Earnings Outlook
Indian Hotels earnings seen robust on higher occupancy
This story was originally published at 21:15 IST on 6 November 2024
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By Arya S. Biju
MUMBAI – A strong wedding season, healthy corporate demand, higher occupancy and pent-up demand from the June quarter due to extreme heat and elections are expected to help Indian Hotels Co. Ltd., owner of the Taj brand of hotels, report robust earnings for the September quarter, analysts said.
The company's consolidated net profit for the September quarter is expected to grow 52% on year to INR 2.54 billion, according to an average of estimates from 10 brokerages. The hospitality company's top line for the quarter is seen at INR 17.07 billion, up 19% on year, according to the average of estimates. Sequentially, the company's net profit is expected to increase 2.3% from INR 2.48 billion. The top line is seen increasing 10.1% from INR 15.50 billion in the previous quarter.
Brokerage Antique Stock Broking Ltd. had the highest estimate for the company's net profit at INR 3.03 billion, while Elara Securities (India) Pvt. Ltd. had the lowest estimate at INR 2.15 billion. The highest estimate for the company's net sales was INR 18.17 billion by Motilal Oswal Financial Services Ltd. and the lowest was INR 15.75 billion by Elara Securities.
The company's earnings for the quarter are expected to be aided by a 7% on-year growth in average room rates and a sequential growth in occupancy, Kotak Institutional Equities said in an earnings preview report. Brokerage Nuvama Wealth Management Ltd. expects better profitability for the company in the September quarter owing to lower losses in its international subsidiaries.
The net sales growth in the September quarter is expected to be driven by higher revenue per available room for owned hotels, higher management fees, and new businesses, brokerage IDBI Capital Market Services Ltd. said. Analysts expect the on-year growth in revenue per available room of the company to be in the range of 8% to 11% on a standalone basis, driven by high single-digit on-year growth in average room rate and an increase in occupancy.
Indian Hotels is expected to report earnings before interest, tax, depreciation, and amortisation of INR 4.66 billion for the September quarter, according to the average of estimates from eight brokerages. The hospitality provider reported a consolidated EBITDA of INR 4.02 billion in the year-ago period.
Analysts recommend investors to watch out for updates on new businesses, the outlook on international business and the domestic leisure segment, as well as the wedding season and overall demand. Comments on demand in key markets, improvement in occupancy and average room rate will also be monitored, analysts said.
The company is scheduled to report its earnings for the September quarter on Thursday. On Wednesday, shares of Indian Hotels ended at INR 684.65 on the National Stock Exchange, up 2.5%.
Following are the Jul-Sept earnings estimates for Indian Hotels based on reports from 10 brokerage houses (in INR million):
| Brokerage firm | Net Sales | Net Profit | EBITDA |
| Anand Rathi Share and Stock Brokers Ltd. | 16,195.00 | 2,541.00 | -- |
| Antique Stock Broking Ltd. | 18,005.00 | 3,028.00 | 5,131.00 |
| Axis Securities Ltd. | 17,290.00 | 2,700.00 | 4,500.00 |
| Elara Securities (India) Pvt Ltd. | 15,746.00 | 2,154.00 | 4,115.00 |
| IDBI Capital Market Services Ltd. | 17,440.00 | 2,434.00 | 4,624.00 |
| Kotak Institutional Equities | 15,887.00 | 2,456.00 | 4,739.00 |
| Motilal Oswal Financial Services Ltd. | 18,172.00 | 2,458.00 | 4,949.00 |
| Nirmal Bang Equities Pvt Ltd. | 16,625.00 | 2,437.00 | 4,372.00 |
| Nuvama Wealth Management Ltd. | 17,636.00 | 2,662.00 | 4,817.00 |
| Sharekhan Ltd. | 17,670.00 | 2,530.00 | -- |
| Average | 17,066.60 | 2,540.00 | 4,655.88 |
End
Edited by Saji George Titus
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