International Travel House Profit Slips 14% as Costs Outpace Revenue
The travel management firm saw revenue grow 3.4% year-on-year, but a sharp rise in employee and operational expenses pushed net profit down and squeezed margins.
International Travel House reported a 3.4% rise in Q2 FY27 revenue to ₹61.4 crore, but profit fell 13.9% to ₹5.5 crore. The decline was driven by cost inflation, particularly a 7.5% jump in employee expenses, which compressed the net profit margin.
For a corporate travel manager, a steady stream of bookings is only half the battle. The other is keeping costs from eating the gains. International Travel House's September quarter shows that fight is getting harder, with revenue growth overshadowed by a sharper profit decline.
The numbers tell a story of diverging paths. Revenue for Q2 FY27 came in at ₹61.4 crore, up 3.4% from a year ago and a solid 11.1% from the June quarter. Yet, profit fell 13.9% year-on-year to ₹5.5 crore, and even slipped 2.5% sequentially. The net profit margin compressed by 180 basis points to 9%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 61.4YoY +3.4% | 55.27 | 59.38 |
| Profit (₹ Cr) | 5.5YoY -14% | 5.64 | 6.39 |
| Net Profit Margin (%) | 9.0YoY -17% | 10.2 | 10.8 |
The cost wall that revenue hit
The profit squeeze had a clear source. According to a ScanX report, total expenses grew 3.4% year-on-year, outpacing the modest revenue increase. Employee benefits expense rose 7.5%, while car hire charges, a major operational cost, increased 1.7%. This mismatch shrank the profit before tax margin from 14.2% to 12.1%.
Management did not flag any one-off costs for the quarter. The pressure came from these fixed and semi-variable costs rising in an environment where top-line growth remains muted. For the first half of FY27, revenue is actually down 1.2% compared to H1 FY26.
A market of mixed signals
The broader demand environment offers little near-term relief. Industry reports like Advito's Travel Price Index note that India is a key growth market, but also highlight volatile airfare and hotel costs. Corporate travel budgets are growing, but scrutiny on return on investment is tightening.
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This creates a challenging backdrop. International Travel House can book more trips, but the cost of delivering those services—from salaries to ground transport—is rising. Passing those costs fully to corporate clients focused on budgets is difficult.
Investing through the squeeze
The company is not standing still. A report in The Economic Times noted its parent, ITC, invested ₹16 crore into the business for a new web portal, payment gateway, and destination management services. This points to a longer-term play for efficiency and new revenue streams, like niche leisure tours.
However, these investments take time to bear fruit. In the near term, the core corporate travel business must navigate the gap between slow revenue growth and sticky cost inflation.
Key Points
- Revenue grew 3.4% year-on-year and 11.1% quarter-on-quarter to ₹61.4 crore, showing a sequential recovery in business volumes.
- Profit declined 13.9% year-on-year and 2.5% sequentially to ₹5.5 crore, as cost growth outpaced revenue.
- The net profit margin fell 180 basis points to 9%, pressured by a 7.5% rise in employee costs and higher car hire charges.
- For the first half of FY27, cumulative revenue was down 1.2% year-on-year, while profit fell 16.1%.
- The company is investing in digital platforms and new service verticals, but these are long-term plays against immediate margin pressure.
Hexa Perspective
The quarter underscores a margin squeeze that has been building. With a trailing-twelve-month net profit margin of 7.1%, profitability is already below the latest quarter's level. The core issue is structural: employee and operational costs are rising in a market where pricing power for travel management services appears limited.
The path forward hinges on whether the recent sequential revenue growth is sustainable and can outpace cost inflation. The current investments in technology and niche tourism are sensible diversifications, but they are unlikely to shift the earnings trajectory in the next few quarters. Investors are left weighing a stable, debt-light balance sheet against a profitability trend that is yet to find a floor.
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