This Tata Group company which deals in the business of hotels and hospitality with a diversified portfolio across luxury, upscale/upper upscale, and midscale was down by 4 percent despite a net profit increase of 33 percent year on year in Q3FY25.
Price Movement
In Monday’s trading session, The Indian Hotels Company Ltd‘s share price touched a day’s low of Rs. 779.35, which was down by 4.23 percent. The share price reiterated from the day’s low and was trading at Rs. 782.70, which is 3.82 percent lower than the previous closing price of Rs. 813.80. In the past year, the stock has delivered around 66 percent and has outperformed the Nifty Index.
Business Segments
As per the recent December 2024 results, the company recognizes its revenue from Hoteliering which contrbiutes around 89.29 percent and the remaining 10.71 percent from Air and Institutional catering contributes around 10.71 percent.
Q3FY25 Financial Performance
Their Q3FY25 results show revenue from operations of Rs. 2,533 crore which increased by 28.98 percent year on year, from Rs. 1,963.84 crore in Q3FY24 and a 38.71 percent increase from Rs. 1,826.12 crore in Q2FY25. Their net profit increased by 32.62 percent year on year, from Rs. 476.93 crores in Q3FY24 to Rs. 632.53 crores in Q3FY25. Quarterly, the profits were up by 8.5 percent from Rs. 582.71 crore.
Future Outlook
Further, IHCL plans to increase their RoCE from the current 15 percent to over 20 percent by FY30 which is driven by Asset management initiatives in existing assets, increased share from capital-light business, brownfield expansions, and unlocking non-cash generating assets. They expect to increase their portfolio of more than 700 hotels from the current 360 hotels and even plan to double the revenues to more than 15,000 crore by 2030. IHCL plans to increase its share of capital-light inventory to 75 percent by FY30 from 60 percent in FY24.
Management Commentary
Mr. Puneet Chhatwal, the Managing Director & CEO of IHCL said, “Q3 marks eleven consecutive quarters of record performance with the hotel segment reporting a strong revenue growth of 16% resulting in EBITDA margin of 40.9%. The revenue performance was driven by a 40% increase in New Businesses, not like-for-like growth, and double-digit growth in same-store hotels led by 20% growth in the US portfolio. With the consolidation of the air and institutional catering business, Revenue and PAT grew by 29% at INR 2,592 crores and INR 582 crores respectively. In Q4 and the subsequent quarters of the next financial year, the sector will continue to witness demand buoyancy on account of large-scale regional events, weddings, and sustained transient travel.”
Brokerage Target
Jefferies, a reputed brokerage firm, has maintained a ‘Buy’ rating of Rs. 1,000 as a target price with a potential upside of 22.8 percent from Friday’s closing price. The brokerage said EBITDA met estimates with a slight consensus beat. The Guidance reflects strong demand for Q4FY25 and FY26, driven by events, weddings, travel, and new business growth.
About the company
The Indian Hotels Company Limited (IHCL), part of the Tata Group, was founded in 1902 by Jamsetji Tata and is headquartered in Mumbai. Renowned for its luxurious hospitality, IHCL operates a diverse portfolio of over 263 hotels across 12 countries which includes iconic brands like Taj, SeleQtions, Vivanta, and Ginger.
Written by Santhosh S
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