The shares of this largecap company surged 7 percent in Monday’s trading session after reporting an increase in net profits by 11 percent YoY. In one year, the stock has delivered more than 50 percent to its shareholders.
Price Movemnet:
With a market capitalization of Rs. 86,317 crores, the shares of Indian Hotels Co Ltd started Monday’s trading session on a lower note at Rs. 573.10 compared to its previous close of Rs. 577.90. During the trading session, the shares hit a high of Rs. 614.05, gaining around 7 percent and are currently trading at Rs. 613 apiece.
What Happened:
Indian Hotels Company Limited (IHCL), India’s leading hospitality firm, saw its revenue (excluding other income) grow by approximately 6 percent from Rs. 1,466.37 crores in Q1FY24 to Rs. 1,550.23 crores in Q1FY25. In addition, the company’s net profits surged by 11 percent from Rs. 236 crores to Rs. 260.19 crores over the same period.
Moreover, EBITDA climbed 9.6 percent to Rs. 450 crores. Notably, the company’s margin expanded to 29 percent from 28 percent. According to reports, analysts tracked by Bloomberg had pegged the profit at Rs. 255 crores.
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Furthermore, the New Businesses segment, encompassing Ginger, Qmin, and amã Stays & Trails, achieved revenue of Rs.162 crore, marking a substantial 37 percent increase year-over-year.
Meanwhile, the Reimagined Businesses of TajSATS and The Chambers saw a 17 percent increase in revenue, reaching Rs. 274 crores and the Management Fee income jumped by 17 percent to Rs. 114 crores.
Additionally, the company in a separate exchange filing, also informed regarding the transfer of the restaurant business of its wholly owned overseas subsidiary Taj International Hotels Ltd to St James Court Hotels Ltd, another subsidiary of the company.
In order to simplify the operating model/ the holding structure and to achieve business consolidation, it is proposed to combine the business of Taj International Hotels Limited (“TIHL”) to St James Court Hotels Ltd. (“SJCH”), through a share swap and simultaneous business transfer agreement.
During the quarter, IHCL’s portfolio now boasts over 325 hotels, with notable developments including 16 new signings and 6 openings.
Management Commentary:
Commenting on the quarter’s performance, Mr. Puneet Chhatwal, Managing Director & CEO, of IHCL, said, “IHCL consolidated reported a strong financial performance for the first quarter with an all-time high revenue of INR 1,596 crores and a healthy EBITDA margin of 31%.
Our performance was enabled by a diversified top line, with new businesses growing at 37% over the previous year and incremental revenues from the not-like-for-like growth. Continuing the growth momentum our portfolio is now over 325 hotels with 16 signings and 6 openings in the quarter.”
He added, “With demand continuing to outpace supply and favourable structural tailwinds, the sector is set to clock strong revenue growth in the quarters ahead.”
Important Financial Ratio:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 13.31 percent and a return on capital employed (RoCE) of 14.66 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 17.75 percent.
Company profile:
IHCL is one of India’s leading hospitality companies. IHCL and its subsidiaries comprise a diversified portfolio across luxury, upscale/upper upscale and lean luxury/midscale segments. IHCL’s operations are spread across four continents, 12 countries and over 100 cities.
Written By Vaibhav Patil
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