Travel Food Services Ltd (NSE: TRAVELFOOD) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Varun Kapoor — Director
Vikas Kapoor — Chief Financial Officer
Analysts:
Manoj Menon — Analyst
Jay Doshi — Analyst
Nihil Jaime — Analyst
Vedant Rane — Analyst
Akhilesh Batter — Analyst
Arvind R — Analyst
Dheeraj Mistry — Analyst
Rahul Agarwal — Analyst
Akhil Parikh — Analyst
Jaya Doshi — Analyst
Presentation:
Operator
Ladies and gentlemen, Good day and welcome to the Q1FY26 earnings conference call of Travel Food Services hosted by ICIC Securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your dashtun phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Manoj Menon from ICIC Securities Limited. Thank you. And over to you sir.
Manoj Menon — Analyst
Hi everyone. Representing isec, it’s our absolute pleasure to host the first ever quarterly results conference call of Travel Food Services. Handing over to Ms. Javi Agarwal from the company Vice President in Installations for the further proceedings. Thank you. Thank you, Manoj. Good evening to all from Travel Food Services. We have with us Managing Director and CEO Mr. Varun Kapoor and Whole Time Director and CFO Mr. Vikas Sunot Kapoor. To discuss the first quarter financial performance and address the question and answer session. Before we proceed, here’s a disclaimer for the call. A few statements by the company’s management in the call will be forward looking in nature. And we request you to the disclaimer in the earnings presentation for further detail. We’ll start the call with an opening remarks from the management followed by the Q and A session. I would now like to hand over the call to Mr. Varun Kapoor for opening remarks. Thank you. And over to you.
Varun Kapoor — Director
Yes. Good evening ladies and gentlemen and thank you for joining us on the call. I would like to start by first extending my gratitude to all our stakeholders, investors, customers, regulators, employees as well as very much our airport and brand partners for the invaluable support extended throughout our IPO process. The trust by them and confidence through the years have been a very important contributor to achieve this milestone. So before we move into the quarterly performance, since this is our first earnings call post listing, I would like to take a few minutes to briefly explain our business. So here at TFS we primarily operate in two categories. Travel QSR and lounges at airports. So Travel QSR is mainly the FNB outlets you see at the airports. We call it Travel QSR as it’s a required attribute for all the outlets to deliver their product in a quick manner. Given the. Time sensitive customers at airports that we all see. Within Travel QSR we are a one stop shop offering a whole range of concepts, formats and cuisines. Further, we also operate lounges at multiple airports and the lounge business model has gained a lot of prominence in the last decade not just in India but globally as well. This is mainly due to the combination of increasing travel, higher disposable income and increasing credit card adoption. Within Travel QSR we are the leading player with 26% market share and have 454 outlets as of June 30, 2025. This continues to grow as we speak. We are a unique multi brand platform with 130 brands including global and regional partner brands as well as our own popular in house brands. We are also the leading lounge operator in the country with 45% market share and operate 37 lounges in India, Malaysia and Hong Kong. So we started our journey in 2009 and we operated airports through long term contracts with airport operators and they often prefer a master concession for similar services by bundling multiple units to a ward to one concessionaire capable of providing comprehensive F and B coverage and loud services at the airports. There are many complexities and challenges involved in operating in a restricted space such as airports ranging from security issues, construction challenges, large back of house investments in stores and central kitchens to name a few. Our ability to navigate through these complexities and successfully run the business differentiates us and and acts as a high entry barrier for others and a competitive moat for our business. I would also like to emphasize our business and growth has been complemented by our long term partnerships with leading airport operators in the country. We have formed strategic joint venture partnerships with two of the largest multi airport operators with whom we have had the experience of working with for many years. This structure covers lounges and QSR outlets in key locations like Mumbai, Hyderabad, Ahmedabad Navi, Mumbai, Lucknow and Goa Mopa amongst others. We have been successfully delivering strong performance for years and therefore we have a contract renewal rate of 94% since the inception of our business in 2009 which is a key strength of the business demonstrating our success in operating our existing contracts and the strength of our partnerships coming to our financial performance. Our focus has been always on sustainable growth coupled with efficient capital management and a healthy generation of consistent profits. The same is also reflected in our financial performance as our system wide revenue and profit after tax have grown at a CAGR of over 20% consistently over the past decade and are. Roc our return on capital employed, which is a key statistic we look at for the nature of our business, has been steady at around a 50% over the last few years. Going forward, we see a large and fast expanding opportunity in the Indian air travel space in which we operate. We are also well positioned to scale our footprints in the international markets with the success seen in Malaysia and Hong Kong. In addition, the Highway FNB business in India is at a very nascent stage and with the large public and private investments planned in the sector coupled with the growth of access control expressways, we do see that being an area of growth for the TFS business over the next decade which we shall tap in a strategic and prudent manner. So our strategy has three key pillars growth, optimization of our financial performance and delivery with focus on strong people practices as part of our strategic priorities. As well, we continue to strengthen partnerships with leading global brands including the opening of Nando’s at the Delhi Terminal 3 recently and the upcoming launch of two Gordon Ramsay concepts at Delhi Terminal 1 and Mumbai Terminal 2 respectively. We also forged the national tie up with Coca Cola to further enhance our beverage offerings across outlets and rolled out a technology solution enabling direct collaborations with banking and credit card partners, eliminating intermediaries, delivering tailored solutions for distinct customer segments, driving economic value and ensuring a more seamless passenger experience. We will continuously strive to expand our business while delivering operational and capital efficiency and driving earnings with a focus on customer experience enhancement. So before I move on to our quarterly performance, I would like to take a moment on behalf of the company to express our deepest condolences to the families of the people affected by the tragic Air India plane crash in Ahmedabad that had a profound impact not only the aviation industry but I think as well on each and every single Indian coming to the quarterly performance. Our system wide sales which is sales including our JVS and associates that we operate have grown at a very healthy rate of 26.7% with like for like growth of 12.5% and net contract gains of 10.1%. And this is in spite of certain temporary headwinds that has caused moderation of air passenger growth in the quarter as visible to everyone. These were namely geopolitical events of recent past as well as the after effects of the aircraft maintenance and grounding due to the unfortunate crash of the air India Boeing 787 in early June and there’s been a short term effect on the growth of passenger traffic towards the second half of the quarter. So despite that our numbers have grown at the level that you see it, and we see the effects of this temporary traffic moderation continue into the current quarter. With recovery trends already underway in line with Air India’s indications suggesting the recovery is underway from August and we expect these temporary effects to return to normalcy ahead of the second half of the year as well. In the business as well, we have a strong focus on profit generation which is an important tenant for the business. We delivered a 59.5% year on year growth in reported paths profit after tax, which also equated to a 19.3% year on year growth in our adjusted path, which Vikas will also elaborate on specifically shortly, showing the robustness of our business model. This is a clear testament to the resilience of our business model and the exceptional efforts of a highly motivated team. Now I request our CFO Vikas Kapoor to take you through the quarterly numbers in detail.
Vikas Kapoor — Chief Financial Officer
Thank you Varun and once again welcome you all to the Q1 FY26 earnings call. Before I talk about numbers, I would like to explain our commercial models that drive our revenues. We operate our units under two key long term contracts and strategic partnership arrangements. Long term contracts are fully consolidated into our P and L and strategic partnerships are accounted as JVs or associates under the equity pickup model. In long term contracts we own and consolidate the full P and L after paying a concession fee to the airport owner. As a result, we invest the complete capital into the unit in joint ventures.
As the operations are overseen by us, we receive a management fee for operating the units and a share of the pact of the joint venture entity. As per our equity shareholdings. The capital investment is also proportionately shared along with the JV partner. In both models we manage the units in the same way but the accounting treatments are different. Therefore, we talk about system wide sales which represent TFS managed airports including the subsidiaries, JVs and Associates in line with what Varun explained a bit earlier. In addition to our long term contracts, the JV arrangement enables us to be in a strong position to operate the FNB and lounges in many existing and new airports operated by the multi airport operators.
Before I move to talk about our performance in detail, I would like to mention that since Semolina Kitchens was part of our consolidated financials for the first half and part of Q3 last year, we have adopted a like for like comparison to ensure consistency in evaluating business performance. Accordingly, Semolina’s quarter one losses for FY25 have been added back to the results in Q2 FY25. As semolina turn profitable following unit mobilization, the corresponding profit will be adjusted to maintain similar comparability to Q2 FY26 results. Now coming to the numbers, the systemwide sales touch 7.15 billion growing by 26.7% y o y as Varun brought out earlier, the growth was supported by a healthy like for like growth of 12.5% and net contract gains of nearly 10.1%. LFL is driven by effective revenue optimization initiatives despite a short term moderation in air passenger traffic growth. Net contract gains are driven by mobilization of new travel QSR outlets and lounges at the airport, primarily at Mumbai, Hyderabad, Ahmedabad and Lucknow airports. If we go to consolidated sales, we have reported sales of rupees 3.75 billion representing a year on year growth of 6.3%. Like for like growth for consolidated sales was 5.5% impacted by short term moderation in passenger traffic growth. Net contract gains showed a decrease by 2.7% year on year due to expiry of few contracts and subsequent pickup of the new contracts by the JV. Gross margin increased to 83% as lower inflation efficient procurement strategies coupled with effective supply chain lowered production cost. Additionally, continuous focus on process optimization and operational discipline lowered other expenses as percentage of sales by more than 150bps. Share of profit from JVS and Associates was 80 million this quarter which was due to a one time deferred tax adjustment along with certain pre operating expenses for the units that are being mobilized. As of now, our consolidated pack increased to Rs 950 million in Q1FY26 delivering a strong 19.3% YoY growth compared to the previous year. With that I will close the opening remarks and will hand it back to the operator to open it for Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touch to. If you wish to remove yourself from question Q, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Jay Doshi from Kotak Securities. Please go ahead.
Jay Doshi
Hi team, Congratulations on good results. Just a request in future, if you could upload the presentation a little bit earlier so that we get some chance to go through it before the earnings call. One quick question from my end is could you explain the seasonality in your business? Typically, if you know, if there are no net contract gains during the course of a year, how should one think about profitability of 1Q and how does it progressively sort of change on Q2, Q3, Q4?
Varun Kapoor
Hi Jay, good evening. Thanks for your question. And so this is Varun here. So in terms of what we see in the business, which I think has been quite consistent over the last few years, is normally for us in terms of seasonality, which is why YOY is a useful indicator to see H1 tends to be a slightly lower percentage versus H2. You could roughly consider it at being 45% H1 and 55% H2 driven by the fact of passenger traffic.
So that ratio comes from passenger Traffic is roughly 45% towards H1, 55% H2. You know, at the holiday season you have the months of December, January, February, where air traffic tends to be stronger as well as consumer spends during the holiday period as well, people on leisure travel tend to spend a bit more. So that is something we have generally seen across the business and particularly looking at. And therefore you see that trends happening year on year and playing out in the numbers as well.
If you see in terms of particularly referring to the profitability and how that plays out over a period, I think what one surely does see is that quarter three and quarter four, with that same logic are the quarters that do stand out as you would see reflected in our numbers as well. And I think maybe we can make reference, I think to this particular quarter as well. While looking at it, traffic has been slight moderation towards the end of the quarter.
But like you said, you see those effects a normal period where Q3, Q4 would be much stronger from versus Q1, Q2, sure, any color you can provide, which helps us appreciate the operating leverage advantage. You get into Q second half better because when we look at historical numbers, given that accounting changes and it was. Little difficult for us to sort of. Or if you can just tell us broadly, you know, everything else being same, if the revenue split is 45, 55 first half versus second half, what could potentially be the profit split, first half versus second half? Sure, I’ll maybe hand it over Vikas, but before I take, I think there was a part of your question which I didn’t address. I think you were talking about the net contract gain. So that may be just a perspective to give there. You know, now business that tends to be a bit lumpy by nature of our business, while on a system wide basis we’ve had a growth there in terms of new units being mobilizing across airports there. But in terms of that tends to be a bit lumpy. So it’s not year on year basis. It tends to be may not be 1/4, but it could very well be in the next quarter you have a significant jump. That’s by nature of our business where these units come in a master concession there versus obviously lfl coming consistently. But I’ll maybe hand it over to Vikash to maybe address your question right now.
Vikas Kapoor
So Jay, as we progress quarter on quarter, what we see despite the moderation in air traffic, we believe that the moderation will bear out by the end of H1 and traffic should come back to normal in terms of the historical trends at which it has grown. From that perspective, we are well equipped to kind of capitalize on the opportunities. Looking at the real estate that we operate across airports as more units are getting mobilized, we are talking about roughly around 50 plus units that are going to be mobilized during the current year in our system. From that perspective, we believe that yes, we are well on track to achieve our budgeted numbers.
Coming back to your efficiency point, in terms of efficiency, as we have typically seen that in our real estate we operate not only central kitchens but central stores. And because we operate in the entire ecosystem of the airport, FNB and the lounge parameters, we are able to bring in certain efficiencies due to our scale also in terms of manpower deployment. So those efficiencies will continue from that perspective. And our operating margin overall in H2 should only improve looking at how we have traditionally also performed. One more question if I may. So 12 and a half percent like for like sales growth and 4 and a half percent traffic growth.
So I’m assuming the balance, you know, the gap between the two is largely driven by pricing, is that right? Understanding it’s a combination. Yeah. So it is partly comes in from pricing, but partly because Obviously, it’s been a year from that point of view. But in addition to that, I think in this particular instance, there’s a large amount of initiatives around, so a lot of new brands coming in. And if you see the number of units that have opened in that piece of.
Varun Kapoor
As well have been quite significant. So you know that pushing the existing units premiumizing their offer that plays out quite well in the LFL in terms of. So we’ve done a lot of promotions around it and to your point I think make sure that dec. I think that feedback is taken. So we do talk about a lot of the efforts initiatives we’ve done there in existing units to push like for like sales. So I think that’s something as a business we do consistently to push up like for like sales is very much the nature of the business. So it’s a combination of no doubt price but there’s a lot of efficiency gain initiatives on the ground which translates over and above the air passenger traffic as our numbers show
Jay Doshi
. And do you expect this to come?
Operator
I just request you. I’ll get back in the trip.
Jay Doshi
Yeah, thank you so much.
Operator
The next question is from the line of Nihil Jaime from HSBC Securities. Please go ahead.
Nihil Jaime
Yes, good evening. Am I audible?
Varun Kapoor
Yes sir.
Nihil Jaime
So two questions. One a clarification that when you’ve given the like for like growth for the Consol business and system wide I believe for the console sales it is basically the existing airports have given a 6% LFL whereas the system wide which is at 12 and a half is basically the new airports which have come in. So that is what explains the differential. That’s the right understanding to clarify.
Vikas Kapoor
Yes Nihal, you’re absolutely right. The LFL for system wide is a combination of both your consolidated numbers as well as the JV & Associates because as Varun had spoken earlier, the system wide sales represent revenues from the entire footprint of QSR and Nunges that are managed by tfs under long term contracts as well as TV partnerships. Understood that. And is it possible to get a sense you mentioned there were disruptions towards the second half of the quarter because of certain incidents that what was the LFL trending at before some of these incidents played out?
So just to get a sense that once things normalize in H2 maybe to get a sense of how it can improve towards. So I think particularly these sales as you see, look, I think those incidents were primarily for starting May. We had the geopolitical event particularly in India with India, Pakistan happening that had some effects on traffic.
But I think it was June, the mid of June as well where you had the unfortunate crash as well. Those were the effects that happened towards the second half of the quarter. So you did see those play out and probably play out on certain particular markets a bit more prominently. I think that’s been because, as you know, there were slight aircrafts were partly taken off by Air India. I think it was 15% reduction in international widebody flights and 5% of the narrow bodied flights as well. So I think that combination was there from June as well. That dropped. And you could see that particularly playing out in certain airports like maybe Delhi, it was in Calcutta. Played out in Goa. So you know these airports, you did see that effect probably play out a bit better, a bit more in terms of the versus the other airports. But what’s happened I think which is evident from Air India’s own indication from around August those numbers have been coming back. We can see those green shoots very much in our numbers in terms of the growth versus the last year. I think you can see that kind of playing out from those very indications by H1 of this year, the end of H1 kind of normalizing to normalcy. And when I say normalcy I mean normalcy of the growth levels we’ve been quite used to there. While we know we’ve been able to have consistent strong growth by LFL growth being still strong with our initiatives plus the combination of new units, we’ve nonetheless had a 26% system wide growth as well. I think that perspective just for the sector, it looks to be on the trend of improvement currently. Would it be possible to give a sense of April or say till mid May what the Consol LFL and the system wide LFL was trending at Nihal. The overall passenger growth which is in the public domain April on April kind of grew around 10% but from the mid of May it kind of tapered out due to the geopolitical events. And unfortunately at the end of June and some bit of July what we are seeing is the passenger traffic growth has been impacted due to the unfortunate accident of Air India crash. So from that angle but as Varun said earlier, we are seeing the offshoots come.
Nihil Jaime
Got that? Just try to see some information. Sure. Just one more question before I go back in the queue that you could just give a sense of the expansion plans that Navi Mubai and Jay were about. When is it expected to operationalize and how our units will build up through the year.
Vikas Kapoor
Yeah. So you know in terms of dates I think you know what they publicly announced information we can use those airports particularly we can see that and probably refer to you. So we have currently in our system about we’re giving a broader perspective which may be helpful. We have about 70 outlets roughly under construction which includes Navi Mumbai and Noida. So these outlets actually in design construction phase as we speak in addition to the 491 outlets.
So you know we have about 454 travel QSR and 37 lounges. And you know that number, you know we have. So in addition to that 70 is over and above that, that’s those 491. So that’s currently in place. So both of these airports, I believe, are, are opening in this particular calendar year is what is called out, you know, from their date. So our constructions are well underway. Many of these outlets are even ready as we speak. And I think the dates of those airports, as those come live, those units will be trending. Probably in some degree of phasing, but. Yeah, but those would be coming online in the next few quarters.
Nihil Jaime
So got that. Thank you.
Varun Kapoor
Thank you so much.
Operator
Thank you. The next question is from the line of Vedant Rane from Unifi Capital. Please go ahead.
Vedant Rane
Hi sir. Congratulations on a good set of numbers. I just have one question. If it is possible to give a expiry date or expiry year of key contracts such as Delhi T3 or Airport Authority of India, where you have some airports.
Varun Kapoor
Hello. Yeah, hi. So just the question of some of the data we have, particularly while individual contract data, as you’d understand would be commercially sensitive, we had in the RHP called out some of this information particularly on contracts that was needed. It may be best to refer on specific contracts to the rfp. I think it has to the rhp. It has that specific details there.
Vedant Rane
Okay, sir, got it. And this one last question. So you know Delhi T3 is now under subsidiary. Is it possible that in future it will follow same trend at GMR jv? Like will it get converted into a jv?
Varun Kapoor
Just currently the entity. Just to clarify, it is under a subsidiary which is also a joint venture with, you know, with the airport operator there that contract when it comes up particularly because you know there will be different contracts there at that point in time. Maybe an evaluation one would do. But that currently it is operating under already a joint venture with the airport operator. So while it’s a subsidiary, it is a joint venture with the airport operator.
Vedant Rane
Okay, sir, got it. But the pad gets consolidated with your console pnl, right?
Vikas Kapoor
Yes, this is Vikas here. The PAD does get consolidated, but under the equity accounting method, the non owner share is kind of clarified as well in our results.
Vedant Rane
Right? Got it, sir. Thank you so much. All the best.
Varun Kapoor
Thank you.
Operator
Thank you. The next question is from the line of Akhilesh Batter from Ikea Assets. Please go ahead.
Akhilesh Batter
Hello. Hi team. Congratulations on a good set of results. I had two questions. First one mainly I just wanted to get some more color on the deceleration and profit flowing into jv. And how do you expect that to pan out for this year?
Varun Kapoor
Hi. If you could just repeat that again.
Akhilesh Batter
Yeah, so I just wanted some more color on the deceleration and profits flowing from jv. And how do you expect that to pan out for this year?
Varun Kapoor
And so maybe give me perspective. So the JVs as you know are in the process for us, as we called out in the RHP as well, in the process of mobilization and part of that mobilization many new units are being activated as would be evident in our system wide sales as well, growing out as well. So that perspective are the JVS currently where they’re at the cost?
The way it plays out is when we mobilize new units, we tend to have pre opening costs as well as it takes us roughly 12 to 18 months of operation for those units to operate at levels that we normally see in other units in terms of new outlets coming in, operating them efficiently, getting them up to the PAT levels, not that they may be breaking in earlier, but getting them to the required PAT levels that we see for the rest of the mature business. It takes a bit of time as a normal practice.
So most of the joint ventures, or all the joint ventures for that matter are in the state of heavy mobilizations as we speak. And that’s where part of the cost those would obviously as those come in, that profit would be on a trend of those costs decreasing. And that’s the direction there on those joint ventures.
Akhilesh Batter
Got it. Thank you. And just some more color on your international expansion. So how does it look like? How’s the ramp up going in the new airports and any color for this year or any future expansions that are in the pipeline?
Varun Kapoor
Sure. So in terms of we had over the last 12 months mobilized the lounge in Malaysia. We had also mobilized the lounge in Hong Kong as well over the last 12 months that business is trading. The business in both of these markets, like I said, is in relatively early days in terms of the period and trading strongly as well
. We continue to look at new opportunities, but by nature of our business, once we have the stage where we would have an opportunity, while we are constantly doing a business development program and efforts in markets, that’s part of our continuing strategy for this year as well as there are any wins and victories, we would be coming here. But there is quite a well organized and efficient effort being put in for those opportunities.
Akhilesh Batter
Got it. Thank you.
Operator
Thank you. A reminder to all the participants. You may press Star and one to ask questions. The next question is from the line of Arvind R from DAM Capital. Please go ahead.
Arvind R
Thank you for giving the opportunity. I have a couple of questions. Firstly, since airport lounge is your major business, major contributing to. Business and the contracts at some of the locations like Chennai and Kolkata are about to expire. So how do you foresee growth and is the business the majority of your business which is 50% from airport lounges, is that risk because of that?
Varun Kapoor
Hi. So in our by nature of our business and I referred to as well earlier, so we’ve been operating since 22009 in this sector and you know we have, we operate both guest travel QSR and lounges. Then obviously our breakup of that is quite evident. Roughly you could say about relatively equally from a system wide point of view in terms of our contracts. I think what has been, I think evident from the 2009 till now, a very important part of the business is contact retention.
So what we always would focus on, part of our business strategy is no doubt, yes, one part is net gains in business development which comes as at certain frequencies it tends to be lumpy. But retaining contracts is as much a part of development strategy. So we’ve had a retention rate in our business since 2009 of 94% of contracts. I think that’s evident to the ability to perform well.
This call is now being recorded as well as the long term relationships that we have with the airport partners. So we constantly have contracts coming up for renewal and us obviously having quite a bit good success at renewing the various contracts when they do come up for renewal.
Okay, just to add on that. So as your contract as Adani is also creating a partnership with the likes of lounge operators like Plaza Premium and as it is evident in the news as well that there’s some friction with Adani, with your partnership with Adamico. Do you want to comment on that?
So we have, I think what is evidence is our outlets under any joint venture are particularly called out. You know, that’s been part of our, you know, both the numbers that are there when we in the RHP as well as currently that we have in the business. So we have our footprint in the airport that I think you see from in terms of the LFL and the net gains account for any other stores which may be operated by any other partners or anything else.
So in any point of time we don’t say we have the full market in terms of that we put our market shares as well. I think I mentioned earlier as well, we have a 45% market share on lounges and roughly 26% on travel QSR. And what we have been seeing the general trend is we’ve been increasing our market share. So at no point see that being an overnight exercise but that is something that generally by we believe the strengths and our focus on this particular segment that has been happening in a steady and gradual manner, plus we operate in a sector that is itself growing. Going quite well. So I think that’s been our strategy going around. You know, we’re very clear that we operate a large amount of outlets and there’s an ecosystem. There’ll be different operators, different players. But I think we’ve been seeing consistently our market share which is part of our strategy as well, has been growing quite well. And plus as airports in India which are growing, grow larger, more airports come in the purview for what we would look at as opportunities. Because we tend to look at obviously the larger airports in terms of our product mix. What we do on lounges, what we do on premium travel. QSR as airports grow larger, they tend to be airports that we would look at in terms of taking our model to. So just to add on that the airport operators now are coming up with their lounges like at Bangalore D2 and GMR has placed. So I mean won’t they be able to make you go out of business if they come up with their own. Could you repeat the question? Your voice was a little muffled. If you don’t mind, say I will repeat again. I’m saying airport offices also with their own launches like at Bangalore Terminal 2. And GMR is also coming up with its own lounges. So how do you cover up that risk? I think so different airports have different players which may be doing individual lounge opportunities. I am not aware of GMR doing its own lounges. I don’t think that’s a reality. But I think there, for example the one in Delhi like the new One, I know at T1 is operated by NCAM so there would be different operators there which is very much part of the ecosystem and we would have market leadership. But nowhere do we say we have 100% the market that’s the opportunity of growth that’s there in any market. So those would no doubt operate in different markets there. But I think that information may be slightly incorrect in terms of there. But you’d have different lounges, could be done by different operators, could be joint ventures with the airport operators.
Operator
Hello, Mr. Arvind, is it Answer your question. If there is no response from the person we’ll move to the next. The next question is from the line of Dheeraj Mistry from ICIC Securities. Please go ahead.
Dheeraj Mistry
Yeah hi good evening sir and congratulation on good setup number. So one question regarding your no doubt your disclosure is better but the disclosure which you had in DRHP that in terms of revenue from the launch and QSR can you give that breakup for the quarter if you just give us.
Varun Kapoor
Sometimes you just look up so we can refer to that and answer your question. So Dheeraj, our overall breakdown between travel QSS and lounge for Q1FY26 is roughly around 50% via travel QS and around 46% via the lounges business. Got it. And what was that in the base year sir? So in the base year it would was on a similar plan roughly around 48% again in travel QSR and around 50% in the lounges section. So from that angle that’s where we have.
Yeah. And this you are talking on consolidated sale that is on system level sales or consolidated sales reported system wide sales because from all practical aspects we do monitor what we manage and operate at a system wide both the travel QSR and lounges because for that same services we do get also a management fee.
Dheeraj Mistry
Got it, got it. And since second question is regarding regarding your QSR business. So if we take a slightly longer or let’s say the over last five years period whatever what is your like for like growth and your if you can divide that between pricing growth and traffic led growth over the long term period so that it would be very helpful as an analyst to forecast the growth going ahead.
Varun Kapoor
So we may not have those numbers handy. We’re happy to engage if you could send that communication and we can probably get back to you particularly on that breakup over a longer period of time. But what is evidence is the last decade, you know we’ve seen those numbers we’ve had a consistent you know more than 20% CAGR. That’s with obviously Covid in between. But I think from point to point our kegger has been more than 20% in terms of our sales growth as well.
System wide plus PAT has been even larger than that. So that’s been the general trend on the business over a long period of time in terms of specific areas, you know carve out of that. If you’ll be able to reach out we could happy to engage with you and share some of that. We don’t have that handy for a longer period of time right now.
Dheeraj Mistry
Got it, got it. And the last question, the gross margin expansion, what we have seen during the quarter at the adjusted sale level, what are the reason for that? Is it purely the mix or is there any pricing element also in that?
Vikas Kapoor
Dheeraj, I will take this one. So the gross margin improvement is mainly due to the lower food inflation and efficient procurement strategies as I had called out coupled with that effective supply chain management which kind of lowered. The overall cogs. Additionally, because of the real estate and the volume that we manage, we have negotiated our annual contracts with suppliers effectively given the increase in scale of operations.
Dheeraj Mistry
Okay, okay, thank you. That’s it from my side.
Varun Kapoor
Thank you.
Operator
Thank you. The next question is from the line of Rahul Agarwal from Ikea Assets. Please go ahead.
Rahul Agarwal
Hi, good evening. This is Rahul from Ikigai Asset. Just continuing on the, you know, questions asked earlier on loan versus tsr, more on the growth trends, you know, next three years. If you can talk about how would you foresee your growth between these two formats, will it be similar or one would be higher or lower? And secondly on the same question from a return on investment perspective, what is more limited? That’s the first question.
Varun Kapoor
Yeah. Hi Rahul. So generally Rahul, I think from a perspective see a lot of the dynamics that drive passenger spending in airports tends to be passenger growth. Those tend to be quite common among both businesses. In our rhp. Particularly there’s a call out around the expected, I think the industry report over the next 10 years both are expected to grow quite similarly at a 20% CAGR over a 10 year period with I think lounges expected to go slightly more because the extra kick off credit card, other penetration, premiumization of airlines wide bodies, et cetera.
So those areas, but generally we see these have been quite similar in terms of the dynamics and the growth expected in both of these sectors. For us particularly obviously year on year you may get some opportunities in a particular year on travel QSL and lounges. So quarters and individual years you may have one going slightly above. But I think from a general trend structurally both are in quite a strong perspective. Consumers in both areas eating at airports want premium experiences at airports. So that I think generally is very evident to grow together.
I think for us probably the additional area is we’re also looking at lounges internationally as well. So over and above the current growth expectation in India we do see that as in the medium term an opportunity and a longer term opportunity on travel qsr, which we called out as well was the highway opportunity. The significant private and public investments happening on highways, we see that as an opportunity in the long term as that ramps up for us to take the travel QSR opportunity there as well. So those are additional drivers of growth we see for each of the segments.
Rahul Agarwal
Got it. And for both these formats because you’ve been operating both formats for a long time, would you just talk about bit of innovations or maybe some global benchmarks which you have tried to get to the Indian market. And how are you doing things differently purely from an operation perspective?
Varun Kapoor
Sure. Maybe I can touch on maybe one aspect for both. There are a list of things that maybe one one aspect I could address in the question. So, for example, in terms of the travel QSR. Side brands are a big part of our portfolio. You know what separates us from peers in the segment and makes TFs stand out is our brand relationship. So we currently have 130 brand relationships as of June end. Some of the ones I did allude to in the call, but maybe just reinforcing that again we had earlier we did Nando’s recently again a global leading brand. The first one, the airports in India, we did that at Delhi Terminal 3. We also are getting one of the world’s most prominent chefs, Gordon Ramsay. Two of his concepts will be launching shortly in India. So this is one going to be at Delhi Terminal 1 that’s launching shortly this month and then subsequently Mumbai Terminal 2 as well. Those brand relationships, the brands we get is a big separator that allows us to get incremental customer spend and also premiumization. You’re playing that opportunity which I think from an Indian consumer point of view, I think Indian consumers are more than ready for some of the concepts that are world leading. Premium and actually the demand sometimes I would think is actually more than most other parts of the world. Actually our consumer year is looking for those type of experiences. So I think that’s one. As a driver there we do see to drive upside. In addition on lounges there are various initiatives. But I think one thing we’re doing for example is we are increasing and cementing much more deeper our tie ups with our relationship, our lounge partners there. So we’ve actually developed technology, platform integrated one there ourselves through direct tie ups with our banking and credit card network partners where we can actually tie up directly. So it provides a much direct consumer and a seamless consumer experience. It doesn’t go through aggregators, intermediaries. It’s a direct tie up. Customer experience on the ground is much better. It’s an integrated single platform. It doesn’t matter what you have. It’s a much more seamless experience. We can address different cohorts depending on the card. You have an X card for this customer cohort versus Y. Because today lounges is one experience. But by having a direct tab, we can actually partner with our credit card networks and banking partners much deeper and create different experiences. Because we see the consumer directly, we can create different experiences for each credit card. Whether you have X card or Y card. The nature of the consumer for our partners we can create those and ultimately that is where we see an opportunity which also would be potentially margin accretive in the long term as well.
Rahul Agarwal
Got it. And just your comments on the return on investment for lounge versus qsr, Is there any difference or both are similar.
Varun Kapoor
So return on investment tends to be quite similar, because the way we approach this is the portfolio approach. You know, for us, we look at it not from a single brand. So sometimes we always say that, you know, even within lounge travel QSR versus lounges within travel qsr, there’s probably more variation than between travel QSR and lounger itself. Because within travel qsr, you have, you know, your normal QSR outlets, what you traditionally call in the high street, but you also have casual dine. You would also have in that, you know, where the bar concepts you would have you could have, you know, different, you know, varying different offers that could be there, you know, more sit down restaurant, grab and go, you know, various things. So I think. Within that sometimes you see more variation. But our general perspective is on the return on investment. We tend to look at portfolio approach. So it tends to be quite similar across both of these in terms of the investment versus what the return for us on ROC is.
Rahul Agarwal
Got it. And just one small last question on the revenue salience. Just from a risk perspective today if we talk about the India business for you, let’s say how is your revenue concentration? Like let’s say top three airports, top five or top ten maybe however you want to break down it, how is the revenue concentration for the business?
Varun Kapoor
So some of these details we had, I think they are specifically called out in the RHP in quite a bit of detail. I wouldn’t have it handy now but that would be the best place to look at because I think those particular things are called out in quite detail there.
Rahul Agarwal
Sure, I’ll refer to that. Thank you so much Varun and thanks. All the best for the rest of the year.
Varun Kapoor
Thank you, much appreciated.
Operator
Thank you. The next question is from the line of Akhil Parikh from bnk. Please go ahead.
Akhil Parikh
Thanks for the opportunity. My first question is on the margins front right, we are seeing a significant gain at EBITDA levels of 400 bits of jump on a yy basis. Do we see that margin gains what we have achieved in 1Q to be sustainable? Because historically we have been in range of 30 to 33% 38, 39% of EBITDA margin is sustainable going forward. That’s my first question.
Varun Kapoor
Hi Vikas here. So our EBITA margin like since we pride ourselves on our financial discipline in terms of as I had explained earlier in terms of procurement of goods we have been efficient in terms of managing our food inflation as well as entering into annual tenders which has brought down our cogs down and that has given us a certain uptake in terms of this we believe the gross margin to be in a range bound manner of around 80 to 82%
Throughout the year and further to that the EBITDA margin is also in terms of the fiscal discipline that we have done in other expenses as well as the contract management part which has improved the overall ebitda. So we believe it to be a sustainable margin gain which should be there throughout the year as we proceed. That’s really good to hear. Second, would it be possible for you to share the profitability JV wise for the quarter or at least give some color which of the JVs have performed better? We did around 8 crore of that’s the contribution to TFs from the JV at that level across the. Three JVs if it’s possible to share. So two things, Akhil, since we operate both the JV and associates as well as our own business in the same manner. So the endeavor is always to improve on the margin profile as we go. But as you would appreciate that we are mobilizing quite a bit of units as Varun and I have spoken at the start in the JVS and Associates as well. What I can give you a bit of color is more in terms of the sales of the JV and Associates. If that is fine from your perspective.
Akhil Parikh
Yeah, that would be helpful. So roughly if you look at it from an overall perspective, since our own consolidated numbers were roughly around 3.75 billion and JVs and Associates kind of formed roughly around 3.4 billion out of which roughly around 2 billion is what we have seen from our JVS with under Semolina Kitchens and overall the rest with the other partners. Okay, sure, this is helpful. And third and last question, just a clarity in terms of the differential between the LFL group system wide SHG is 13% while console is 6%. So it’s right to assume, right.
Varun Kapoor
The JVs, I mean the airports under the newly formed JVS have performed better in terms of LFL growth compared to the non JV airports. Yes, that would be correct assumption. So some of those airports, you know, which and I didn’t mention when I was in the call, so some of those airports off, you know, during this moderation, like you had Delhi, you had Calcutta, you had goa, which probably form a larger proportion of the consolidated, those showed a bit of softness versus the others. Obviously temporary but there. So you can see that’s why the slight difference in consoled versus system wide and many of the system wide units also trading relatively new in their first year. So you know, all of those coupled together is where you see that slight, you see that difference of LFL and system wide versus console.
Akhil Parikh
Okay, great. That’s all from my friend and best wishes for coming quarters. Thank you.
Operator
Thank you. The next question is from the line of Jaya Doshi from Kotak Securities. Please go ahead.
Jaya Doshi
Hi. Thanks for the follow up opportunity. You know you did mention about Direct direct dealing with credit card issuers. Could you tell us at this point of time, you know, among your key credit card customers, with whom are you dealing directly and what is the extent of benefit? You know, typically you acre when you go from a, you know, dealing through intermediaries to directly.
Varun Kapoor
Yeah, I get so. You know, we are currently doing this exercise which we do see to your point, directly we do see. Obviously there will be other points. You know, we see margin accretive but you know, we do see the other points about primary reasons of doing it is a better customer experience as well as, you know, it addresses multiple cohorts, right. You know, saying different card levels, you have customized solutions. So I think on various fronts it is a positive for the business. We are currently in the exercise of few accounts have been. We are working with for example directly we have American Express which is now working with us directly there. In the previous quarter we have, we also this quarter we are currently in the process. So ICICI bank and Access bank already directly working. IndusInd is working directly and other banks. You know, it’s a process we’re creating. You know, this technology platform is performing extremely well. We working plus we’re seeing the benefits on other fronts as well. And currently since we’re in the exercise, probably the numbers will be clear post the completion of this process. I think at the right time we’ll share that relevant information and be evident in the numbers as well. But I think the trend is very much a positive trend that’s there.
Jaya Doshi
And last one is, are you evaluating any opportunities, international opportunities that can sort of materialize and have a meaningful benefit for you anytime in this financial year?
Varun Kapoor
Yes, it’s a continuous process. We’re doing so. Asia, PAC and the Middle east are areas we’re looking at for opportunities. We have teams actually working on that even based out of the country and looking at those opportunities. Because of the nature of these opportunities, once you obviously don’t want that going out. These are commercially sensitive. So there is work no doubt maybe answering your question. But as they materialize and as we see our business development efforts come together, we should no doubt share that and put that forward. But yes, you know, coming from the success in Malaysia and Hong Kong, getting in those opportunities, there are similar other opportunities which we are actively working on part of a continuing exercise like we do in India internationally as well. The same efforts.
Jaya Doshi
Sure. Thank you so much.
Operator
Thank you, Jay. Thank you ladies and gentlemen. As that was the last question for the day, I would now hand the conference over to the management for the closing comments. Over to you, sir.
Varun Kapoor
Right, thank you very much. So we do appreciate all of you taking the time today to join us at TFS for our first earnings call post listing and hearing us patiently. And at the same time, if you have any further queries, please feel free to reach out to our investor relations team as well. So wish you all good evening and good night. Thank you.
Operator
Thank you. On behalf of ICIC securities limited that concludes this conference. Thank you. Thank you for joining us. And you may now disconnect your lines. Thank you.