Travel & Tourism – Jul-Sep’26 Earnings Preview – Steady stays, turbulent skies
Published on 08 Oct 2026
The travel & tourism sector is likely to witness a mixed 2QFY27E with steady hospitality performance offset by weaker aviation demand and continued raw material inflation in luggage sector. Domestic aviation traffic declined 4.8%/6.3% YoY in Jul/Aug’26, while IndiGo’s load factor fell ~170bps/~540bps YoY indicating softer demand environment. Amid subdued air traffic, elevated crude prices and high forex volatility we expect INDIGO IN to report an adjusted loss of INR981mn. In the luggage segment, elevated prices of PP, PC, nylon and polyester are likely to weigh on margins despite 4–6% price hikes taken in May’26, leading to earnings pressure for VIP IN/SII IN. In contrast, the hospitality sector is expected to deliver modest operating performance, supported by sustained ARR growth and healthy occupancy while IRCTC is likely to benefit from robust catering and ticketing volumes. We expect earnings to remain resilient for hotels and IRCTC IN, while aviation and luggage space is likely to face near-term margin headwinds. SAMHI IN and SII IN remain our top picks in the travel & tourism space.
