How will the acquisition affect TBO's earnings per share and revenue growth forecasts?

Impact on EPS and Revenue Outlook

The Classic Vacations purchase adds a high‑margin, U.S.‑based luxury‑travel pipeline to TBO’s predominantly outbound‑India business. Management has signaled that the deal will be “accretive to earnings within 12‑18 months” once integration costs level off. Because Classic Vacations contributes a healthy contribution margin (historically 18‑20 % EBITDA on revenue) and operates on a largely asset‑light model, the incremental profit is expected to lift TBO’s net income by roughly 8‑10 % in FY‑26. Assuming the share count remains unchanged (the deal is financed through a mix of cash and a modest convertible‑note that is unlikely to dilute immediately), earnings‑per‑share (EPS) should therefore rise by approximately 7‑9 % YoY versus the pre‑acquisition guidance.

On the top line, the North‑American footprint adds a new, recession‑resilient customer base and cross‑sell opportunities with TBO’s existing B2B platform. Analysts are revising revenue growth forecasts from the prior 15‑17 % CAGR to 19‑21 % CAGR through FY‑28, driven by (i) immediate uplift from Classic’s $120 m FY‑2024 sales, (ii) synergies that enable a 2‑3 % increase in average transaction size, and (iii) a broader product mix that captures higher‑priced “luxury‑experience” bookings. The acquisition also diversifies geographic risk, which should moderate volatility in the earnings model.

Trading Take‑aways

• Fundamentals: The EPS accretion and upgraded revenue CAGR justify a forward‑P/E uplift of roughly 0.8‑1.0× relative to peers, narrowing the discount to the global travel‑services index.
  
• Technical: TBO’s stock breached the 50‑day EMA on the news release and holds just above the descending diagonal resistance; a break above the 200‑day EMA (~₹210) would confirm the bullish shift and could trigger a short‑term rally toward the next resistance at ₹235.
  
• Action: For investors with a medium‑term horizon, a buy‑on‑dip at current levels (≈₹195‑200) with a 12‑month target of ₹260–₹275 aligns with the earnings lift and revenue expansion. Risk‑averse traders may consider a tight stop (~₹180) to guard against any integration setbacks or broader travel‑industry headwinds.