Although Leicester and Loughborough in the UK are only 11 miles apart, a journey between the two has become legendary since Thomas Cook took a group on a train trip in 1841. This tour was the genesis of his travel company, which was founded in the 1860s and expanded to India in 1881. Since then, the company that bears his name has witnessed a massive growth in travel, with the industry modernising and globalising as millions of people ventured to far-flung places.
Only a few years ago it would have been unimaginable that all of this would grind to a halt. Yet that is exactly what happened during the pandemic, and in 2020 even the journey between Leicester and Loughborough would have seemed impossible.
India, like many other countries, went into lockdown in March 2020. And the economic impact was immediate. In crisis times like these, “Travel is the first to take a hit,” says Amit Baraskar, Vice President and Head – Treasury, Thomas Cook (India) Limited (TCIL). And for a company that is firmly planted in the travel industry, the company was hit hard, and its treasury team had to pull out all the stops to ensure that the company could continue to operate in such a tough environment.
For Baraskar and his team, the pressure was on. The situation they found themselves could be likened to a movie plot where the team must band together to face an external threat and challenges that seem insurmountable.
Impact of Covid in India
India was hit particularly hard by the pandemic and had one of the highest numbers of fatalities in the world. According to official figures published by the World Health Organisation, the number of deaths from Covid stands at 532,000, although some news reports suggest the figure could be far higher.
As well as the human tragedy that Covid brought, the country also suffered the economic impact as it went into lockdown. Earlier, in 2019, India’s Prime Minister Narendra Modi had laid out his vision for India to become a US$5trn economy by 2025. “Covid shattered that dream,” comments Baraskar. Despite this, however, “We bounced back very fast,” and now India is back on track to achieve that goal.
Likewise, TCIL also recovered. After experiencing a dramatic decrease in its business – as travel dropped to near zero levels – the company has bounced back. And in some respects, the company has bounced beyond where it was pre-Covid.
Getting the rating back
One of the issues that Baraskar faced during the pandemic was the company’s credit rating. Given the dramatic drop in travel, CRISIL – the Indian ratings agency that is a subsidiary of S&P Global – had downgraded TCIL. Baraskar was part of the team that worked hard to ensure the company did what it needed to get its rating back to where it was before the pandemic. Recently, in October 2023, it was announced that CRISIL had upgraded TCIL to AA-/Stable for its long-term rating and A1+/Stable for its short-term rating. CRISIL noted in a statement that, “The upgrade in ratings reflects better-than-expected scale-up in revenue and expectations of the same being sustained over the medium term supported by revival in demand post pandemic induced disruptions over fiscals 2021 and 2022 and structural reduction in cost resulting in better margins and return on capital employed.”
Baraskar notes that the ratings upgrade also came as a result of stability in the senior management at TCIL – which has remained unchanged throughout Covid. Also, TCIL enjoyed the support of its parent company, Fairfax Financial Holdings, which was founded by Indian Canadian billionaire Prem Watsa. In March 2021, TCIL received a Rs.436 crore (approximately US$60m) infusion into the company, which has since been converted to equity.
These days, Fairfax Financial Holdings holds 72.34% stake in Thomas Cook (India) Ltd. (TCIL is an independent and separate company from the UK-based Thomas Cook Plc, which sold its stake in TCIL to Fairfax in 2012.)
Baraskar points to how TCIL has recovered in a number of segments, showing healthy growth – with an EBITDA [earnings before interest, taxes, depreciation and amortisation] of US$18m compared to US$7m for the same quarter the year before in June 2022. This is a clear indication of how the business has bounced back since the days of the pandemic – even bouncing beyond.
The foreign exchange business, for example, is now 106% of what it was before the pandemic; meanwhile the destination management services are 104% of what they were, while resorts are 149%. Such healthy results come with a virtuous circle; now the company has had a ratings upgrade, it has cheaper access to funding, which in turn improves its margins further.
Priorities during Covid
During the pandemic, one of Baraskar’s key tasks was to maintain the company’s banking relationships and ensure their ongoing support, which his team was able to secure. He notes that the local Indian banks were particularly supportive.
Amid the drama of the pandemic, Baraskar talks about another priority he and his team had: “One more critical priority for the team was protecting and preserving cash and monitoring it every day.” That rhythm has now moved to every week. Another focus has been ensuring that the company has net zero interest – ie the interest it pays on its loans is less than the interest the company is earning on investments. “We achieved net zero interest in June 2023,” Baraskar says of TCIL.
Throughout Covid we started regular interaction with the senior management and that brought us close together and so our thinking and approach got in sync.
Bolstering the team
After going through the experience of the pandemic, where there was so much uncertainty and pressure because of the dramatic drop in travel, Baraskar has been able to take some key life lessons he can apply to his regular life now that business is back to normal.
Baraskar says that the one of the biggest lessons he learned was with communication and how teams interacted. “We started tackling problems as one single integrated unit and team, irrespective of departments and siloes,” he says. As part of this, Baraskar had access to some heavyweight mentors who, because of their influence and experience, were able to guide Baraskar and his team through this particularly challenging time.
Baraskar had access to a number of senior leaders at TCIL who were able to advise him, and these include Madhavan Menon, the Executive Chairman of TCIL, and Mahesh Iyer, the company’s Managing Director and Chief Executive Officer, as well as TCIL Group Chief Financial Officer Debasis Nandy. He speaks highly of them and comments how they are clear thinkers who supported him through the toughest challenges of the pandemic.
Baraskar also sings the praises of his team and is keen to give them all an honourable mention, along with their skills and talents. His team, he notes includes the “unstoppable” Rahul and his colleagues who were like a “problem-solving machine”. He praises Swati for keeping the team united and also notes the skills and dedication of those who handle the reporting and the foreign exchange funds management. He focuses on how the team was able to pull together: “It’s like the movie the Avengers,” Baraskar says, referring to the film where the heroes band together in the face of the evil powers of Loki and his army.
The treasury version of this during the pandemic was fighting hard to maintain the company’s banking facilities. “It was a genuine challenge,” says Baraskar. And when the business did start bouncing back as borders reopened and people started travelling again, the treasury team had to work at an accelerated pace to keep on top of the rapid ramp up in business. “Speed was of the essence,” he says. “I think we did a good job.”
Commenting on the teamwork, combined with the leadership and guidance of some heavyweight business leaders, Baraskar says: “Now we are ready to take on any problem or challenge – that is the level of confidence we now have as a team.”
Personal growth and development
Facing challenges, as well as being fast and agile, extend to Baraskar’s personal life where he is a keen athlete. Formerly a champion high jumper, these days he is in training for the 100-metre sprint. “I aspire to be the fastest person in the state of Maharashtra for my age group,” he says. These efforts are also helped by him becoming a Certified Sports Nutritionist, a qualification he gained from the US-based International Fitness Association during Covid.
Baraskar has also developed professionally as a result of his experiences during the pandemic. When asked about his personal growth and development and what has changed, he said he has had a couple of learnings. The first, he notes, is related to stress and how to handle it in high-pressure situations. Also, he says, time management skills really came into focus for him during this time. “Because the amount of stress was enormous in the Covid period, we are now much more equipped to deal with challenges. Now any problem that comes our way, even if relatively-large doesn’t seem so difficult since we have gone through that – most things are now a cinch,” he jokes.
On a professional level, the access he had to his senior leaders gave him insight into navigating crises and how to manage stressful situations. “Throughout Covid we started regular interaction with the senior management and that brought us close together and so our thinking and approach got in sync.” Many of the meetings and interactions with these senior leaders were focused on the banking strategy and what the best course of action was given the extreme nature of the situation they found themselves in.
When asked what he learned most from his mentors, he says that working shoulder-to-shoulder with them – and not merely observing from a distance – meant that he really learned the meaning of tenacity. “I learned from them not to give up,” he says, adding that if there is an insurmountable problem that he is now faced with, he has learned to keep escalating, to keep fighting and not give up. This kind of tenacity has since served him well and is something he can also apply to his athletics career outside the office.
Aside from the resilience and tenacity of the senior leaders, Baraskar learned other lessons from his mentors. “The second learning I had from the management team was motivating people in unpleasant circumstances and how to stay motivated while at the same time also motivating the teams. I learned how to become a single unit and work together and fight it out,” he says.
Although in recent years Baraskar has worked in stressful situations, he is keen to highlight the importance of having fun and some kind of relief from the hard work. He notes that his team works very hard and long hours – something that is not unusual among corporate treasurers in India. His team’s responsibility starts with the markets opening in Japan, Singapore and Australia, and then it ends with the markets closing in the US and Canada, which makes it a long day for all concerned. He adds that some members of his team have to work all weekend because of certain reporting requirements. He comments that it is important for teams working in this kind of environment to have some kind of release valve so the pressure doesn’t get too much.
India also bounces back
The economic environment that Indian corporate treasurers now find themselves in is at least more favourable than it was a few years ago. Although Modi’s 2019 dream of India becoming a US$5trn economy was shattered by Covid, that vision is now looking like it could be a reality in the coming years. India’s prospects are looking hopeful and Baraskar cites estimates that put India on track to be the third-largest economy in the world by 2028 – with India overtaking Germany in 2027 and Japan in 2028.
Also, says Baraskar, India is becoming more of a force on the global stage. He points to a recent speech that the Leader of the House Piyush Goyal made on a diplomatic visit to France where he highlighted the opportunities of the Indian economy and how India is a trusted partner for many countries around the world. “Slowly and steadily, India is becoming a world leader,” comments Baraskar. With Modi’s vision for the economy, India’s corporates will play a key role in fulfilling the country’s ambitions. Baraskar comments that corporate treasurers will be crucial and they have an important part to play in ensuring the sustainability of India’s economy. “It’s an exciting time for India and for corporate treasurers in India to take a critical role,” he concludes.