Q&A: Madhavan Menon, MD, Thomas Cook India

'We have no plans to exit foreign exchange business'

Tour operator Thomas Cook India’s managing director Madhavan Menon is in a fire-fighting mode after parent company Thomas Cook Plc’s stock fell 70 per cent on London Stock Exchange. Thomas Cook India notched a Rs 24-crore profit in July-September quarter, but the panic reaction saw the company’s stock crash on Bombay Stock Exchange (BSE) in last two days. He shares with Aneesh Phadnis the company’s business plans. Edited excerpts:

Why do you say Thomas Cook Plc’s problems will not impact the Indian operations?
There are no financial interdependencies between Thomas Cook Plc and us. There is no pooling of funds. We handle their customers (inbound foreign tourists), but that makes up only 0.5 per cent of our total revenue. We pay them licence fee and dividends, but overall our commercial relationship is inconsequential. There will be no impact on our operations. Our business models too are different.

 

There is a buzz that the parent company that owns 77 per cent in Thomas Cook India may sell its stake to raise funds.
Putting up share holding for sale is one of the options. However, I am not aware of any such development. I do not want to comment on the parent company’s strategy.

Will Thomas Cook Plc’s problems affect your fund-raising and expansion in India?
We do not have expansion plans outside the country. There is enough scope for expansion in India. We have offices in 79 cities, and are looking to increase our presence to 100 cities. We are looking to expand our e-business channel. At the moment, there are no fund-raising plans. We have enough accruals for our expansion. We are not looking at any acquisitions.

There were reports about Thomas Cook selling its foreign exchange business.
Thomas Cook India is not selling its foreign exchange business. Foreign exchange contributes 65 per cent of our revenue. We have 50 per cent market share in the business. It is growing at 9-10 per cent rate. There were reports in the British press about parent company selling its foreign exchange business, but we do not have such plans.

Foreign tourist arrival grew last year. Do you see an impact this year because of economic crisis in Europe?
Inbound business will face challenges because of economic problems in Europe, which is our main source market. There could be a drop in numbers. However, a weakened rupee has negated that impact.

What is business outlook for next quarter?
The demand for travel products is good. Outbound tours grew 40 per cent this year, and trends for winter are good. There will be an improvement in our performance compared to previous period.