Indian Hotels Company (IHCL), one of India’s biggest hotel companies, saw its net profit rise 19% year-on-year to Rs 296 crore in the June quarter, driven by strong growth in revenues.
Strong Revenue Performance
The Mumbai-based Tata group company saw its consolidated revenue from operations jump 32% y-o-y to Rs 2,041 crore. Operating Ebitda (earning before interest, tax, depreciation and amortisation) margin stood at 28.3%, down 0.8% y-o-y.
The company missed the Bloomberg net profit estimate of Rs 321 crore but beat the revenue estimate of Rs 1,976 crore.
Puneet Chhatwal, Managing Director & CEO, IHCL, said, “The sector faced multiple headwinds in Q1. The Pahalgam attack followed by the Israel-Iran conflict led to partial air closures resulting in hotel bookings cancellations. But we outperformed the industry.”
The company said that the impact due to the cancellations due to operation Sindoor and flight disruptions in June resulted in 2-2.5% revenue growth compromise.
Its RevPar (revenue per available room) rose 13% (y-o-y) to Rs 13,000 at the consolidated level and 11% (y-o-y) growth domestically to Rs 9,800. International revpar also increased by 13% (y-o-y) to $371.
Taj, Claridges Collections, Seleqtions, Gateway, Vivanta, Tree of Life and Ginger are the brands controlled by IHCL.
Taj Sats, the air catering business took the hit due to airport closures and flight disruptions. Airport levy resulted in margins getting impacted by 200-300 basis points.
IHCL will invest Rs 1,200 crore in FY26 towards renovation, assets under construction and for digital initiatives. The company signed 12 properties taking the portfolio to more than 390 hotels and opened six new hotels during the quarter. It has 249 operational properties and 143 in the pipeline.
Outlook for Q2
“Overall outlook remains robust for Q2. We remain optimistic for double digit revenue growth driven by MICE (meetings, incentives, conferences and exhibitions) activity and a very strong demand from diplomatic visits,” Chhatwal added in a post earnings call.