CRISIL has reaffirmed the long-term credit rating for Thomas Cook (India) Limited at “Crisil AA/Stable” and the short-term rating at “Crisil A1+” as of March 31, 2026. The ratings reflect strong support from parent Fairfax, a dominant position in the forex business, and healthy liquidity. Key concerns include vulnerability to geopolitical risks and intense industry competition. The outlook remains stable, underpinned by robust operational performance in travel and related services.
Credit Rating Reaffirmation Announced
Thomas Cook (India) Limited (TCIL) today announced that CRISIL has reaffirmed its credit ratings in a letter dated March 31, 2026. The reaffirmation confirms the long-term rating at “Crisil AA/Stable” and the short-term rating at “Crisil A1+”. This decision reflects the sustained strength of the company’s operations and financial risk profile over the preceding period.
Key Rating Strengths
Strategic Parental Support
The ratings are centrally underpinned by the expectation of continued, need-based support from the strong parent, Fairfax. TCIL is deemed strategically important to Fairfax, one of the primary acquisition vehicles in India. This support has historically included significant funding infusions, such as the Rs 436 crore OCCRPS infusion in March 2021, which was subsequently converted to equity, boosting liquidity and mitigating operational losses from fiscals 2021-2022.
Market Leadership and Brand Equity
TCIL maintains a dominant position in several key segments, particularly being the leader in the forex prepaid card segment with approximately one-third of the market share. The wholesale business benefits from strong banking relationships, while the retail segment utilizes a wide distribution network. Furthermore, the group has a dominant presence across organized travel, corporate, and retail segments globally, leveraging its strong brand equity.
Financial Health and Liquidity
The financial risk profile remains comfortable. As of September 30, 2025, the adjusted gearing was low at ~0.34 time against total debt (including lease liabilities) of Rs 508 crore. Interest coverage stood at ~6.6 times for the first nine months of fiscal 2026. Liquidity is strong, evidenced by a cash and bank balance of Rs 2,346 crore at the end of February 2026, resulting in an unencumbered net cash balance of approximately Rs 771 crore.
Financial Performance Summary (Consolidated)
The key financial indicators demonstrate operational recovery and margin improvement:
- Operating Revenue: Rose to Rs 8,251 crore in FY2025 from Rs 7,405 crore in FY2024.
- Profit After Tax (PAT): Slightly decreased to Rs 258 crore in FY2025 from Rs 271 crore in FY2024.
- PAT Margin: Improved to 3.1% in FY2025 (from 3.7% in FY2024, reflecting broader segment impacts).
Key Rating Sensitivities and Outlook
Weaknesses and Risks
The group faces susceptibility to external shocks, including geopolitical risks (such as the ongoing Middle East conflict) and the persistent vulnerability of the global travel industry to pandemics or adverse events. The rating action also factors in the execution risk associated with the ongoing demerger and restructuring process.
Outlook
CRISIL maintains a Stable Outlook, believing TCIL will continue to benefit from travel demand, strong market positions, high liquidity, and cost-saving measures. Future cash generation is expected to improve over the medium term, further strengthening the financial risk profile. Any change in the support philosophy from Fairfax or significant operational degrowth would be key downward sensitivities.
Source: BSE
