and bus GTV growth CAGR of 22%, 17%, and 34%, respectively, over the medium term.
Official Sources Section
According to official equity research disclosures published by Motilal Oswal Financial Services Limited, financial model targets are calculated based on audited corporate earnings releases from the March 2026 fiscal quarter, combined with verified sector statistics derived from the federated Federation of Indian Chambers of Commerce & Industry (FICCI) and the Ministry of Tourism.
Quote Section
"The Indian travel market has evolved significantly over the past two decades—moving from a fragmented, offline agent-driven market to a digitally enabled ecosystem," stated senior research analysts within the Motilal Oswal thematic report. "The next structural phase of margin expansion will be driven by localized front-end tools, mobile-first app interfaces, and artificial intelligence extensions that assist the growing volume of first-time international travelers moving out of non-metro locations."
Why It Matters
The structural shift of India's leisure and corporate hospitality systems into high-efficiency digital frameworks has direct practical results for modern portfolio investors and retail consumers. As platforms like TBO Tek streamline global hotel logistics for independent travel agencies, they eliminate operational friction for travelers seeking customized itineraries. For consumer businesses, the aggressive expansion of mobile-led booking apps like Ixigo ensures that smaller industrial cities gain direct, affordable access to domestic flight options, driving broader commercial connectivity across the country.
Key Facts at a Glance
The Core Thesis: Motilal Oswal projects India's broader online travel platform market to reach nearly Rs 3.84 lakh crore by FY28 due to rising digital adoption.
TBO Tek Projections: Rated a premium "Buy" with a target of Rs 1,765, supported by a projected 43% profit CAGR over the FY26–FY28 period.
Ixigo Positioning: Initiated with a "Buy" rating and a target price of Rs 217, leveraging a highly sticky 85-million monthly active user base.
Geographic Driver: Over 94% of Ixigo’s transaction pool involves non-Tier-1 hubs, showing that the next leg of consumer growth is concentrated outside metro areas.
Frequently Asked Questions (FAQ)
Q1: Why is Motilal Oswal optimistic about India's travel tech companies?
The brokerage views travel technology as a structural play on India's rising discretionary income. Increased internet penetration in Tier-2 and Tier-3 towns is shifting traditional offline bookings toward online platforms at a faster rate than in mature Western markets.
Q2: What gives TBO Tek a specific competitive advantage?
TBO Tek operates a highly scalable, B2B model that aggregates complex hotel and airline supplies across 88 currencies. Its negative working capital structure and low capital expenditure requirements allow for steady margin expansion as transaction volumes grow.
Q3: How does Ixigo maintain lower customer acquisition costs compared to its rivals?
Ixigo uses its free or low-fee train tracking and utility features to attract millions of users organically. Once these users are engaged on the app, the company cross-sells higher-margin flight, bus, and hotel bookings without paying high third-party advertising fees.
Q4: What are the main risks associated with investing in the online travel sector?
Key operational risks include volatility in jet fuel pricing that can impact airfares, potential macroeconomic headwinds affecting discretionary leisure spending, and shifts in regional geopolitical stability that can influence international tourism routes.
Source: Motilal Oswal Institutional Equity Research Databases, Corporate Performance Filings on the National Stock Exchange of India (NSE), and Ministry of Tourism Market Reports.
