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Thomas Cook Demerger Targets Travel, Forex and Resorts Value
Thomas Cook (India) is best known for selling holidays, but it also runs foreign-exchange, resort and digital-imaging businesses.
These businesses have different costs, profits and types of investors.
The company wants to move its Sterling resort business into a separately listed company.
Thomas Cook shareholders would keep their existing shares and receive shares in Sterling.
Sterling had 78 resorts and 3,810 rooms at the end of FY26.
Its business may improve if more rooms are occupied and room prices rise.
The forex business is smaller than travel by revenue but earns a much higher operating margin.
The digital-imaging business has recently performed poorly, especially after lower visitor numbers in the Middle East.
The plan still needs regulatory, court and shareholder approvals, so its final outcome is uncertain.
Thomas Cook (India) plans to separate Sterling resorts from its travel, forex and digital-imaging businesses.
The board approved the demerger scheme on 20 March 2026, subject to further regulatory and shareholder approvals.
Sterling reported FY26 revenue of ₹534 crore, EBITDA of ₹175 crore and 78 resorts with 3,810 rooms.
The forex business generated ₹149 crore of FY26 EBIT from ₹326 crore of reported revenue, a 45.8% margin.
The article estimates post-demerger value of ₹121–₹155 per share, while stressing that this is not a recommendation.
- Who
- Thomas Cook (India) Limited, its subsidiary Sterling Holiday Resorts Limited, shareholders and the company’s regulators and courts.
- What
- A proposed demerger would separate Sterling’s resorts and resort-management business from Thomas Cook’s travel, forex and digital-imaging businesses.
- Where
- The businesses operate in India and internationally, while the proposed listed entities would be separated through an Indian corporate scheme of arrangement.
- When
- The board approved the scheme on 20 March 2026; management estimates completion by Q1 FY28 if remaining approvals are received.
- Why
- The company and the article argue that separating businesses with different margins, capital needs and investor bases could reduce the conglomerate discount and improve valuation.
Value-Unlock Case
Risks and Caveats
Separation rationale
Value-Unlock Case
The businesses have different margins, capital requirements and investor bases, so separate listings could allow each to be valued using more appropriate measures.
Risks and Caveats
The demerger does not guarantee a higher valuation, and the article notes that some of the anticipated re-rating may already be reflected in the share price.
Sterling’s outlook
Value-Unlock Case
Sterling is debt-free, cash-generative, has reported 25 consecutive profitable quarters and could grow through higher occupancy, room rates and new properties.
Risks and Caveats
Sterling’s EBIT was ₹129 crore in both FY25 and FY26 despite revenue growth, while expansion has increased costs and has not yet produced proportional profit growth.
Continuing business quality
Value-Unlock Case
Forex has grown strongly, with a 45.8% FY26 EBIT margin, while corporate travel also grew 19%.
Risks and Caveats
Digital Imaging’s FY26 EBIT fell to ₹11 crore and its Q1 FY27 EBIT turned negative; the travel segment also combines businesses reported on different gross and net revenue bases.
Key facts
- FY26 consolidated operating profit
- ₹428 crore
- Sterling FY26 performance
- ₹534 crore revenue, ₹175 crore EBITDA and ₹129 crore EBIT
- Sterling footprint
- 78 resorts, 65 destinations and 3,810 rooms
- Sterling balance sheet
- Debt-free, with ₹340 crore of cash at 31 March 2026
- Forex FY26 performance
- ₹326 crore reported revenue and ₹149 crore EBIT, representing a 45.8% EBIT margin
- Share entitlement
- Eligible shareholders would receive 0.81 Sterling shares for every one Thomas Cook share
- Estimated process completion
- Q1 FY28, according to management, subject to pending approvals
Quotes
Thomas Cook management
Management of Thomas Cook (India) discussing the expected demerger timetable.
“The overall timeline is estimated to reach conclusion by Q1 FY28, during which Sterling will continue to be a fully consolidated segment of the TCIL Group.”
financialexpress.com
Krishna Kumar
Chief financial officer discussing Sterling’s growth from occupancy and room-rate improvements.
“on a constant 3,810 rooms will definitely help us get the revenues up in the current financial year.”
financialexpress.com
Sources
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