Best Travel Stocks in India

15 April 2024
7 min read
Best Travel Stocks in India
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(The stocks mentioned in the blog are as per Market Capitalization)

India's travel and tourism industry stands as the largest service sector, offering heritage, cultural, medical, business and sports tourism experiences. This sector aims to promote tourism and make India a top destination for travellers. It also wants to create more jobs and boost the economy by offering new and diverse tourism experiences. 

Travel Industry in India - A Brief Overview

India, with its rich cultural diversity, stands as one of the leading countries in terms of international tourism spending. According to IBEF's report on the Growth of the Tourism and Hospitality Industry, travel and tourism are among India's largest industries. It contributes approximately US$ 178 billion to the country's GDP.

India offers a wide range of specialised tourism experiences, including cruises, adventure, medical, MICE (Meetings, Incentives, Conferences, and Exhibitions), film, wellness, sports, rural, eco-tourism and religious tourism.

The tourism sector plays a significant role in the Make in India initiative, acting as a crucial economic driver that fosters job creation and rapid progress. It serves as a catalyst for the development of multi-use infrastructure, such as top-notch hotels, resorts, fine dining establishments, efficient transportation systems (roads, shipping, aviation and railways), and cutting-edge healthcare facilities.

The travel market in India is projected to reach US$ 125 billion by 2027, with international tourist arrivals expected to reach 30.5 million by 2028.

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Top Travel Stocks in India in 2024 as per Market Capitalisation

The following table outlines the top travel stocks to invest in India in 2024, sorted as per market capitalisation:

S.No.

Travel Stocks in India (as per market capitalisation)

1.

IRCTC

2.

EaseMyTrip

3.

Thomas Cook India

4.

Yatra Online Limited

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Travel Stocks in India as per Market Capitalisation

Here is a comprehensive overview of the best tourism sector stocks in India according to market capitalisation:

1) IRCTC

The Indian Railway Catering and Tourism Corporation Limited (IRCTC) is a Central Public Sector Enterprise under the Ministry of Railways, Government of India, holding the status of ‚ÄėMini Ratna (Category-I)‚Äô. It provides online train tickets, food services and bottled water on stations and trains.

The company offers different services like tourism, catering, internet ticketing, Rail Neer and State Teertha. IRCTC  fosters domestic and international tourism by providing budget hotels, special tour packages, global reservation systems and more. 

Its catering services include mobile, e-catering and stationary options like food plazas and refreshment rooms. The company runs 16 Rail Neer plants, with 4 in-house and 12 in partnership with others. Its tour packages offer confirmed beds, transport, lodging, sightseeing and insurance.

2) EaseMyTrip

Easy Trip Planners Limited offers reservation and booking services for travel and tourism. It operates in segments like air passage, hotel packages and other services.

EaseMyTrip’s air passage segment enables customers to book international and domestic air tickets through online platforms, mobile apps and call centres. The hotel packages segment provides hotel bookings, holiday packages and cruise packages. 

Additionally, it offers services like charters, booking rail and bus tickets, and taxi rentals, as well as value-added services such as travel insurance and visa processing. The company also provides information and various tools that customers might require to plan, book and buy travel-related products and services. Its subsidiaries include EaseMyTrip UK Limited and EaseMyTrip Middle East DMCC.

3) Thomas Cook India

Established in 1881, Thomas Cook (India) Limited (TCIL) stands out as the top omnichannel travel company in India. It offers a wide range of services, including Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Value Added Services and Visa Services. The company provides travel and related services, covering tour operations, travel management, visa services, travel insurance and associated services.

TCIL operates several well-known B2B and B2C brands such as Thomas Cook, TCI, SOTC, SITA, Allied TPro, Australian Tours Management, Asian Trails, Desert Adventures, Travel Circle International Limited (TCI) and more. As one of the major travel service providers based in the Asia-Pacific region, the Thomas Cook India Group has a presence in 28 countries across 5 continents.

4) Yatra Online Limited

Yatra Online Limited is a leading online travel company in India, dedicated to providing an exceptional customer experience. Since its inception in 2006, it has served over 7 million customers with a wide range of travel-related services.

Yatra Online provides travel services for both business and leisure travellers, offering information, pricing, availability and booking options for domestic and international air travel. 

Its services include booking domestic and international air tickets, hotels, homestays, holiday packages, bus and rail tickets, as well as activities and other related services.  Recognised for its reliability and innovation, Yatra has won numerous awards, including accolades from the Ministry of Tourism, the Government of India and other government bodies.

Factors to Consider Before Investing in Travel Stocks in India

Before buying the travel stocks in India in 2024, you must consider the following essential factors:

  • Government Regulations¬†

Transport, especially airlines and cruise ships, is the largest CO2 emitter. As governments strive to meet net zero and emission targets, they are likely to impose stricter regulations and taxes on the travel industry.

Investors should consider companies that anticipate these regulatory changes and implement strategies to mitigate their impact, as this can affect their long-term stock performance.

  • Pent-up Demand

After the removal of Covid-19 restrictions, there has been a noticeable surge in enthusiasm for travel, with leisure travel experiencing an unprecedented boost. Investors should consider companies positioned to benefit from this increased demand for travel.

  • Budgetary Incentives

Following Finance Minister Nirmala Sitharaman's announcement on February 1 regarding long-term interest-free loans for states to develop tourist centres, shares of travel-related companies experienced a surge. Investors should closely monitor companies that are leveraging this government incentive.

  • Industry Outlook

Stay updated on the latest trends and challenges in the tourism industry, such as technological advancements, consumer behaviour, competition, regulatory changes and environmental considerations. Being aware of these factors can help you make informed investment decisions.

  • Company Performance and Financials

Before investing, thoroughly analyse the financial statements and metrics of the tourism companies you are interested in. This should include examining their revenue, earnings, debt levels, cash flow, profit margins, return on equity and price-to-earnings ratio.

Should You Invest in Travel Stocks?

If you are considering investing in the tourism stocks in India, it is essential to consider the risks involved in the industry. The travel sector is vulnerable to various risks that can affect investment outcomes.

Economic downturns, such as recessions or global crises, can significantly impact travel demand as people cut back on discretionary spending, including vacations and leisure travel. Additionally, natural disasters and pandemics can disrupt travel plans, leading to a decline in revenue for travel companies.

Furthermore, competition within the travel industry can be fierce, with numerous companies competing for market share. This competition can result in price wars and thin profit margins, affecting the financial performance of travel stocks. Moreover, non-compliance with regulations can lead to fines, legal liabilities and reputational damage. 

Keeping these risks in mind, you should do a proper analysis of the travel stocks before making investment decisions.

The Bottom Line

Investing in the best tourism sector stocks offers you a valuable diversification strategy as the global tourism industry expands, increasing the demand for hotels and accommodation.

By spreading your investments across different sectors of travel, including hospitality, you can mitigate the risk involved and increase your returns. However, before investing you must keep in mind the above-mentioned factors and the risk you are willing to take.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation

These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. 

It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. 

This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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