International Travel House - Whats right or wrong with it?

The current market has made several stock expensive, but if we leave the top 200 stocks and go further we might getgood ideas, which have some hidden value and future potential.

Int. Travel House is one of the small cap ideas which I found interesting. I’m share my views here, but I also like to invite your views, comments,criticisms, etc.

The CMP of the stock is Rs.126 as of 14th Oct 2013 market close.

PE - 7 times, PB - 1.1

Div Yield - 2.64%

These look decent, though I’m not saying this qualifies ITHL as an attractive pick.

The company is debt free. Its larger peers (not comparable) such as Thomas Cook and Cox & Kings have Debt-Equity ratios of 0.4 and 3.1

ITHL has a strong parent ITC and it draws lot of business synergies from its parents. They have travel desks in several ITC Hotels properties

and also provide travel services, cab services, etc to the guests and customers of ITC hotels.

The company mentioned about putting in some key strategies, systems (software) to enhance its service offerings and scalability though use of technology and wide network across the country. Its still long time before it becomes a contender to Thomas cook or Cox, but given ITCs financial prowess and the ability to leverage its hotels and captive customer base, we can expect ITHL to become a strong contender in future because it is debt-free and has managed to do well across market cycles.


  • The stock is part of the periodic call auction due to low volumes. This has taken away institutional and individual interest in the stock.

    • Before PCAS regime the stock used to have decent volumes and liquidity. PCAS has also made price cheap, while earnings and dividends are more/less consistent
  • The economic slowdown will surely hit ITC hotels as well as ITHL as leisure travelling, business trips,etc may reduce but the counter argument is that some domestic holiday and normal business travel will still exist and sustain the business.

I invite SN fans to share comments, views, suggestions on whats right or whats wrong with ITHL

Disclaimer: I have personal holding in the stock.

ITC has never given it the attention similar to some of its other areas like FMCG/paperboards. As a result this subsidiary has never been aggressive in growth and is still a small company relatively.

I would wait for a positive signal from ITC for its future growth objectives before I enter in this.

Hi Strong Brick,

I agree with you that its being an ignored subsidiary. Its quite a dull, boring company in general.

I felt that this company has a lot of synergies with ITC Hotels as ITHL can offer travel services to ITC hotel customers and also refer leads and prospects to ITC Hotels. In fact this is already in-place as the travel desks of ITHL are already present in ITC Hotels but more dynamism is required to become a national player in the segment.


I came across this interview of Mr Rajiv Vij (founder of Carzonrent, India’s largest car rental company)

**Q) As more organised players are coming into the fray, how do you foresee the transformation of the car rental market from being unorganised to organised?
A.) **Ten years ago, the largest player in the car rental business barely had a fleet size of 400 cars. Still, organised segments command only 15 per cent of the total market. However, a consolidation has been happening ever since Radio Taxis forayed into the market six years ago. At the current pace of growth in the Radio Taxi segment, organised players will strengthen their hold in the next five years and command over 70 per cent of the market share. The Corporate Leasing segment is now completely handled by organised players. There are an estimated 35,000 cars in this segment in India. The number is expected to touch at least one lakh over the next five years. Self-drive is also completely serviced by organised players and has the potential to pick up as well.

It seems from this that the market is severely unorganized and so has a good scope for growth for a number of years. Also he goes on to mentioning that for a new player to enter this segment & compete will require a large investment, since the organised players have reached a decent size

I completely agree that the management does not seem very interested in the growth opportunity. Mr Vij believes that the best way forward is to have a mix of retail and corporate clientele and focus should to on providing a mix of services like radio taxi’s, specialty cars, corporates etc with a major thrust towards marketing and brand creation. Unfortunately do not see this as a part of ITHL’s strategy.

What is making me interested is the mention of this in the latest annual report

"“Phase II of the programme, which comprises of the self-booking tool would be available for the Companyâs customers towards the end of the year. Based upon this, an integrated platform for distributing the Companyâs services to retail and individual customers would bedeveloped. This would ensure that the Company continues to occupy its rightful place as a major player in the Industry and is able to exploit future growth opportunities”

Finally valuation wise company seems cheap at the moment. The lineage, debt free status and decent dividend and ROE could lead to a PE re-rating if economy and tourism revival could lead the company back to its previous growth trends

Views invited


As pointed out above, this is a very small part of the ITC group and for the last twenty years at least it hasn’t got the attention that it deserves.

This situation is not going to change going forward given the various other subsidiaries that are crying out for managerial attention.

Besides the business that it does with the other ITC subsidiaries, there is hardly any hunger seen in this company to capture market share from other avenues.

This is clearly a miss for the moment.