Earnings Outlook
More weddings, festivals to drive Indian Hotels' earnings
This story was originally published at 11:08 IST on 16 January 2025
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By Steffy Maria Paul
MUMBAI – The December quarter is expected to have been positive for Indian Hotels Co. Ltd., the hospitality company which manages the Taj chain of hotels, on account of seasonality, festivals, a higher number of weddings compared to the previous quarter, and a rise in business travel. Further, strong traction in its key domestic markets such as Mumbai, Delhi, Hyderabad, and Bengaluru was supported by its international subsidiaries, analysts said.
Indian Hotels Co. is expected to post a consolidated net profit of INR 5.73 billion for the December quarter, up around 27% on year, according to the average of estimates from nine brokerages. The company is expected to post consolidated revenues of INR 24.15 billion during the quarter, up 23% on year. Sequentially, the company's consolidated net profit is expected to rise 3.3% and its revenue is expected to jump 32.3%.
The highest estimate for consolidated net profit of INR 6.28 billion was from Mirae Asset Sharekhan Ltd., and the lowest estimate of INR 4.77 billion was from IDBI Capital Market Services Ltd. Elara Securities (India) Pvt. Ltd. gave the highest estimate for consolidated revenue at INR 25.66 billion, while the lowest estimate was given by Kotak Institutional Equities and was INR 21.22 billion.
The consolidation of TajSATs Air Catering Ltd. is expected to add 14-15% to the company's top-line growth, Nuvama Institutional Equities said. Including the TajSATs business, Nuvama expects the company's consolidated revenue to grow 26% on year. The numbers for the year-ago quarter did not include the earnings of TajSATs Air Catering, which was fully consolidated with the company in the September quarter. IDBI Capital expects the company's sales to rise only 16%, led by new businesses, higher revenue per available room for owned hotels, and higher management fees.
Nuvama expects the company's net profit to rise 34% on year on the back of lower interest and depreciation costs and higher other income. In contrast, IDBI Capital expects profit to remain flat during the quarter. Nuvama expects the company's standalone business will see a like-for-like growth of 13% in revenue per available room over the year-ago quarter.
Indian Hotels is expected to report earnings before interest, tax, depreciation, and amortisation of INR 9.04 billion for the December quarter, according to the average of estimates from seven brokerages. The EBITDA is expected to be in the range of INR 7.63 billion to INR 10.14 billion.
The company's EBITDA growth is expected to remain lower, rising 24% on year, due to the lower margin profile of TajSats, Nuvama said. EBITDA growth was expected at 39.7% and 33.5% by Motilal Oswal Financial Services Ltd. and IDBI Capital, respectively.
Brokerages said demand in key markets and an improvement in occupancy and average room rate will be the key areas to watch. Investors would also watch out for the company's outlook on international and new businesses, the domestic leisure segment, the wedding season, and overall demand for 2024-25 (Apr-Mar) and FY26.
The country's largest hospitality company by market capitalisation will announce its earnings for the December quarter on Friday. At 0958 IST, shares of the company traded at INR 811 on the National Stock Exchange, down 0.1%.
Following are the Oct-Dec earnings estimates for Indian Hotels based on reports from nine brokerage firms in the descending order by the estimate of net profit:
Brokerage firm | Net Sales | Net Profit | EBITDA |
----------(In INR million)-------- | |||
Sharekhan Ltd. | 25,140.00 | 6,280.00 | -- |
Dolat Capital Market Pvt Ltd. | 25,581.00 | 6,248.00 | 9,525.00 |
Elara Securities (India) Pvt. Ltd. | 25,662.00 | 6,032.00 | 10,140.00 |
Motilal Oswal Financial Services Ltd. | 25,088.00 | 5,967.00 | 9,954.00 |
JM Financial Institutional Securities Pvt. Ltd. | 24,402.00 | 5,911.00 | 9,151.00 |
Nuvama Wealth Management Ltd. | 24,666.00 | 5,868.00 | 9,117.00 |
Anand Rathi Share and Stock Brokers Ltd. | 22,854.00 | 5,564.00 | -- |
Kotak Institutional Equities | 21,217.00 | 4,895.00 | 7,729.00 |
IDBI Capital Market Services Ltd. | 22,781.00 | 4,773.00 | 7,631.00 |
Average | 24,154.56 | 5,726.44 | 9,035.29 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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