Fairbridge-controlled Thomas Cook India now derives majority of revenues from HR services

Travel services firm Thomas Cook (India) Ltd saw its net profit inch up to Rs 32.5 crore for the quarter ended June 30, 2013 compared with Rs 31 crore in the year-ago period, even as its total revenues more than doubled after it consolidated the financials of Ikya Human Capital last quarter. This was partly responsible for a close to four-fold rise in personnel costs of the firm during the quarter.

Total revenue stood at Rs 306.3 crore in Q1 FY14 compared with Rs 137.13 crore in Q1 FY13. This growth was spurred with addition of revenue from Ikya acquired by Thomas Cook (India) earlier this year. The firm had acquired majority stake in the HR services firm and consolidated its financials from May 14, 2013. It picked around 74 per cent of Ikya, bulk of it through shares purchased from India Equity Partners besides fresh cash infusion.

The HR services practice comprised a little over half of the total revenue clocked by the company. The deal derisked the business of the firm which was till now a travel services-focused company, a sector facing growth challenges with the economic slowdown. The firm’s travel services business, however, still generates bulk of its earnings.

Revenue break-up

With the addition of Ikya business, the company reported revenues from three core businesses—financial services, travel & related services and human resources services.

Thomas Cook (India) reported 11 per cent growth in revenue from travel services unit to Rs 132.9 crore in Q1 FY14 compared with Rs 118.9 crore in Q1 FY13. It, however, brought in over four-fifth of the total profit before interest expense and tax.

The revenue from financial services, which essentially is company’s foreign exchange business, declined by over 40 per cent in Q1 FY14 to Rs 10.6 crore compared with Rs 18.14 crore in the year-ago period.

The major boost in revenue this year came with addition of revenue of Ikya business which brought in Rs 162.74 crore in Q1 FY14, making up to 53 per cent of the total revenue of the company. However, the HR services business added only Rs 6.9 crore to earnings during the quarter.

(Edited by Joby Puthuparampil Johnson)

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