Synopsis:
Jefferies initiates ‘buy’ on TBO Tek, raising its target to Rs. 1,800, citing the $125Mn Classic Vacations acquisition as a strategic move to boost presence and EPS in North America.
During Monday’s trading session, shares of one of the leading global travel distribution platforms moved up by nearly 9.4 percent to hit a nine-month high of Rs. 1,687.4 on BSE, following global brokerage firm Jefferies’ revised target price while maintaining its ‘buy’ rating.
At 02:22 p.m., the shares of TBO Tek Limited were trading in the green at Rs. 1,605.55 on BSE, up by around 4 percent, as against its previous closing price of Rs. 1,542.35, with a market cap of Rs. 17,434.3 crores. The stock has delivered negative returns of nearly 10 percent in the last one year, but has gained by over 18 percent in a month.
Brokerage Target & Outlook
Global brokerage firm Jefferies has initiated coverage on TBO Tek Limited with a ‘buy’ rating and raised the target price by 11 percent, from Rs. 1,625 to Rs. 1,800 per share, representing a potential upside of nearly 12 percent from its current price levels.
The upward revision follows TBO Tek’s recent acquisition of Classic Vacations, a US-based luxury travel company. Jefferies believes this acquisition will significantly enhance TBO Tek’s position in the premium outbound travel segment, particularly in North America.
On 3rd September, TBO announced the acquisition of US-based Classic Vacations from Phoenix-based investment firm, The Najafi Companies, for an estimated total purchase of up to $125 million. The move is expected to strengthen TBO Tek’s offerings and expand its reach in high-value travel markets.
This acquisition aligns strategically with Classic Vacations’ exclusive B2B brand and elite advisor network, built over nearly five decades of experience and market recognition. The combined strengths of both companies are likely to offer a competitive edge in serving premium travellers.
Jefferies highlighted the acquisition as a key element of TBO Tek’s roll-up strategy, wherein a singular entity, investor or company combines several small, fragmented companies in the same industry and turns them into a larger entity. Brokerage believes that this approach is being applied in incubated markets to scale operations and enhance market penetration.
Classic Vacations, a luxury travel provider with over 10,000 advisors in the US, serves both B2B and B2C segments. Jefferies believes the acquisition will not only bolster TBO Tek’s presence in North America’s premium travel market but also drive operational synergies. Additionally, the brokerage forecasts that this acquisition could contribute to an Earnings Per Share (EPS) growth of 2-6 percent from FY25 to FY28.
Financials & More
TBO Tek reported a significant growth in revenue from operations, experiencing a year-on-year rise of nearly 22 percent, from Rs. 418 crores in Q1 FY25 to Rs. 511 crores in Q1 FY26. Likewise, the company’s net profit increased during the same period from Rs. 61 crores to Rs. 63 crores, representing a marginal rise of nearly 3.3 percent YoY.
TBO Tek Limited is primarily engaged in the business of operating multiple online technology platforms (TBO Portals), providing its customers access to book global travel inventory aggregated through travel suppliers like airlines, hotels, etc.
The company leverages technology to simplify the demands of the complex world of global travel by connecting over 1.59 lakh travel buyers and 1 million travel suppliers at scale of over 100 countries.
Written by Shivani Singh
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