IHCL: On track to be most profitable in S Asia by 2025 | The Financial Express

IHCL: On track to be most profitable in S Asia by 2025

In May, the Tata group company had announced plans to expand its portfolio of hotels to 300, achieve Ebitda margins of 33% and get a 35% Ebitda share contribution from new businesses and management fees by FY25-26.

IHCL: On track to be most profitable in S Asia by 2025
IHLC’s growth strategy under which the company that runs the Taj Hotels chain intended to restructure its portfolio. (Representational image)

Indian Hotels Company’s (IHCL) plans to emerge as the “most iconic and most profitable” company in South Asia by 2025 is on track, according to a top official. In May, the Tata group company had announced plans to expand its portfolio of hotels to 300, achieve Ebitda margins of 33% and get a 35% Ebitda share contribution from new businesses and management fees by FY25-26. Further, the company would also have 125 Ginger hotels. These were the company’s guidance under ‘Ahvaan 2025’, IHLC’s growth strategy under which the company that runs the Taj Hotels chain intended to restructure its portfolio.

“The guidance was for our traditional and new businesses and we are on track. Our traditional businesses are benefiting from the return in demand because the operating leverage is giving a good absolute return and the new businesses are helping in margin expansion. Under the new initiatives, we also count asset management initiatives, meaning our existing assets when we renovate, we do it keeping in mind how to drive best value from these…” Puneet Chhatwal, managing director and CEO of IHCL, told FE during an interaction.

Also read| Indian Hotels on track to achieve 300 hotels mark by 2025

“We expect our growth to be either in line or ahead of the sector because we’re the largest hospitality ecosystem of India,” he said, adding that the growth in the sector which was impacted by the pandemic is now back. “The industry demonstrates resilience, and it will be one of the main drivers of employment going forward,” Chhatwal, who is also the president of the Hotel Association of India, said.

Also read| IHCL Q1 consolidated PAT at Rs 170 cr

For IHCL, the backbone of growth would continue to be Taj. “Taj is what defines us, Taj is our DNA. But it is also important to build other businesses over the next 50-100 years.”The company’s hotel chain brand, Ginger, quick services restaurant concept Qmin, and branded homestay portfolio amã Stays & Trails, and Vivanta and SeleQtions hotel are all “doing well”, even as the company has plans to scale them up.

IHCL posted a consolidated net profit of Rs 122 crore during the quarter ended September, compared with a net loss of 121 crore recorded during the comparable year-ago period. During the reporting quarter, the firm’s revenues rose 67% to1,258 crore and Ebitda rose 230% to Rs 319 crore from the same period a year ago. At present, IHCL has a total of 247 hotels.

“The growth is coming in from both our traditional business and new businesses,” Chhatwal said.Qmin scaled to a total of 25 retail outlets, while its app-based delivery services are now available in 21 cities in the country, while amã Stays had scaled up to a total portfolio of 100 bungalows.

IHCL, which launched Loya (a new Indian-concept F&B brand) in October at Taj Palace, New Delhi, intends to expand it to Mumbai, Bengaluru and other cities and overseas geographies. The company also introduced Milan-based Italian restaurant, Paper Moon, at Taj Fort Aguada Resort & Spa in Goa this month. In the first half of this financial year, Ginger posted an Ebitda margin of 39%, driven by a revenue of Rs 143 crore, a 42% growth over pre-Covid.

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First published on: 11-11-2022 at 07:21 IST