India’s hotel industry has witnessed tremendous growth in recent years, fueled by rising disposable incomes and a burgeoning middle class. As more people have the financial means to travel, the demand for accommodation has surged. This momentum is further amplified by a growing interest in domestic and international tourism, with travelers seeking diverse experiences in India’s cities, beaches, and heritage sites.
Tourism Surge and Government Support
The influx of domestic and international tourists has driven the need for more hotels, ranging from budget options to luxury resorts. The government’s active promotion of tourism through initiatives like “Incredible India” and simplifying visa processes has made the country more accessible to travelers. Additionally, the rising travel enthusiasm among younger generations, coupled with modern infrastructure developments, ensures a thriving hotel industry in the years to come.
Share Price
The shares of Indian Hotels Company Limited are currently trading at Rs. 807.15 down by 053% from its previous close of Rs. 811.45. The shares of the company have constantly witnessed selling pressure from the start of this year and have fallen by close to 8% year to date.
Recent Update Regarding Profit booking
The data shows a significant reduction in HDFC Mutual Fund’s shareholding in Indian Hotels Company Ltd. Their aggregate holding has decreased by 2.06% as of January 15, 2025, bringing their total shareholding down to 2.98% of the paid-up equity share capital. In absolute terms, they now hold 1,42,34,32,227 equity shares of Rs. 1 each.
This large-scale selling appears to be a strategic profit-booking move by HDFC Mutual Fund. Looking at the historical context, they previously held 5.037% of the company as of October 25, 2018, which amounted to 1,18,92,58,445 equity shares. The reduction in holding through open market sales could indicate that the fund house is realizing gains after a period of significant appreciation in the stock price.
The timing and size of this sell-off (over 2% stake) could have contributed to the sharp correction in the company’s share price since the beginning of 2025. This kind of institutional selling often creates temporary pressure on stock prices, especially when large blocks are offloaded in the open market.
However, it’s worth noting that such profit-booking exercises by mutual funds are normal market activities and often reflect portfolio rebalancing rather than any fundamental concerns about the company.
Financial Outlook
Indian Hotels Co. Ltd. has shown strong financial performance in September 2024 compared to September 2023. Sales increased from ₹1,433 crore in September 2023 to ₹1,826 crore in September 2024, reflecting a growth in revenue of 27.4%. EBITDA also saw a significant rise, from ₹355 crore in September 2023 to ₹501 crore in September 2024, with an improvement in the operating profit margin (OPM) from 25% to 27%. This indicates better operational efficiency and cost management.
The company’s net profit surged notably, from ₹179 crore in September 2023 to ₹583 crore in September 2024 implying a jump of over 225%. The impressive growth in both revenue and profitability highlights Indian Hotels Co. Ltd.’s strong financial health and successful business strategies.
The results of Q3 are to be announced today on January 17, 2024.
Future Plans
Based on the 2030 goals outlined, Indian Hotels Company has ambitious expansion plans. The company aims to double its portfolio from 350 to 700+ hotels, with operational hotels increasing from 232 to 500+ by 2030. On the financial front, they project enterprise revenue to grow significantly from ₹13,000 Cr to ₹30,000+ Cr, while consolidated revenue is expected to more than double from ₹7,000 Cr to ₹15,000+ Cr. The company also targets improving its ROCE (Return on Capital Employed) from 15% to 20%+ while maintaining a positive net cash position, up from the current ₹2,000 Cr level.
About the Company
Indian Hotels Company Limited (IHCL) is one of India’s leading hospitality brands, with a diversified portfolio spanning luxury, upscale, and midscale segments. Operating in over 100 cities across 12 countries and four continents, IHCL has over 232 operational hotels with 24,000+ rooms as of September 2024. Notable brands under its umbrella include Taj, Vivanta, SeleQtions, and Ginger.
Written By: Dipangshu Kundu
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