1. Travel King
Cox & Kings
Initiating Coverage | 11 August 2014
Sector: Travel & Tourism
Niket Shah (Niket.Shah@MotilalOswal.com); +91 22 3982 5426
Sagar Shah (Sagark@MotilalOswal.com)+91 22 3312 4958

2. Cox and Kings
11 August 2014 2
Cox and Kings: Travel King
Page No.
Summary ........................................................................................................ 3-4
Company description..................................................................................... 5-6
Indian operations go from strength to strength ......................................... 7-9
PGL+NST (Education) - Touching lives of students .................................. 10-16
Meininger - tapping twin opportunities .................................................. 16-18
International leisure operations .....................................................................19
Financial outlook ....................................................................................... 20-21
Key risks............................................................................................................ 22
Key management team ...................................................................................23
Annexure: Industry overview ................................................................... 24-28
Financials and valuations .......................................................................... 29-30
Investors are advised to refer through disclosures made at the end of the Research Report.

3. Cox & Kings
CMP: INR260 TP:INR360 Buy
11 August 2014
Initiating Coverage | Sector: Travel & Tourism
BSE SENSEX S&P CNX
25,519 7,626
3
Stock performance (1 year)
Shareholding pattern (%)
As on Jun-14 Mar-14 Jun-13
Promoters 59.5 59.5 59.4
FII 19.9 19.3 15.4
DII 4.9 5.3 7.6
Others 15.7 16.0 17.7
FII Includes depository receipts
Bloomberg COXK IN
Equity Shares (m) 136.5
M.Cap. (INR b)/(USD b) 35.5/0.6
52-Week Range (INR) 282/65
1,6,12 Rel. Perf. (%) 8/64/126
Financial summary (INR b)
Y/E March 2015E 2016E 2017E
Sales 21.3 24.0 27.1
EBITDA 8.2 9.3 10.6
NP 2.6 3.5 4.3
EPS (INR) 19.1 25.7 31.7
EPS Gr. (%) 2.0 34.9 23.4
BV/Sh. (INR) 146.4 171.0 201.5
RoE (%) 13.9 16.2 17.0
RoCE (%) 10.6 12.9 14.5
Valuations
P/E (x) 13.6 10.1 8.2
P/BV (x) 1.8 1.5 1.3
EV/EBITDA (x) 8.6 7.2 5.9
EV/Sales (x) 3.3 2.8 2.3
Travel King
Increase capacity utilization and improved penetration to drive growth
 Cox enjoys 30% market share in outbound travel market with 20-22% gross margins
which is best in the industry.
 Education segment is expected to grow at ~14% over FY15-17E driven by opening of
new centre in Australia and improved capacity utilization in PGL (Peter Gordan
Lawrence) and improvement in UK economy to drive growth in NST (Northern School
Travel).
 We expect Meininger to grow at 15% over FY15-17E driven by new properties opening
in Paris, London, Amsterdam and other parts of European cities.
 Sale of camping business and FCF generation over the next two years to reduce debt-
equity from 2.4x in FY14 to 1x in FY17E. This complemented by healthy return ratios
warrant a re-rating, in our view.
 The stock trades at 13.6x FY15E and 10.1x FY16E earnings. We value COXK at 14x
FY16E earnings of INR25.7 with a target price of INR360. Initiate coverage with a Buy
rating.
Strong brand equity , tier2 and 3 cities to drive growth
Cox and Kings Ltd (COXK) is a 250-year-old brand in the global travel and tourism
industry and enjoys 30% market share in outbound travel market, which stands
at USD5b. Due to its size and brand, company enjoys a gross margin of ~20-22% in
outbound segment, compared to competitors like Thomas Cook of 12% and
smaller players of ~8-9%. COXK has 12 owned centers and also operates through
156 franchisees across 110 cities in the country, which contribute 50% of the total
retail business. Currently, company derives ~40% of the revenue from Tier 2 and
3 cities, which was 20-25% in FY08. Management plans to add 10-15 franchisees
every year, which will further drive growth from Tier 2 and 3 cities.
Improve capacity utilization in Education business to drive growth
PGL provides residential outdoor tours for students in the age group of 8-12
years across schools in the UK, while NST is an education group tour for students
in secondary school and targeted at the age group of 11-16 having 60 courses
covering history, Science, Maths, arts, music etc. We expect education segment
(PGL+NST) to grow at ~14% CAGR over FY15-17 driven by 1) Shift from LEA (Local
Education Authorities) customers to PGL due to its world class infrastructure
coupled with high safety standards. 2) Current capacity utilization of ~60% is set
to improve as PGL has started to offer its centers to families, English speaking
classes, national citizenship program etc during weekends and lean holiday
season which should drive growth and profitability 3) PGL made its first-ever
expansion in Australia (which it saw in the UK 15 years ago) by investing AUD4.5m
to open an 200-acre center with a capacity of 350 beds 4) Improvement in UK
geography to lead to higher share of long hauls which will drive growth in NST.

4. Cox and Kings
11 August 2014 4
Meininger'splansaggressivepropertyadditions,entryintonewermarkets
Meininger has 16 properties, 7,340 beds spread across 2,092 rooms, with beds per
room varying from 2-8 rooms depending on the category. Meininger has ~70% bed
capacity utilization and ~90% room capacity utilization by providing clean, affordable
bed and breakfast accommodation. Around 50% of the revenue is derived by selling
it to schools including PGL and NST and balance 50% by selling it to outsiders like
families etc. Management is planning to open new properties in Paris, London and
Amsterdam where it does not have any presence which will improve penetration
and drive growth.
ImprovedpenetrationbySuperbreaktodriveinternationalleisuregrowth
Superbreak provides integrated solution and complete holiday packages
contributing 30% of international leisure business. Prior to HBR (Holidaybreak)
acquisition, Superbreak concentrated only in the UK which it has enhanced by
providing packaged holidays to other European destinations (by adding rail & flight
connectivity and European hotels), supplemented with a refreshed IT platform,
leveraging on existing C&K group operations. B2C Direct business (Online+Phone)
booking now forms 30% of Superbreak revenue which is expected to improve further
driving profitability.
Valuation and view
With the recent sale of camping business, we believe COXK is on the path of de-
leveraging its balance sheet with the net debt/equity expected to reduce from
2.4x in FY14 to 1x in FY17E. We believe that COXK has a balanced portfolio now both
in India and International business across categories, which is synergetic to post
~30% PAT CAGR over FY15E-17E. The stock trades at 13.6x FY15E and 10.1x FY16E
earnings. We value COXK at 14x FY16E earnings of INR25.7, with a Buy rating and
target price of INR360.

5. Cox & Kings
11 August 2014 5
Company description
Cox & Kings is the longest established travel company in the world. Its distinguished
history began in 1758 when it was appointed as general agents to the regiment of
Foot Guards in India under the command of Lord Ligonier. Today, Cox & Kings is a
premium brand in all travel related services in the Indian subcontinent, employing
over 5000 trained professionals.
Its India operations are headquartered in Mumbai and have the status of a limited
company. It has over 12 fully owned offices in India across key cities such as New
Delhi, Chennai, Bangalore, Kolkata, Ahmedabad, Kochi, Hyderabad, Pune, Goa,
Nagpur and Jaipur. The worldwide offices are located in UK, USA, Japan, Russia,
Singapore and Dubai. It has associate offices in Germany, Italy, Spain, South Africa,
Sweden and Australia.
In September 2011, COXK acquired Holidaybreak (HBR) as a part of its international
operations. HBR is a leading tour operator in Europe focusing on niche categories
like education, adventure and camping. The deal was closed at an equity
consideration of GBP312m (~INR23.4b), valuing the total HBR enterprise at
GBP442m (~INR33.1b). The transaction implied a valuation of 7x FY11 EV/EBITDA for
HBR.
Snapshot of Cox and Kings corporate structure
Source: Company, MOSL
Cox & Kings Limited
Quoprro
Global
Ltd, U.K
Cox &
Kings
Gmbh,
Germany
Quoprro
Global
Services
(P) Ltd,
India
Cox & Kings (
Australia) Pty
Ltd,
Australia
Clearmine Ltd
U.K
Cox & Kings
Tours LLC,
Dubai
Cox & Kings
Singapore Pvt
Ltd
Signapore
Cox & Kings
(UK ) Ltd
UK
Cox &
Kings Asia
Pacific Pvt
Ltd,
Hongkong
Prometheon
Holdings Pvt
Ltd, Mauritius
Tempo
Holidays
Pty Ltd,
Australia
MyPlanet
Australia
Pty Ltd/
Bentours,
Australia
Tempo
Holidays
NZ Ltd,
New
Zealand
Cox & Kings
Destinations
Management
Services Ltd
UK
Quoprro
Global
Services Pte.
Ltd,
Singapore
East India
Travel
Company
Inc, USA
Quoprro
Global
Services
Hongkong
Cox and Kings
( Japan)
LtdJapan
Prometheon
Holdings Ltd, UK
Cox & Kings
Global
Services Pvt.
Ltd, India
Cox & Kings
Global
Services LLC,
Dubai
Quporro
Global
Hellas,
Greece
Cox and Kings
Global
Services
(Singapore)
Pte.Ltd,
Singapore
Prometheon
Holdings (UK)
LimitedCox and Kings
Global
Services
Mgmt
(Singapore)
Pte.Ltd,
Singapore
Holidaybreak
Limited, UK
Cox & Kings
Travel Ltd
UK
Prometheon
Enterprise
LimitedUK
Cox & Kings
destination
management ,
Singapore

6. Cox & Kings
11 August 2014 6
Summary of leisure business
Country Business Description
India
COXK sell holidays under “Cox & Kings” brand and its various sub brands - “Duniya Dekho”, “Bharat Dekho”, “Luxury
Escapades”, “Anand Yatra”, “Gaurav Yatra”
Europe
COXK sell premium long haul cultural holidays under the “Cox & Kings” brand and adventure holidays around the world under
“Explore” and “Edge” brands in the UK market. COXK also offer weekend breaks into UK and other European destinations
under “Superbreak” brand and ground handling into Europe under “CKDMS” brand. COXK offer Hotels & Bungalow bookings
under the online brands of “Bookit” in Netherlands
Australia
COXK offering includes outbound holidays in the mid-market segment under the “Tempo” brand, premium holidays under the
“Cox & Kings” brand and specialist Scandinavian holiday operations under “BenTours” brand
US COXK sell premium long haul holidays under the “Cox & Kings” brand
Dubai
COXK operate under the “Cox & Kings” brand, handling both inbound and outbound traffic, catering to the mid-market
segment
Japan COXK sell package holidays under white label to various retail travel agents
Source: Company, MOSL
Leisure International and Education business are major contributors of revenue
Source: Company, MOSL
35%
21% 18% 22% 23% 23%
33%
34% 27%
32% 30% 29%
32%
27%
24%
29% 30% 30%
14%
17% 17% 17%18% 17%
FY12 FY13 FY14 FY15E FY16E FY17E
Leisure India Leisure International Education(PGL + NST) Meininger Camping

7. Cox & Kings
11 August 2014 7
Indian operations go from strength to strength
Tier 2, Tier 3 cities to turn the story around
 COXK is a largest player in domestic outbound travel market enjoying 30% market
share with industry highest gross margins of ~20-22%.
 India operations are largely driven by retail customers who contribute 70% and the
balance 30% is by corporate customers.
 COXK has 12 owned centers and also operates through 156 franchisees across 110
cities in India which contributes 50% of total domestic retail revenues. It plans to add
10-15 franchisees every year which will drive growth.
 Cox derives ~40% of the revenue from Tier 2 and 3 cities; which is likely to increase
further going forward.
Strong brand equity with market leadership position
Tour operator industry depends on brand awareness & recall and service it offers to
generate a loyal customer base. A satisfied customer tends to repeat travel through
the same operator. COXK is a 250-year-old brand in the travel and tourism industry
and enjoys 30% market share in outbound travel market which stands at USD5b. The
size and brand, enable it to charge a premium pricing leading to a higher gross
margin (20-22%) in outbound segment compared to other small players (~8-9%
margins). We believe COXK’s international presence brings significant value
proposition as they understand international tourist markets and also offer lower
cost to consumers, compared to peers, due to size of operations.
One stop solution with varied brands for each holiday
COXK is a one-stop-shop for all travel requirements such as visa, ticketing, holidays,
insurance, and foreign exchange. It constantly innovated by launching customized
brands namely Duniya Dekho for outbound holidays, Bharat Dekho for domestic
holidays, Flexiho for tailor-made holidays, Gaurav Yatra - targeted at Gujarati
community providing Jain food, Amhi Travelers - for Maharashtrian community with
food specification.
Corporate bookings aid in economies of scale
Corporate bookings revenue contributes 30% to India revenues of which MICE
contribute 2/3rd
and balance 1/3rd
revenues comes from forex and ticketing. MICE
enjoys 15-16% margins while margins in ticketing and forex are at 1.2-1.5%. A higher
growth in corporate bookings enables COXK to increase the business volumes, which
in turn will give better bargaining power to make bulk bookings for air travel, hotel
accommodations, car rentals and ground handling. This will also enable it to offer
competitive packages to customers, thus attracting traffic in the long run.
In FY14, due to poor corporate liquidity and economic conditions, corporate MICE
business was subdued. COXK also witnessed increase in working capital by INR 2.4bn
YoY to INR 6.5bn in FY14. While COXK introduced a corporate card with banks last
year to reduce the working capital, the card acceptance has not picked up due to
stressed economic conditions. Also, since last year, flight ticketing credit cycle has
been reduced to a weekly payment instead of monthly, thereby accelerating the
working capital requirement. However, with improvement in environment expected
Due to size and brand, it
enjoys gross margin of
20-22% in outbound
segment compared to other
small players which have
~8-9% margins

8. Cox & Kings
11 August 2014 8
going forward we believe that growth will come back complimented by reduction in
working capital.
Expansion of franchisees in Tier 2 and 3 cities to drive outbound and
domestic growth
India operations are largely driven by retail customers who contribute 70% and the
balance 30% is by corporate customers. Within retail segment, 70% is group booking
and 30% is individual booking. Outbound travel is the largest contributor (50%) of
total Indian operations in the retail segment. Management believes growth in
leisure retail business will be driven by the following:
i) Increased penetration across Tier I cities and smaller towns due to deeper
distribution network.
ii) Increased market share for organized tour operators, as customers move
away from the unorganized travel agency segment.
iii) Repeat business from existing customers as they travel frequently
compared to the past.
Growth in the leisure business needs to be backed by a strong distribution network,
which is the key strength for tourism business. COXK has 12 owned centers and also
operates through 155 franchisees across 110 cities in India, with a strong presence
in Tier 2 and 3 cities, compared to competition. It derives ~40% of the revenue from
Tier 2 and 3 cities. Management expects to derive further growth from Tier 2 and 3
cities. With increase in growth the bargaining power for Cox is expected to increase
going forward thereby leading to improvement in gross margins going forward.
Franchisees account for ~50% of total retail business. Company plans to add 10-15
franchisees each year, going forward. Over the last three years, it did not open any
owned shop and growth was driven by the franchisee model. COXK has a asset light
model for its franchisee network. Investment in land and furniture is done by the
franchisees. Each franchisee owner is also required to make a deposit depending on
his/her location (INR2.5m for metros and INR1.5m for Tier 2 and 3 cities). COXK
provides marketing material such as banners, posters, etc. COXK also provides a
manager and accountant, who are on its payroll. There is no difference in the selling
price between a franchisee and company-owned outlet, thus avoiding conflict of
interest. Franchisees’ systems are integrated with the head office and bookings can
be done on a real-time basis, without depending on the head office.
Franchisee addition to drive growth
Source: Company, MOSL
Franchisee share in retail revenues set to increase
Source: Company, MOSL
56
94
150 153 155 155 165 175 185
FY09 FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E
Number of Franchisee
Franchisee
, 50%
Ownstore
andother
outlet , 50%
Retail revenues breakup for FY14
India operations are largely
driven by retail customers
who contribute 70% and
the balance 30% is by
corporate customers
Management expects to
derive further growth from
Tier 2 and 3 cities
Franchisees account for
~50% of total retail
business. Company plans to
add 10-15 franchisees each
year, going forward

9. Cox & Kings
11 August 2014 9
Shift from unorganized to organized market will lead to huge opportunity
Travel and tourism industry in India is a highly unorganized market, with many small
operators having a small share in the pie. There are 25,000 independent agents and
5,000 regional players in the travel sector. We expect in FY15E, 80% of the industry
will be unorganized and 20% to be organized. COXK is the largest among organized
players, with key competitors being Thomas Cook, Kuoni and regional players like
Kesari Tours and Heena Tours. While most of the smaller players are restricted to
local presence, COXK is present across Pan India, which gives it an edge over its
competitors. Being the largest player, company has huge bargaining power in hotel
bookings, airlines, transportation and logistics. We believe given the increase in size,
COXK is well placed to capture shift from unorganized to organized play.
Largely unorganized market…
Source: Company, MOSL
…expected to move towards organized players
Source: Company, MOSL
Unorganise
d, 87%
Organised,
9%
C&K, 4%
Market Share FY12
Unorganise
d, 80%
Organised,
13%
C&K, 7%
Market Share FY15E
COXK is the largest among
organized players, with
competitors being Thomas
Cook, Kuoni and regional
players like Kesari Tours and
Heena Tours etc

10. Cox & Kings
11 August 2014 10
PGL+NST (Education) - Touching lives of students
Market leaders in educational tours
 PGL is a 50 year old brand in UK, with 70% of its customers being repeats, which is a
testimony of brand popularity.
 PGL provides residential outdoor tours for students in the age group of 8-12 years
across schools in the UK which forms part of the curriculum.
 Post acquisition, management focused on profitability by closing down two loss-
making centers and thereby increasing utilization rates marginally each year.
 In the UK, 50% of students go to centres run by Local Education Authorities (LEA) and
balance 50% are serviced by private players, where PGL dominates the market with
60% share followed by Kingswood with less than 30% market share.
 LEA center has 100-200 beds/center compared to PGL’s 300-400 beds, which makes it
a right choice for large schools.
 PGL made its first-ever expansion in Australia (which it saw in the UK 15 years ago) by
investing AUD4.5m to open an 200-acre center with a capacity of 350 beds.
 NST is an education group tour for students in secondary school and targeted at the
age group of 11-16 with 32% market share in UK. Improvement in UK economy is
expected to drive growth for NST.
 Cox recently sold its Camping division to Homair Vacances, for all-cash consideration
of GBP89.2m (~INR8.8b) which will be used to retire debt.
Holidaybreak acquisition - a significant step in right direction
COXK acquired Holidaybreak (HBR) in September 2011 which is a leading travel and
tour operator in Europe focusing on niche categories like education, adventure and
camping tours. The deal was closed at an equity consideration of GBP312m
(~INR23.4b), valuing the total HBR enterprise at GBP442m (~INR33.1b). The deal was
financed by raising debt of USD330m in overseas SPV. The transaction implied a
valuation of 7x FY11 EV/EBITDA for HBR. We believe the acquisition has bought
synergies in economies of scale, hedge to Indian operations, diversification of
revenue and access to newer markets. The complementary nature of two businesses
will diversify COXK’s revenue stream, both on a product and geographical basis.
Product portfolio
Segment Key brand Product description
Education PGL Leading provider of residential outdoor trips, providing curriculum-based activity tours to about 300k
students aged 8-12 from across 5000 schools in UK.
NST Market Leader providing educational travel tours for schools and colleges in UK and Ireland.
Meininger Hostel for young urban travellers offering superior amenities & service standards at affordable prices
Adventure Explore Explore is the adventure holiday offering to primarilry UK customers. Customer has an option to choose
from 130 countries.
Regaldive Regaldive offers specialised scuba diving and it is 2nd largest operator in UK
Online Booking Super break SuperBreak has been a short break specialist for over 30 years. From theatre tickets to sightseeing and
events around the UK and overseas Super break provide the entire package for a unique and
unforgettable short break
Bookit Its an online short break booking platform
Source: Company, MOSL

11. Cox & Kings
11 August 2014 11
Product portfolio for education business
Source: Company, MOSL
PGL: A cash cow and growing business
PGL is operating since the last 50 years and it was acquired by HBR in June 2007. PGL
provides residential outdoor tours for students in the age group of 8-12 years across
schools in the UK. It is a curriculum-based tour with state-of-art infrastructure and
high safety standards. These centers are equipped with facilities including student
accommodation, indoor classrooms, meeting rooms, conference halls, swimming
pools, football pitches and activity areas. The activities are curriculum based, focus
on personality development, and conducted by professional and qualified staff from
government accredited centers. The trips are conducted during school terms,
typically from March to October.
It offers four to five-day trips to private primary schools across the UK, with
curriculum based agenda and activities for kids. Company is focusing on
consolidating its market leadership position in the UK school market, which
witnessed better-than-industry growth.
Various activities for kids in PGL
Source: Company, MOSL Source: Company, MOSL
PGL is operating since the
last 50 years and it was
acquired by HBR in
June 2007

12. Cox & Kings
11 August 2014 12
Source: Company, MOSL Source: Company, MOSL
What changed in PGL post acquisition
Post PGL’s acquisition by COXK, management focused on efficiency and profitability
of the center. PGL closed down two loss-making centers and focused on increasing
capacity in own beds, compared to leased beds. Management has been able to
increase the occupancy by 1% annually, from 57% in FY11 to 60% in FY14.
Strong brand set for market share gain
Management believes through its world class infrastructure coupled with high safety
standards and superior customer experience, it will be able to pull Local Education
Authorities’ (LEA) customers. LEA operates ~230 centers in UK, compared to PGL’s
16 centres, thus leaving a huge opportunity to gain market share. PGL has a land
bank of >1,000 acres, which we believe can be used for expansion of more beds
without any meaningful capex.
Flexi pricing to cater to larger schools
PGL has adopted a flexi pricing strategy of GBP100-300 per week depending on the
category of seasons, thus ensuring higher utilization. Currently, it services ~5,500
schools across UK and its presence across multiple price points ensures services to
both small and large schools. We believe its presence in the lower end of pricing
point will complement the strategy of attracting LEA customers.
Shortage of schools in UK – Structural driver for long term growth
The Local Government Association has guided that two-thirds of England’s school
districts are expected to have more primary pupils than centers within three years.
The LGA's analysis of local authority data on school-place needs suggests about
1,000 of the 2,277 local school planning districts will run out of capacity by 2015-16.
We believe that this will lead to increase in students per class as well as addition of
newer schools which will provide long term visibility to PGL and NST businesses.
Management believes
through its world class
infrastructure coupled with
high safety standards, it will
be able to convert LEA
customers as its own due to
inferior quality of
infrastructure offered by
LEA centers

13. Cox & Kings
11 August 2014 13
Better utilization in lean season to improve PGL profitability
PGL operates 23 centers spread across 50-250 acres in the UK, France and Spain. Of
these, 16 centers are owned and the rest being leased. Of the total ~8,900 beds,
1,500 beds are leased and the balance 7,400 being owned. Education business is a
highly seasonal; with ~70% of revenue being derived from 1Q and 2Q, and balance
quarters are relatively lull due to extreme climatic conditions. Centers remain shut
for a period of two months every year. During 1Q and 2Q weekdays sees ~90%
capacity utilization while weekends have lower capacity utilization. The current
blended capacity utilization stands at c.60% during the business season.
Management is focusing on increasing the utilization by targeting more non-school
revenues. Specifically, by
1) Offering centre’s to families, training bodies, football coaching etc on
weekends and during holidays.
2) Undertaking English language coaching to foreign students which is approved
by the British council. Normally the duration of coaching is around 2-6 weeks.
3) Recent initiating of national citizenship program by the UK government during
the holiday period.
Management has guided for INR 500mn as growth capex while INR 400-500mn for
maintenance capex with negligible working capital requirement. Management
expects the education business (NST+PGL) to grow at 10-15% going forward.
Revenue mix in Education business between PGL and NST remained at 75:25 for
FY14.
Total number of beds in PGL trend
Source: Company, MOSL
Expansion in Australia, India to drive long term growth
As a part of its global expansion plan, in 4QFY14, PGL made its first-ever expansion
in Australia by investing AUD4.5m. Australia has a concept similar to its UK business
called “Learning outside Classroom”. The center is spread over 200 acres and has a
capacity of 350 beds. Management believes that Australia has huge potential to
scale up its business (which it saw in the UK 15 years ago). We believe this plan will
be earnings accretive and boost its strategic expansion. It is also looking for a similar
expansion in India which, while delayed, remains a strategic market for PGL.
8,150 8,150 8,900 9,790 10,867
12,171
FY12 FY13 FY14 FY15E FY16E FY17E
Total number of beds
PGL operates 23 centers
spread across 50-250 acres
in the UK, France and Spain.
Of these, 16 centers are
owned and the rest
being leased
The Australian center is
spread over 200 acres and
has a capacity of 350 beds.
Management believes that
Australia has huge potential
to scale up its business

14. Cox & Kings
11 August 2014 14
Snapshot of selected PGL centers
Sr
no
Name of the
Site
Region/City
Capacity
(beds)
Area
(acres)
Description
1
Boreatton
Park
Shropshire 1,021 250
Mansion house; lodges and tented village for accommodation. Indoor pool and 2
indoor sports halls; 20 foot sandstone wall for abseiling; lakes.
Numerous activities including high ropes; quad biking; canoeing; initiative exercises
2
Campaspe
Downs
Victoria, Aus 350 200
Facilities include 18 different activities, Sport Hall, Indoor pool, classrooms & teacher
meeting lounge
3 Liddington Wiltshire 1,000 150
Former conference centre; netball courts & football pitches; lake; woodland. 22
activities including crate and vertical challenges
4 Dalguise Perthshire 475 50
Craigvinean Lodge; 18th century mansion house; close to Loch Tay; woodland
environment; sports dome. 23 activities including orienteering; quad biking;
kayaking
5
Winmarleigh
Hall
Lancashire 308 50
Mansion house and lodges; onsite lake; woodland environment. 19 activities
including raft building; bouldering wall
6
Caythorpe
Court
Lincolnshire 790 65
Purpose built lake; mansion house / lodges; tent villages. 21 activities including high
ropes; canoeing; trapeze
7 Barton Hall Devon 711 46
Accommodation in main house and lodges; outdoor heated swimming pool; lake; dry
ski slope; classrooms and ICT suites. 19 activities including fencing and crate
challenge
8
Osmington
Bay
Dorset 804 45
Accommodation in lodges; located by the sea with private beach; watersports at
Weymouth Olympic Centre; sports hall. 24 activities including tunnel trail. Pond
dipping lake used by Field Studies groups
9 Little Canada Isle of Wight 722 48
Accommodation in log cabins or Woodlands House; both sleep up to 8. Indoor
heated swimming pool; 28 activities including a challenge course and dragon boating
10 Windmill Hill East Sussex 462 21
Main house and accommodation lodges; sports hall (2k sqm); outdoor heated
swimming pool. 19 activities including initiative exercises and archery. Optional day
trip to France available
Source: Company, MOSL
NST: Higher share of long hauls to drive growth and profitability
NST is an education group tour for students in secondary school and targeted at the
age group of 11-16 having 60 courses covering history, science, maths, arts, music,
etc. NST was acquired by Holidaybreak in September 2007. It offers domestic and
international education group tours for students across schools and colleges in the
UK and Ireland. It has a strong market share of 32%, a testimony of relationships
with schools and colleges in the UK. NST carries over 100,000 students each year
with tours organized to several domestic and overseas destinations, typically for five
days. Improvement in UK economy is likely to further benefit the growth of this
business.
Education (PGL+NST) Revenue growth trend
Source: Company, MOSL
4,906 5,539 6,257
7,131 8,197
13% 13%
14%
15%
FY13 FY14 FY15E FY16E FY17E
Total Education revenue (INR m) YoY Growth
NST is an education group
tour for students in
secondary school and
targeted at the age group
of 11-16.

15. Cox & Kings
11 August 2014 15
EST business - a niche segment
EST provides educational tours for higher education students. It specializes in study
visits and student conferences for students aged over 16. Travelplus provides
accommodations for UK/German students seeking gap-year placements. With EST,
COXK completes its portfolio by catering to students across all age groups.
Camping business sale: a step in right direction
Camping business was a part of HBR, which was acquired by COXK in September
2011. It provided premium camping holidays to customers in the UK through two
brands, Eurocamp and Keycamp, which were market leaders in the region. These
facilities were spread across popular camping destinations like France, Italy, Spain
and other countries in Europe including Switzerland, Austria, Germany, Croatia and
Portugal. COXK provides a wide range of accommodation choices, ranging from
basic one-room mobile homes to three-room luxury chalets stylish safari tents.
These brands enjoy No.1 position in the UK with 60% market share and No.2 and 3
positions in the Netherlands and Germany, respectively. For the period ended FY14,
Camping business contributed revenue of INR3.92b (17% of the total revenue) and
EBITDA of INR1.6b (18% of the total EBITDA). COXK owned ~8,500 accommodation
sites (including 7,128 mobile homes). With each mobile home costing ~GBP15,000-
20,000 (useful life of 12 years), it is a relatively capital intensive business.
On June 2, 2014, C&K Group announced the sale of its Camping division to Homair
Vacances, a French leader in the camping market. The deal was valued at all-cash
consideration of GBP89.2m (~INR8.8b). Company would use the proceeds to retire a
portion of its INR42b debt before maturity. FY14 net debt/equity ratio (pro forma
for camping sale) improved from 2.4x to 2x, and a reducing debt will lead to
annualized interest cost savings of £4m. We believe Camping business’ sale is a step
in the right direction as it required huge capital expenditure and consumed free cash
flows of the business. However, it’s important to note that Cox generated around
GBP15mn of free cash flows in last 2 years before selling the asset. Thus, COXK has
aligned its focus on two main businesses —education and leisure.
On June 2, 2014, C&K Group
announced the sale of its
Camping division to Homair
Vacances, a French leader
in the mobile home market.
Deal was valued at all-cash
consideration of GBP89.2m
(~INR8.8b)

16. Cox & Kings
11 August 2014 16
Meininger – tapping twin opportunities
Penetration into newer markets through asset light model
 Meininger has 7,340 beds spread across 2,092 rooms, with beds per room varying
from 2-8 depending on the category. It enjoys 70% bed capacity utilization and 90%
room capacity utilisaiton.
 All properties are on leased basis, thus reducing stress on balance sheet and making it
an asset light model.
 With presence already in 10 cities in Europe, management is planning to open new
properties in Paris, London and Amsterdam, where it does not have a presence which
will drive growth.
 Around 50% of the revenue is derived by selling it to schools including PGL and NST
and balance 50% by selling it to outsiders like families etc.
 We believe with the presence in newer cities and higher utilization of current
properties, it will be able to achieve growth of 15%, going forward.
An asset light model complements its primary business
In November 2010, HBR acquired 50% stake in Meininger, with the option to
purchase remaining shares. The second tranche of 24% was acquired in April 2012.
The final disposal of 26% shares was acquired in April 2013, thus making Meininger a
wholly-owned subsidiary of HBR. With COXK acquiring HBR, Meininger became its
wholly-owned subsidiary.
Meininger is a preferred accommodation provider across Europe. It generates
revenue from two categories of customers:
a. Group segment: Typically, B2B business which targets school tour operators.
b. Leisure clients/business clients/backpackers/youth travelers: Booking is done
mostly through websites - hotelbookings.com, hostelbooking.com, etc.
It is typically a hostel for young urban travelers offering superior amenities and
service standards at affordable prices. Hotel is used by groups, including student
tours by NST, individual travelers, business men, families and backpackers, thus
complementing its primary NST business. All the properties are operated on long
term lease basis, thus reducing stress on the balance sheet and keeping the business
model asset light. Any further growth will require low capex.
Expansion into newer markets to ensure sustained growth
Meininger offers clean, affordable bed and breakfast accommodation in the heart of
a city. The cost effective value proposition opened market for families and corporate
travelers alike. It has 7,340 beds spread across 2,092 rooms, with beds per room
varying from 2-8 depending on the category. Meininger enjoys 70% bed capacity
utilization and 90% room capacity utilization. It faces competition from hostel
providers like Generator Hostel and A&O. However, with its strong relations with
school tour operators and prime location of properties, it has an edge over
competitors, in our view. It has a presence in 10 cities in Europe. Management is
planning to open new properties in Paris, London and Amsterdam where Meininger
does not have any presence. Thus, we believe that with a presence in newer cities
and higher utilization of current properties, Meininger will be able to achieve a
growth of 15% going forward.
All the properties are
operated on long term
lease basis, thus reducing
stress on the balance sheet
and keeping the business
model asset light. Any
further growth will require
low capex
Meininger has 7,340 beds
spread across 2,092 rooms,
with beds per room varying
from 2-8 depending on the
category. Meininger enjoys
70% bed capacity utilization
and 90% room capacity
utilization

17. Cox & Kings
11 August 2014 17
Meininger bed capacity on the rise
Source: Company, MOSL
Revenue growth trend
Source: Company, MOSL
Meininger’s location and bed capacity
Sr no Site Location Country Opening No. of rooms No. of beds
1 Munich Germany Sep-04 94 447
2 Cologne Germany May-06 52 184
3 London UK Oct-06 47 256
4 Vienna City Austria Sep-07 68 299
5 Berlin Prenzlauer Berg Germany Apr-08 90 328
6 Hamburg Germany Apr-09 116 589
7 Berlin Central Station Germany Oct-09 296 848
8 Frankfurt Germany Apr-10 163 387
9 Salzburg Austria May-11 101 426
10 Berlin Oranienburgerstr Germany Aug-11 118 430
11 Vienna Downtown Austria Oct-11 131 484
12 Vienna Schiffamt Austria Nov-11 103 297
13 Frankfurt Airport Germany Jan-12 168 436
14 Berlin Airport Germany Apr-12 156 468
15 Amsterdam Netherlands Jul-12 219 737
16 Brussels Belgium May-13 170 724
Total 2,092 7,340
Source: Company, MOSL
New properties and increased utilization to drive growth
COXK is one of the largest European hotel chains that cater to the twin opportunity
of student travel (competing with various youth hostels) and leisure/business travel
(competing with budget hotels). During FY14, Meininger recorded revenue of
GBP45m and capacity utilization of 70% (v/s FY13 revenue of GBP38m, with a
capacity utilization of 65%). Company has guided to double its capacity from current
levels by FY18-19, with about 14 hotels in the pipeline. We expect Meininger to be a
key contributor to earnings going forward, with increasing capacity, higher
utilization and lower capex requirements.
6,616
7,340 7,840
9,440
11,840
FY13 FY14 FY15E FY16E FY17E
Number of beds
3,231
3,520
4,037
4,649
9%
15%
15%
FY14 FY15E FY16E FY17E
Revenue YoY Growth
Company has guided to
double its capacity from
current levels by FY18-19,
with about 14 hotels in
the pipeline

18. Cox & Kings
11 August 2014 18
Meininger Hotel Brussels
Source: Company, MOSL Source: Company, MOSL
Source: Company, MOSL Source: Company, MOSL

19. Cox & Kings
11 August 2014 19
International leisure operations
Expanding business from UK to pan Europe
 Superbreak was acquired in September 2011 as a part of Holidaybreak acquisition.
Superbreak (UK) and Bookit (Netherlands) are 15-year-old brands which provides
domestic short break trips.
 Until acquisition, Superbreak was concentrated only in the UK. However, management
is planning to improve its presence pan European product portfolio, which will drive
growth.
 B2C Direct Business (Online+Phone) bookings now contributes 30% of Superbreak
revenue.
 UK contributes 20% of revenues is expected to grow at 8-9% while Dubai operations
which contribute 9% of the revenue, is expected to grow at 15% in the next two years.
Superbreak – a unique value proposition
Superbreak was acquired in September 2011 as a part of Holidaybreak acquisition.
Superbreak (UK) and Bookit (Netherlands) are 15-year-old brands which provides
domestic short break trips. Superbreak is among the largest operator in UK
providing integrated solution and complete short breaks holiday package. Most tour
operators either provide airlines booking or hotel bookings, thus Superbreak brings
unique value proposition. Hotelbreaks has a tie-up with ~2,000 hotels across Europe
and brings cost synergies in the business, thus driving profitability.
Improved penetration to drive growth
Superbreak contributes 30% of the international leisure business. Until acquisition, it
was concentrated only in the UK. However, management is planning to increase its
presence pan Europe as well as product portfolio to drive growth. Superbreak is
planning to provide robust airlines and rail connectivity to support its expansion
plan. Its packages are distributed through all the channels: B2B, B2C and Affiliate
marketing.
B2C Direct Business (Online + Phone) bookings form 30% of Superbreak revenue.
Even competitors/large retailers like Thomas Cook and Thomson do not have an
independent and complete product portfolio. Hence, Superbreak package sales
complement its business.
Other international leisure business
Other international leisure business includes product offerings in Dubai, Australia
and US, and outbound tours in the UK. UK contributes ~20% to revenues while US
and Australia contributes ~10% each followed by Dubai operations which contribute
9%, UK business contributes 25%, while balance international business is
contributed by the Japan, Singapore etc. Management expects 8-9% growth in UK
operations and ~15% growth for Dubai operation over next 2 years.
Hotelbreaks has a tie-up
with ~2,000 hotels across
Europe and brings cost
synergies in the business,
thus driving profitability
B2C Direct Business
(Online+Phone) bookings
now form 30% of
Superbreak revenue, which
was negligible till
acquisition
Dubai operations contribute
9%, UK business contributes
25%, while balance
international business is
contributed by the
US/Australia

20. Cox & Kings
11 August 2014 20
Financial outlook
De-leveraging of balance sheet in sight
Revenue to clock 13% CAGR over FY15E-17E
We expect COXK revenue to grow at 13% CAGR over FY15E-17E from INR21.3b in
FY15E to INR27.1b in FY17E. The growth will largely driven by the expansion of the
Meininger business; contribution from new centers in Educational business viz.
Australia etc and opening of new franchisee domestic leisure business.
Revenue growth trend post selling off camping business
Source: Company, MOSL
EBITDA margin to sustain; robust growth in PAT
We believe that EBITDA will grow from INR8.2b in FY15E to INR10.6b in FY17E while
maintaining overall margin at 39%. Improvement in capacity utilization in PGL
complimented by improvement in UK economy (which will benefit NST and
Meininger business) thereby driving operating leverage. We expect PAT to grow at
29% CAGR from INR2.6b in FY15E to INR4.3b in FY17E.
EBITDA growth trend
Source: Company, MOSL
Robust growth in PAT to continue
Source: Company, MOSL
FCF generation will assist in de-leveraging the balance sheet
Net debt shot up to INR41b in FY14 mainly due to acquisition of HBR in FY12. We
believe that cash generated from selling of camping business (~INR8.9b)and strong
FCF from existing businesses will help to pay off the debt. This will assist in
substantial de-leveraging of balance sheet and Net Debt/Equity ratio is expected to
drop from 2.4x in FY14 to 1x in FY17E.
8,450
18,092
23,080
21,280 23,966 27,123
114%
28%
-8%
13% 13%
FY12 FY13 FY14 FY15E FY16E FY17E
Revenue (INR m) YoY Growth
7,225
8,901
8,209
9,304
10,58440%
39% 39%
39%
39%
FY13 FY14 FY15E FY16E FY17E
EBITDA (INR m) Margins
2,922
2,552 2,601
3,510
4,332
-13%
2%
35%
23%
FY13 FY14 FY15E FY16E FY17E
PAT (INR m) YoY Growth

21. Cox & Kings
11 August 2014 21
Substantial FCF generation will lead to reduction in Net D/E
Source: Company, MOSL
33,044
29,406
41,592
34,795
31,154
26,265
2.8
2.2 2.4
1.7
1.3
1.0
FY12 FY13 FY14 FY15E FY16E FY17E
Net Debt (INR m) Net D/E

22. Cox & Kings
11 August 2014 22
Key risks
Concentration of operations in Europe
Over half of the company’s revenue is linked to travel outlook in Europe. A
significant deterioration in travel outlook for Europe can affect our growth
estimates.
Further stress on balance sheet
Historically, COXK growth has been primarily driven by overseas acquisitions. The
main concern on the stock has been company’s high leverage. Any further
acquisitions, before reducing leverage on the balance sheet, could stress cash flows,
going forward.
Fluctuation in foreign currency
~3/4ths of COXK business is international in nature and thus exposed to foreign
exchange. Any adverse fluctuation in foreign currency can have major implications
in the functioning of business.

23. Cox & Kings
11 August 2014 23
Key management team
Mr A B M Good, Promoter & Non-Executive Chairman
Mr Good, 76 years, is the promoter of the company. He is a Fellow member of the
Relations. After forming what later became the London Stock Exchange listed Good
Relations Group Plc, he acted as a consultant to Laker and the parent company of
British Caledonian Airways for a few years reporting directly to the Chief Executive.
In 1971, he was appointed on the board of Cox & Kings Ltd, UK and subsequently
became the Chairman in 1975. He was also a Director of Grindlays Commercial
Holdings Ltd. During the period when Cox & Kings remained a wholly-owned
subsidiary of the bank, he was given a consultancy assignment to turn the company
into a long haul tour operator specializing in India. He was appointed on the board
of Cox and Kings (India) Ltd for the first time on January 12, 1976. He is currently the
Non-Executive Chairman of the company, its UK subsidiaries and promoter group
entity, Good Relations (India) Private Ltd.
Mr Ajay Ajit Peter Kerkar, Promoter & Non-Executive Director
Mr Ajay Ajit Peter Kerkar, 46 years, is the promoter of the company. He is a
graduate in arts (B.A.) with distinction in Anthropology from Stanford University,
USA. He joined Cox & Kings Travel Ltd in October of 1986 in the capacity of General
Manager. It was under his tenure wherein Cox & Kings Travel Ltd expanded its
product geographies from India to sell Latin America, Environmental Journeys,
Special Interest Tours, Middle East, Africa, Egypt, China and the Far East. He is based
in the UK and responsible in the company for overall leadership, strategy, global
centralized buying and international growth, as a part of which he has been actively
involved in the identification of newer opportunities. He was appointed on the
board of Cox and Kings (India) Ltd for the first time on November 30, 1993.
Ms Urrshila Kerkar, Promoter & Whole Time Director
Ms Urrshila Kerkar, 51 years, is the promoter of the company. She is a graduate in
art (B.A.) with distinction in Economics and Psychology from Bombay University and
holds an associate degree from Pratt University, NY, USA in Graphic Design. Prior to
joining the company in 1990, Ms Kerkar was running her own enterprise, a graphic
design and production house which won many international awards for design. Ms
Kerkar initially worked with the company in an advisory role on marketing and
brochures design from 1985 and her role was extended when she joined the
company in 1999 and was made in-charge of Indian operations. She has been at the
forefront of company's growth playing a vital role in the development of outbound
leisure and domestic leisure business and is the driving force behind the company's
IT vision. Ms Kerkar was invited to be on the board as an Executive Director in the
2004 and since then she continues to be on the board. She has been directly
involved and responsible for the day-to-day management of the company in India
and for all marketing and design initiatives for the group.
Mr Ajay Peter Kerkar
Ms Urrshila Kerkar
Mr A B M Good

24. Cox & Kings
11 August 2014 24
Annexure: Industry overview
Indian tourism industry has significantly improved in past decade
Indian travel and tourism set to rise
Indian tourism industry delivered significant growth over the last decade. Growth in
tourism ensures sustained foreign earnings and also creates employment
opportunities in the country. The World Tourism and Travel Council (WTTC)
estimates Indian tourism industry to post 12% CAGR over CY13-23. Growth in travel
and tourism is expected to surge on the back of an increase in disposable income,
favorable demographics and improvement in economic condition. T&T sector also
creates massive employment opportunities. It generated 39m opportunities, which
was 10% of the total employment generated in Indian economy.
India’s GDP growth
Source: WTTC 2013, MOSL
T&T contribution to Indian economy on the rise
Source: WTTC, MOSL
Contribution of T&T to total GDP
Source: WTTC, MOSL
Employment generation by T&T sector
Source: WTTC, MOSL
Inbound tourist arrivals picked up in past decade…
Foreign tourist arrivals have jumped significantly post the launch of campaign
“Incredible India” in 2002. Before 2002, the Indian government regularly formulated
policies and prepared pamphlets and brochures for the promotion of tourism,
though it did not support tourism in a concerted manner. However, in 2002, the
tourism ministry made efforts to bring more professionalism in its attempts to
promote tourism. Hence, foreign tourist arrivals in India increased ~3x from 2.38m
in FY02 to 6.65m in FY12 based on a creative campaign created by Ogilvy & Mather
721 834 949
1,238 1,224 1,365
1,708 1,880 1,858 1,876
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GDP (USDb)
3,476 4,014 4,131 4,769 5,686 6,385 7,416
23,020
2007 2008 2009 2010 2011 2012 2013 2023E
Total Contribution of T&T to GDP (INR b)
12% CAGR
Mining, 4.8
%
Chemicals
manufactur
ing, 7.1% Auto
manufactur
ing, 7.3%
Communica
tion, 9.7%
Education,
6.0%
Higher
education,
1.0%
Financial
services, 36
.8%
Banking, 18
.0%
T&T, 9.2%
% Contribution to GDP
Mining, 5.8
%
Chemicals
manufactur
ing, 7.6% Auto
manufactur
ing, 9.1%
Communica
tion, 9.2%
Education,
12.6%
Higher
education,
1.5%
Financial
services, 29
.8%
Banking, 14
.4%
T&T, 10.1%
% of Total employment generated
The World Tourism and
Travel Council (WTTC)
estimates Indian tourism
industry to post 12% CAGR
over CY13-23
Foreign tourist arrivals in
India increased ~3x from
2.38m in FY02 to 6.65m in
FY12 based on a creative
campaign created by Ogilvy
& Mather (India) (O&M)

25. Cox & Kings
11 August 2014 25
(India) (O&M). Foreign tourist arrivals also assisted in forex earnings. Forex receipts
increased ~5.5x from USD3.1b in FY02 to USD17.7b in FY12. Apart from the global
financial crisis which hit in 2008, there has been a consistent increase in both foreign
tourist arrivals and forex receipts.
Foreign tourist arrivals have shown a persistent increase…
Source: Ministry of Tourism, MOSL
…which led to an increase in foreign earnings over the years
Source: Ministry of Tourism, MOSL
…yet India at a nascent stage
Even though tourism picked up significantly in the past decade, India is yet to match
international peers. Global tourism arrivals peaked the 1b mark in 2012, and France
led the space with 83m visitors, marking it as the most attractive tourist destination.
China was also in the leading space with 57m visitors, while India lags at 6.6m
visitors annually. 16% of the total visitors are from the US and 12% from the UK.
State-wise, Maharashtra is the preferred foreign tourist state attracting 1/4th
of the
total visits followed by Tamil Nadu with 17% foreign visits. In global tourism receipts,
India contributes 1.6% of the global receipt of USD1,075b and 5% to the Asia Pacific
tourist receipt of USD322b. India’s global rank in tourism receipts has improved
from 37th
place in 2002 to 16th
place in 2012. While in the Asia Pacific region, India’s
rank improved from 13th
in 2002 to 7th
in 2012. Thus, Indian tourism industry is
showing signs of improvement.
2.65
2.54
2.38
2.73 3.46 3.92 4.44 5.08 5.28 5.17 5.78 6.31 6.65
7%
-4% -6%
14%
27%
13% 13% 14%
4%
-2%
12%
9%
5%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
ForeignTourist Arrivals (m) YoY Growth
3.46
3.20 3.10 4.46 6.17 7.49 8.63 10.73 11.83 11.14 14.19 16.56 17.74
15%
-8%
-3%
44%
38%
21%
15%
24%
10%
-6%
27%
17%
7%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Forex Earnings (USDb) YoY Growth
Global tourism arrivals
peaked the 1b mark in
2012, and France led the
space with 83m visitors,
marking it as the most
attractive tourist
destination

26. Cox & Kings
11 August 2014 26
Indian foreign tourist arrivals are significantly lower…
Source: Ministry of Tourism, MOSL
…and so are international tourism receipts
Source: Ministry of Tourism, MOSL
States attracting maximum foreign tourists
Source: Ministry of Tourism, MOSL
Foreign tourists arrival breakup
Source: Ministry of Tourism, MOSL
Comparison of world, Asia Pacific and India tourism receipts
Source: Ministry of Tourism, MOSL
Outbound travel growth shows confidence in economy
Over the last 15 years, outbound visits have shown significant growth primarily due
to higher affordability, rise in aspirations and availability of cheaper airline travels.
Growth in outbound travel is a sign of growth in the economy whereby travelers
have disposable income and affordability to travel out of the country. Barring the
financial crisis phase, outbound travel has also grown significantly. While outbound
travel results in forex outgo, it helps in the growth of domestic tourist agents,
airlines and other allied industries. Outbound travelers from India prefer Singapore,
Malaysia, Thailand, Indonesia etc as major tourist destination and thus 48% of the
total outbound travel in 2011 was for the Far East. Apart from these countries,
Egypt, UAE, the US etc are other destinations where tourists outgo is high.
83
57.7 57.7
46.4
35.7 30.4 29.3 25.7 25
6.6
France
China
Spain
Italy
Turkey
Germany
UK
Russia
Malaysia
India
ForeignTourist Arrivals (m)
128.6
55.9 53.7 50 41.2 38.1 36.4 31.7 31.5
17.7
USA
Spain
France
China
Italy
Germany
UK
HongKong
Australia
India
International Tourism Receipts (USDb)
Maharashtr
a, 25%
TN, 17%
Delhi, 11%UP, 10%
Rajasthan,
7%
WB, 6%
Bihar, 5%
Kerala, 4%
Kar, 3%
Himachal
Pradesh, 2
%
Others, 10
%
% Share
US, 16%
UK, 12%
Ban, 7%
SL, 5%
Can, 4%Ger, 4%Fra, 4%Japan, 3%
Aus, 3%
Mal, 3%
Others, 39
%
% Share
443 445 458 475 464 482 529
633 680 744
857
939
853
927
1,042 1,075
82.6 72.3 79.1 85.3 88.1 96.5 93.7 124.1 135.0 156.9 187.0 208.6 204.2 255.3 289.4 322.8
2.9 3 3 3.5 3.2 3.1 4.5 6.1 7.5 8.6 10.7 11.8 11.1 14.1 16.6 17.7
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
World Asia Pacific India
Outbound travelers from
India prefer Singapore,
Malaysia, Thailand,
Indonesia etc as major
tourist destination and thus
48% of the total outbound
travel in 2011 was for
the Far East

27. Cox & Kings
11 August 2014 27
Outbound travel trend
Source: Ministry of Tourism, MOSL
Far East and Middle East are the preferred outbound tourist destinations
Source: Indian Tourism Statistics 2012, MOSL
Growth backed by capital investment
Capital investment in tourism is the contribution of all sectors directly relating to the
industry. Development of tourism requires investment in various sectors like
infrastructure, hotels and accommodations, transportation, restaurants, transport
equipment and leisure facilities etc. With a stable Modi-led government ruling, we
believe that tourism will be its primary focus as suggested in the manifesto. In the
past five years, capital investment clocked a CAGR of 5% from INR1,556b in FY08 to
INR2,012b in FY13. However, as per recent KPMG report; with increased
government focus and improvement in the economy, the capital investment in
tourism sector will be major and it is poised to clock a CAGR of 10.5% to reach
INR5,459b by FY23E.
Capital investment in T&T sector set to rise
Source: KPMG, MOSL
3.7
3.8
4.1 4.4 4.6 4.9 5.4 6.2 7.2 8.3 9.8 10.9 11.1 13.0 14.0 14.9
2%
8% 8%
3%
8% 8%
16% 16% 16% 17%
11%
2%
17%
8% 7%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Noof Outbound visits (m) YoY Change
NorthAmerica, 9%
SouthAmerica, 1%
Europe, 9%
Africa, 5%
Middle East, 26%
Far East Asia, 48%
Australia, 2%
% of Outbound travels
1,556
1,128 1,319 1,545 1,716 2,012
5,459
2008 2009 2010 2011 2012 2013 2023E
Capital Investment in T&T (INR b)
CAGR 10.5%
As per recent KPMG report;
with increased government
focus and improvement in
the economy, the capital
investment in tourism
sector will be major and it is
poised to clock a CAGR of
10.5% to reach INR5,459b
by FY23E

28. Cox & Kings
11 August 2014 28
Excerpts of BJP manifesto
“Tourism - Untapped Potential
BJP recognizes the role tourism and hospitality can play as a foreign exchange
earner and its ability to create millions of jobs every year. Tourism plays a key role
in socio-economic progress through creation of jobs, enterprise, infrastructure
development, and foreign exchange earnings.
BJP realizes that the tourism sector needs a clear plan for growth, and BJP commits
to initiate a mission mode project to create 50 tourist circuits that are affordable
and built around themes like: a.) Archaeological and Heritage, b.) Cultural and
Spiritual, c.) Himalayan, d.) Desert, e.) Coastal, f.) Medical (Ayurveda and Modern
Medicine), etc. This will lead to creation of infrastructure and employment around
each tourist circuit and help in boosting revenue generation. Specialized course in
tourism will be started for capacity development. Safety and Security of tourists
would be accorded due priority.”
World tourism touches 1b mark
International tourism arrivals marked a historic figure of 1b in 2012. According to
figures released by the United Nation’s World Tourism Organization (UNWTO) in
January 2013, international tourist arrivals exceeded the figure of 1b for the first
time ever in 2012, reaching a total of 1.03b tourists, 39m more than 2011. The data
suggested that Asia Pacific was the fastest growing region by 7% over 2011,
followed by Africa 6% growth over 2011. International tourist arrivals to Europe
were up by only 3%, which was a positive result in view of the economic situation in
2011. Europe is the largest tourist destination attracting 52% of the world arrivals in
2012.
Foreign tourist arrivals in different regions (m)
Source: Tourism Government of India, MOSL
Europe contributes most of tourist arrivals
Source: Tourism Government of India, MOSL
461 488 518 535
181 205 218 233
141
150 156 16246
50 49 5252 59
55 53
2009 2010 2011 2012
Europe Asia Pacific Americas Africa Middle East
Europe
52%
Asia Pacific
22%
Americas
16%
Africa
5%
Middle East
5%
% Share of World Tourist Arrivals in 2012
Europe is the largest tourist
destination attracting 52%
of the world arrivals
in 2012

29. Cox & Kings
11 August 2014 29
Financials and valuations
Income statement (INR Million)
Y/E Mar 2012 2013 2014 2015E 2016E 2017E
Net Sales 8,379 18,087 23,076 21,280 23,965 27,122
Change (%) 68.7 115.9 27.6 -7.8 12.6 13.2
EBITDA 1,673 7,225 8,901 8,209 9,303 10,583
EBITDA Margin (%) 20.0 39.9 38.6 38.6 38.8 39.0
Depreciation 491 1,474 1,711 1,221 1,278 1,527
EBIT 1,182 5,751 7,190 6,988 8,025 9,056
Interest 1,843 3,705 3,236 3,059 2,639 2,444
Other Income 356 588 431 397 447 506
Extraordinary items -993 588 -1,748 0 0 0
PBT 687 2,046 6,133 4,326 5,834 7,118
Tax 418 521 1,643 1,125 1,633 1,993
Tax Rate (%) 60.8 25.5 26.8 26.0 28.0 28.0
Min. Int. & Assoc. Share 146 959 -659 -600 -690 -794
Reported PAT 416 2,484 3,832 2,601 3,510 4,331
Adjusted PAT 26 2,922 2,552 2,601 3,510 4,331
Change (%) -67.8 497.3 54.3 -32.1 34.9 23.4
Balance sheet (INR Million)
Y/E Mar 2012 2013 2014 2015E 2016E 2017E
Share Capital 683 683 683 683 683 683
Reserves 11,241 12,577 16,867 19,309 22,660 26,832
Net Worth 11,924 13,260 17,549 19,991 23,342 27,514
Minority Interest 0 5,422 8,205 8,805 9,495 10,289
Debt 46,618 46,763 55,981 45,981 41,981 39,481
Deferred Tax 766 746 700 700 700 700
Total Capital Employed 59,308 66,190 82,435 75,477 75,518 77,984
Gross Fixed Assets 24,951 26,028 32,739 28,299 29,799 31,299
Less: Acc Depreciation 5,804 6,412 8,123 9,344 10,622 12,149
Net Fixed Assets 19,147 19,616 24,616 18,955 19,177 19,150
Capital WIP 1,238 1,434 1,506 1,506 1,506 1,506
Investments 3,042 4,664 602 602 602 602
Current Assets 26,426 30,404 37,551 34,670 36,997 42,443
Inventory 173 186 199 184 206 232
Debtors 7,151 9,054 11,356 10,472 11,793 13,347
Cash & Bank 10,533 12,693 13,786 10,584 10,225 12,613
Loans & Adv, Others 8,570 8,471 12,209 13,430 14,773 16,251
Curr Liabs & Provns 17,190 17,328 22,373 20,789 23,298 26,250
Curr. Liabilities 16,409 16,850 21,485 19,812 22,223 25,068
Provisions 781 478 888 977 1,075 1,182
Net Current Assets 9,236 13,076 15,178 13,881 13,700 16,193
Total Assets 59,308 66,190 82,435 75,477 75,518 77,983
E: MOSL Estimates

30. Cox & Kings
11 August 2014 30
Financials and valuations
Ratios
Y/E Mar 2012 2013 2014 2015E 2016E 2017E
Basic (INR)
EPS 0.2 21.4 18.7 19.1 25.7 31.7
Cash EPS 3.8 32.2 31.2 28.0 35.1 42.9
Book Value 87.3 97.1 128.5 146.4 171.0 201.5
DPS 1.0 1.0 1.0 1.0 1.0 1.0
Payout (incl. Div. Tax.) 38.2 6.4 4.2 6.1 4.5 3.7
Valuation(x)
P/E 13.9 13.6 10.1 8.2
Cash P/E 8.3 9.3 7.4 6.1
Price / Book Value 2.0 1.8 1.5 1.3
EV/Sales 3.4 3.3 2.8 2.3
EV/EBITDA 8.7 8.6 7.2 5.9
Dividend Yield (%) 0.4 0.4 0.4 0.4
Profitability Ratios (%)
RoE 0.2 23.2 16.6 13.9 16.2 17.0
RoCE 3.9 10.7 11.4 10.6 12.9 14.5
Turnover Ratios (%)
Asset Turnover (x) 0.1 0.3 0.3 0.3 0.3 0.3
Debtors (No. of Days) 311 183 180 180 180 180
Inventory (No. of Days) 8 4 3 3 3 3
Creditors (No. of Days) 715 340 340 340 338 337
Leverage Ratios (%)
Debt/Equity (x) 3.9 3.5 3.2 2.3 1.8 1.4
Cash flow statement (INR Million)
Y/E Mar 2012 2013 2014 2015E 2016E 2017E
OP/(Loss) before Tax 687 1,969 4,385 4,326 5,834 7,118
Depreciation 491 1,474 1,711 1,221 1,278 1,527
Others 0 0 0 0 0 0
Interest 1,675 3,363 2,805 2,662 2,192 1,938
Direct Taxes Paid -259 -806 -1,643 -1,125 -1,633 -1,993
(Inc)/Dec in Wkg Cap -3,529 -3,728 -1,008 -1,905 -178 -105
CF from Op. Activity -1,366 1,745 5,772 5,179 7,492 8,485
(Inc)/Dec in FA & CWIP -1,307 -1,695 -19,982 4,440 -1,500 -1,500
(Pur)/Sale of Invt 2,013 0 4,062 0 0 0
Others -23,252 -69 2,635 397 447 506
CF from Inv. Activity -22,546 -1,764 -13,285 4,837 -1,053 -994
Inc/(Dec) in Net Worth 0 0 0 0 0 0
Inc / (Dec) in Debt 26,542 144 9,218 -10,000 -4,000 -2,500
Interest Paid -1,449 -3,917 -3,236 -3,059 -2,639 -2,444
Divd Paid (incl Tax) -80 -159 -159 -159 -159 -159
CF from Fin. Activity 24,837 2,568 8,606 -13,218 -6,798 -5,103
Inc/(Dec) in Cash 925 2,548 1,093 -3,202 -359 2,388
Add: Opening Balance 9,608 10,144 12,693 13,786 10,584 10,225
Closing Balance 10,533 12,693 13,786 10,584 10,225 12,613
E: MOSL Estimates

31. Cox & Kings
11 August 2014 31
N O T E S

32. Cox & Kings
11 August 2014 32
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