Indian Hotels Company (IHCL), the operator of Taj brand of hotels, has posted a 37.3% rise in consolidated net profit at ₹167 crore, beating street estimates, buoyant on rise in occupancy and room rates. In comparison, the Tata group company had recorded a net profit of ₹122 crore during the same period of the previous fiscal.
During the reporting quarter, IHCL’s revenue rose 16.3% to ₹1,433 crore from ₹1,233 crore posted during the year-ago period, while Earnings before interest, taxes, depreciation, and amortization (Ebitda) rose 20.7% to ₹355 crore, it said in a statement.
A consensus estimate of Bloomberg analysts was expecting the firm to post a consolidated net profit of ₹172 crore on revenue of ₹1,450 crore and Ebitda of ₹364 crore.
“Driven by consistent double-digit growth, IHCL generated a system-wide revenue of ₹2,687 crore, which was 1.8 times of our consolidated revenue. This reflects the successful execution of our strategy to build a balance between owned/leased and managed hotels and leverage the diversified brand portfolio across over 125 locations,” IHCL managing director & CEO Puneet Chhatwal said.
“We opened eight hotels and signed 17 more in the first half of the fiscal, thereby maintaining an industry-leading pipeline of 82 hotels. India’s economic momentum coupled with higher consumer spends augurs well for the industry. Business on the books remains strong and the company is well-positioned for the traditionally stronger second-half of the financial year,” he added.
IHLC acquired 259,000 shares (6.80% of paid-up share capital) of its subsidiary Piem Hotels held by New Vernon Private Equity through a combination of share swap and cash. IHCL also bought 10,718 shares of Piem Hotels held by Tata Investment Corporation (TICL) (0.28%) by way of a share swap.
During the reporting quarter, a demand buoyancy in the international portfolio led to an occupancy of 64%, resulting in a Revenue Per Available Room (RevPAR) growth of 8% over the previous year. The management fee income grew by 14% over the previous year.
Deepika Rao, executive vice president (new businesses and hotel openings) said that the IHCL signed six agreements in Q2, of which two were operating leases and the remaining management contracts.
During the quarter, IHCL opened three new hotels taking the total number of hotels under operations across brands to 192, which excludes 75 amã Stays & Trails.
“The third-quarter is a seasonally strong quarter for the sector, with the festival and holiday seasons leading to increase in room bookings, while corporate travel is also expected to rise. This would be further helped by the wedding season,” she added.