Airport F&B giant set for a strong rally? Brokerage firm assigns Rs 1,600 target — Top stock to watch

Travel Food Services (TFS), the country’s largest airport food & beverage and lounge operator, has caught the attention of ICICI Securities. In a fresh note, the brokerage has initiated coverage on the stock with a ‘Buy’ rating and a target price of Rs 1,600, signalling a healthy upside from its current market price of around Rs 1,345. The optimistic view stems from rising air travel, new airports coming up over the next few years and TFS’s strong record of winning and retaining high-value contracts across major airports.

Dominant player in airport F&B and lounges

TFS is the biggest player in India’s airport F&B and lounge segment - a space that has high entry barriers and limited competition. The company controls around 26 per cent share in travel-related quick-service restaurants and nearly 45 per cent in airport lounges.

Starting with Mumbai Airport in 2009, TFS has since built a deep presence across key hubs, including Delhi, Bengaluru, Kolkata, Hyderabad, Pune and several Tier-II airports. Outside India, it operates lounges in Malaysia and Hong Kong, giving it a small but growing international footprint.

Strong foothold and high contract retention

Airport F&B is a tightly regulated business, and winning new contracts is often a lengthy process. This is where TFS scores. The company enjoys over 90 per cent contract retention, indicating strong trust from airport operators such as Adani and GMR. Recently, TFS also secured a significant new contract at Cochin Airport, further cementing its leadership.

TFS runs a mix of international franchises and in-house concepts. International brands help drive footfall, while home-grown brands ensure superior margins - a combination the brokerage believes will support long-term profitability. Its partnership with SSP Group, a global travel F&B leader across 38 countries, adds operational strength and global best practices.

Airport expansion cycle to power next phase of growth

India is set to add 30+ airports over the next three to four years, driven by rapid growth in domestic aviation. Passenger traffic is forecast to rise at 8–10 per cent CAGR, offering a structural demand boost to airport F&B.

ICICI Securities expects system-wide revenue to grow at around 21 per cent CAGR between FY25 and FY28, supported by capacity additions, new contracts and rising penetration at existing airports.

TFS operates an asset-light business with relatively low capex and round-the-clock revenue flow. The brokerage expects RoCE to remain above 25 per cent in FY26–28, aided by strong margins and efficient utilisation.

Disclaimer: The views, suggestions and recommendations expressed in this article are solely those of investment experts. Zee Business advises readers to consult their financial advisers before taking any investment decision.