EIH Associated Hotels Limited — Q4 FY25 earnings call

Call held 30 May 2025

Management summary

EIH Limited delivered its best-ever financial performance in FY25, with strong consolidated revenue and EBITDA growth, although consolidated PAT was impacted by exceptional items. Standalone PAT saw a significant boost from a one-time gain. The company maintains a strong cash position and a robust expansion pipeline, while actively managing the conclusion of its lounge business and ongoing litigation for Wildflower Hall.

Highlights

  • Consolidated revenue grew by 11% year-over-year for FY25, reaching highest-ever performance.

  • Consolidated EBITDA grew by 13% year-over-year for FY25, reflecting strong operational efficiency.

  • Standalone PAT increased by 44% year-over-year for FY25, significantly aided by a ₹115 crore exceptional gain from Mashobra deconsolidation.

  • Reported a robust cash surplus of ₹1,000 crores as of March 31, 2025, providing a strong position for future growth.

  • Announced a healthy pipeline of 21 new properties, adding 1,400-1,500 keys over the next 2-3 years, indicating strong growth prospects.

Concerns

  • Consolidated PAT growth was limited to 6% year-over-year for FY25 due to exceptional items related to Oberoi Grand & Tirupati.

  • The lounge business concluded as of March 31, 2025, resulting in a revenue loss of ₹122 crores for the last year.

  • The Oberoi Grand hotel was closed for a significant part of the year for renovation, impacting overall operations and revenue.

Key financials

  1. Consolidated Revenue Growth 11% +11%YoY
  2. Consolidated EBITDA Growth 13% +13%YoY
  3. Consolidated PAT Growth 6% +6%YoY
  4. Standalone Revenue Growth 9% +9%YoY
  5. Standalone EBITDA Growth 10% +10%YoY
  6. Standalone PAT Growth 44% +44%YoY

What they filed

Q1 FY27: revenue down 4.0%, net profit up 11.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue71 133 140 69 58 −18%129 −3%127 −9%66 −4%
EBITDA7 54 61 9 3 −63%58 +7%50 −18%7 −20%
Net profit2 40 46 6 3 +33%41 +2%38 −19%7 +11%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • International Category
    ₹131 Cr Revenue₹36 Cr EBITDA10% Revenue Growth
  • Lounge Business
    ₹122 Cr Revenue (last year)
  • Wildflower Hall
    ₹78 Cr Revenue (last year)
  • Total OFS Business
    ₹490 Cr Revenue (last year)
  • Kolkata Business
    ₹70 Cr Revenue Impact₹43 Cr EBITDA Impact

Capital allocation

high confidence
  • Capex Capex disclosed
    • Consolidated Capex ₹480 Cr
    • Standalone Capex ₹270 Cr
    • Investments in Oberoi London
    • Rajgarh property development
    • Renovation of Trident at Nariman Point (four floors & long stay apartments)
    • Investments in Oberoi Goa & Oberoi Grand
    • Additional requirements for London subsidiary (not sizable)
    The amount includes the investments made in Oberoi London. We have spent on Capex at our Rajgarh property, which is going to come up very soon. We also invested a significant amount in renovation in Trident at Nariman Point, which was four floor's renovation & long stay apartments in Oberoi Mumbai. In addition to that we have spent on Oberoi Goa & Oberoi Grand. So there will be some additional requirements which will come through, but most of the investment, at least for current year, is done. There will be some few additions which will be made towards the end of this year, but not a sizable one.
  • Liquidity Cash ₹1,000 Cr Strong cash surplus at the end of March 31st 2025, providing a good position for future growth and expansion.
    We have roughly 1,000 crores of surplus funds at the end of March 31st 2025, which gives us a good position for future growth and expansion, which we are looking across the hotel segments.

Guidance & targets

New Properties/Keys

  • New hotels to be added New Properties/Keys · next 2-3 years · High confidence 21
    We have 21 properties with roughly 1,500 keys going to be added in the next 2-3 years.

    — Mr. Vineet Kapur, CFO, EIH Ltd

  • New keys to be added New Properties/Keys · next 2-3 years · High confidence 1,500

    — Mr. Vineet Kapur, CFO, EIH Ltd

Oberoi Grand Reopening

  • Oberoi Grand partial opening Oberoi Grand Reopening · next 12 months · High confidence in about 12 months
    As far as the Oberoi Grand is concerned, the plan is still... the renovation was for 18 months. We're already six months through that. So, we'll open in about 12 months from now. And that'll be a partial opening. It's a two-phased renovation.

    — Mr. Vikram Oberoi, MD & CEO, EIH Ltd

Wildflower Hall

  • Wildflower Hall bidding process conclusion Wildflower Hall · next 6 months · High confidence next six months
    Actually, it's next six months or till the bidding process is concluded.

    — Mr. Vikram Oberoi, MD & CEO, EIH Ltd

London Hotel

  • Secure 49% partner for London hotel London Hotel · long-term objective · Medium confidence 49%
    In London, our long-term objective is to get a partner at 49%.

    — Mr. Vikram Oberoi, MD & CEO, EIH Ltd

Foreign Business

  • Foreign business revenue to pre-pandemic levels Foreign Business · this financial year · Medium confidence meet, if not exceed
    We closed last financial year where we still hadn't reached across all our owned and managed hotels pre-pandemic levels for foreign business. I hope this year, all going well, we will meet, if not exceed, that number.

    — Mr. Vikram Oberoi, MD & CEO, EIH Ltd

Lounge Business Offset

  • Compensate for lounge business loss Lounge Business Offset · this financial year · Medium confidence most of that
    I hope we can offset most of that in this financial year. That's going to be our endeavour to compensate for the loss of lounge business, through buoyancy and increased business for the flight catering business.

    — Mr. Vikram Oberoi, MD & CEO, EIH Ltd

What to watch in Q1 FY26

Wildflower Hall Bidding Outcome

Next 6 months
Current Bidding process ongoing, management keen to bid.
Target Conclusion of bidding process, potential acquisition/retention.

Why it matters

The outcome will determine the future operational and financial contribution of a key property.

Actually, it's next six months or till the bidding process is concluded.

Risks & concerns

  • Wildflower Hall litigation outcome

    medium

    Recovery of Mashobra book value (₹141 crores) is dependent on the outcome of ongoing litigation.

    Management acknowledged

  • Revenue loss from lounge business conclusion

    medium

    The conclusion of the lounge business as of March 31, 2025, results in a loss of ₹122 crores in annual revenue that needs to be offset.

    Management acknowledged

  • Impact of Oberoi Grand renovation

    medium

    The closure of Oberoi Grand for an 18-month renovation (6 months completed) impacts current revenue and operations.

    Management acknowledged

  • Geopolitical impact on international business

    low

    Middle East operations were previously impacted by conflict, though currently stable, indicating potential for future volatility.

    Management downplayed

Q&A highlights

6 direct
International business contribution to PAT Partial
So if I look at the international category, we had a contribution to the revenue around 131 crores and 36 crores in EBITDA. We grew by 10% in terms of revenue, and seen similar growth in EBITDA from our international category. This is part of our consolidated numbers. On PAT, the numbers I have is different. So maybe I need to come back to you on this.

Analyst sought clarity on the profitability of international operations, but management could not provide PAT figures immediately.

Asked by Saket

Mashobra de-recognition and recovery Direct
So 136 crores is the advance against equity which was put in Mashobra, that we foresee to recover. On top of that, the value of Mashobra book value, which was roughly 141 crores, is what we consider as recoverable based on the outcome of the current litigation, which will be decided in the coming months.

Clarifies the components and conditions for recovery of funds related to the Wildflower Hall property.

Asked by Saket

Investment in London subsidiary Direct
So there will be some additional requirements which will come through, but most of the investment, at least for current year, is done. There will be some few additions which will be made towards the end of this year, but not a sizable one.

Provides insight into the remaining capital outlay for the London project, indicating no major further investment for the current year.

Asked by Saket

Wildflower Hall bidding eligibility and keenness Direct
We absolutely are keen. Yes.

Confirms the company's strategic interest in retaining the Wildflower Hall property through the bidding process.

Asked by Mr. Amit Agarwal

Revenue loss from concluded lounge business Direct
So, Amit, no. The lounge business has been concluded. That concluded at the end of the financial year. So, the lounge business is no longer there. In fact, it was supposed to end sooner. It was supposed to end halfway through last financial year, and then there was an extension which was received for two consecutive quarters. So, as of 31st March, that business has been concluded. The numbers, Vineet will just give you. So, current year, just to add, we had a revenue of 78 crores on account of wildflower. For last year, we closed it at 78 crores. Sure. So, total amount of the business what we did last year was around 122 crores.

Quantifies the revenue impact of the discontinued lounge business and confirms no chance of renewal.

Asked by Mr. Amit Agarwal

Breakdown and outlook for flight catering business Partial
Amit, I don't have those details with me. So, I unfortunately can't give you that breakup right now. I think... May I just comment on an overall. Amit, I just want to repeat what I said. We see strong demand for our airline business. We've been able to or we continue to add flights to the business, both domestic and international. And we will do our uttermost to compensate for the loss of the airport services business.

Analyst probed for more detail on the flight catering segment, which management could not provide, but reiterated confidence in offsetting lost lounge revenue.

Asked by Mr. Amit Agarwal

Capex breakdown and purposes Direct
The amount includes the investments made in Oberoi London. We have spent on Capex at our Rajgarh property, which is going to come up very soon. We also invested a significant amount in renovation in Trident at Nariman Point, which was four floor's renovation & long stay apartments in Oberoi Mumbai. In addition to that we have spent on Oberoi Goa & Oberoi Grand.

Provides a detailed breakdown of the significant capital expenditures for the year across various properties.

Asked by Mr. Rajiv Bharti

Sustainability of prices in spiritual destinations Direct
Sanjay, prices are a function of supply and demand. And with religious tourism being so embedded in our culture as Indians, I think there will always be strong demand. And therefore, I think prices will remain buoyant in those destinations.

Management's view on the long-term pricing power and demand drivers in the spiritual tourism segment.

Asked by Mr. Sanjay Kohli

2 min read 6 chapters

Detailed narrative

Q4 FY25 and Full Year FY25 Financial Performance

EIH Limited reported its highest-ever financial performance for FY25, with consolidated revenue growing by 11% year-over-year and EBITDA increasing by 13%. Standalone revenue also saw a 9% growth, with EBITDA up 10%. Notably, standalone PAT surged by 44% year-over-year, significantly boosted by a ₹115 crore exceptional gain from the deconsolidation of Mashobra. However, consolidated PAT growth was limited to 6% due to specific exceptional items related to Oberoi Grand and Tirupati.

Operational Excellence and Market Leadership

The company maintained its leadership position in the Indian hotel sector, outperforming competitors in key metrics like MPI, ARI, and RGI. In Q4 FY25, the industry saw healthy occupancy rates of 68-70% and an 11-13% increase in Average Room Rates (ARR) compared to FY24, leading to a 14-16% RevPAR growth. EIH's owned and managed hotels achieved a 22% RevPAR growth in Q4, with Oberoi hotels growing by 24% and Trident by 22%, contributing to an overall 13% RevPAR increase for FY25.

Strategic Growth and Expansion Pipeline

EIH Limited is pursuing an aggressive growth strategy, planning to add approximately 21 new hotels and 1,400-1,500 keys over the next 2-3 years. This pipeline includes 12 domestic and 9 international properties. Management emphasized its focus on driving higher rates, particularly for the Oberoi brand, citing strong demand and the perceived underpricing of quality hotels in India. This expansion is supported by a robust cash surplus of ₹1,000 crores as of March 31, 2025.

Capital Expenditure and Project Updates

Capital expenditure for the year amounted to ₹480 crores on a consolidated basis and ₹270 crores standalone. Key investments included the Oberoi London project, the upcoming Rajgarh property, and significant renovations at Trident Nariman Point, which now includes four floors for long-stay apartments. Additionally, funds were allocated to Oberoi Goa and Oberoi Grand. The Oberoi Grand renovation is on track, with a partial reopening anticipated in approximately 12 months as part of a two-phased approach.

Impact of Business Transitions and Litigation

The company's lounge business concluded as of March 31, 2025, resulting in a revenue loss of ₹122 crores from the previous year, with no plans for renewal. Management aims to offset this loss through increased business in its flight catering segment, which generated roughly ₹490 crores in total OFS business last year. The Wildflower Hall (Mashobra) property remains under litigation, with EIH expressing keen interest in bidding for its continued management, and the recovery of its ₹141 crore book value dependent on court proceedings.

International Business Performance and Outlook

The international business segment contributed ₹131 crores in revenue and ₹36 crores in EBITDA for FY25, marking a 10% growth in revenue. While Middle East operations had faced impacts from regional conflicts, they are now stable. The company is optimistic about its international performance, expecting foreign business to return to or exceed pre-pandemic levels this financial year, driven by strong demand observed in locations like Marrakesh and Mauritius.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Consumer Services earnings calls