INTERNATIONAL TRAVEL HOUSE   BSE CODE 500213

Cmp 272 market cap 217 crores

Book value 92

ITHL commenced its operations in 1981 and has a full bouquet of travel services.  It is a part of the ITC group which owns around 61% stake in the company.

The client group of ITHL includes NDTV, Siemens, Citibank,HCL, ABN, Samsung, Essel Group,3M among others.

The services offered include corporate travel, car rentals, destination management, World Class Holidays, Conference management, Incentive group travel and foreign exchange.  The company owns a fleet of 900 cars which also includes outsourced ones.

ITHL has been appointed General Sales Agent of Globus/Cosmos, which is a leading Coach/Integrated travel company in the world with Holiday Programmes in US, Canada, Africa, Europe.  The company expects to leverage on this relationship to develop outbound leisure business.

The company is also focussing on Medical Tourism as one of its growth drivers.   It is now  also concentrating on Confernces and Exhibition business.  Travel Insurance also offers a good growth avenue.

MICE --- Meeting, Incentive, Conference and Exhibition tourism has picked up pace in recent years and the company is focussing on this segment.

FINANCIALS

YEAR	05	06	07	08	09	10	HY 11
SALES	47	60	74	79	104	108	68
NP	4.6	7	10.2	10.5	8.2	11.3	8.17

 

The company has shown steady growth in terms of sales and profits except for the hiccup in 09 due to global turmoil.

First Half for FY 11 has been excellent with company showing Sales of 68 crores against 46 cr for H1FY 10 and net profits of 8.17 crores vs 3.94 crores. Second half is usually better so the company should show net profits of around 18 crores which on an equity base of around 7.99 crores gives an EPS of around 22 which at cmp of around 272 gives a PE of around  12.4 which for an ITC promoted company with good growth prospects looks attractive. 

ITHL is a smaller player as compared to Cox and Kings and Thomas Cook but looking at strong parentage of ITC and recent developments, if the company manages to continue the growth shown in recent quarters, there might be a case for a rerating.

 

More than 70% of their business comes from car hiring, which needs to be divided, and we just can't take a decision based on last qtr results alone as the income had increased due to majority of business must have come from the common wealth games, no doubt for argument one can say, that next cricket world cup will be a booster to their earnings but beyond that, the parent will squeeze out earnings from ITHL leaving it with low operating margins, thats my point of view, but we should have a healthy discussion on this one.

You can find the HDFC Securities research report on ITH here.

Edited by Koti_gunda - 19/Nov/2010 at 12:34pm

I see Travel house supply cars to non ITC hotels as well.....their drivers are invariably very well behaved, their cars are of great quality