Analyst Concall
Indian Hotels sure about double-digit revenue growth Jan-Mar
This story was originally published at 21:33 IST on 17 January 2025
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--Indian Hotels: Large-scale events to drive Jan-Mar revenue growth
--CONTEXT: Comments by Indian Hotels mgmt at post-earnings analyst call
--Indian Hotels: Well on track to meet target of opening 25 new hotels FY25
--Indian Hotels: Occupancy of 78% in Oct-Dec very high
--Indian Hotels: Current occupancy rate high, don't see it going up further
--Indian Hotels: Foreign tourist occupancy still lower than pre-Covid level
--Indian Hotels: Did not see any slowdown in demand in Dec
--Indian Hotels: London hotel ops growth not along expected lines
--Indian Hotels: Not keen on franchise model for hotel business for now
MUMBAI – An extended wedding season and largescale events lined up in the country are expected to help Indian Hotels Co. Ltd. achieve double-digit revenue growth in Jan-Mar, the company's management said in a post-earnings conference call on Friday. The company is on track to meet the target of 25 new hotel launches in 2024-25 (Apr-Mar) and has already opened 20 new hotels as of December.
The company reported a higher-than-expected consolidated net profit INR 5.82 billion for the December quarter, up nearly 29% on year, driven by 78% occupancy in its international portfolio and 13% rise in revenue per available room. The on-year growth in revenue in the latest quarter was the highest in seven quarters. The company's consolidated revenue for the quarter was INR 25.33 billion, up almost 29% on year, surpassing expectations of INR 24.15 billion.
The company said it did not see any demand slowdown in December and occupancy was well in line with the industry trends across segments.
The management said the current occupancy rate is high, and it does not see it going up in the future. However, the management is concerned about the foreign tourist occupancy rate, which is still lower than the pre-COVID levels. The management expected the foreign tourist arrivals to be at least 120% of the pre-COVID levels. Many Indians with an Oversees Citizen of India or Person of Indian Origin card are now being considered as foreign tourists, but they should not be considered in that category.
With the launch of the Tata Neu platform, the company's loyalty programme now has 8 million members and it expects the membership to increase to 10 million. The management stressed on the importance of the loyalty programme as people now tend to take shorter holidays more frequently.
Indian Hotels expects to see better traction in its US business in Jan-Mar, on account of the presidential swearing in. However, growth of its London business is not along expected lines as the market is a bit softer and a lot of new supply has gone into London.
The company is not interested in the franchise model as it does not think the Indian market is mature enough. The new hotel opening in Uttarakhand, which is in a franchise model, is an exception as the management of that hotel has a relationship with the company. Indian Hotels had a franchise before in the form of Pilibit House in Haridwar. However, Pilibit House later requested to be converted into a management contract, the company said. On Friday, shares of Indian Hotels closed at INR 813.35 on the National Stock Exchange, up 0.2%. End
Reported by Akshay V. Johnson and Narayana Krishna
Edited by Ashish Shirke
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