EIH — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

EIH delivered a strong operational performance in Q1 FY26, characterized by significant growth in room rates (ARR) and RevPAR despite geopolitical headwinds like 'Operation Sindoor'. While top-line and EBITDA reached record levels, the bottom line was severely impacted by a ₹110 crore exceptional charge following a court ruling on the Mashobra property. Management remains focused on a high-ARR strategy and a long-term expansion plan to double room capacity by 2030.

Highlights

  • Consolidated Revenue grew 9% YoY, achieving the highest ever Q1 revenue and EBITDA.

  • RevPAR for owned and managed hotels grew 16% YoY to ₹11,350, outperforming industry growth of 12%.

  • Average Room Rate (ARR) saw a healthy increase of 18% YoY, while occupancy remained flat at 70%.

  • Consolidated EBITDA margin expanded to 32% from 30% in the previous year.

  • Consolidated PAT declined 62% YoY due to a one-time exceptional hit of ₹110 crores related to the Mashobra (Wildflower Hall) court judgment.

  • Standalone Revenue grew 15% YoY, with EBITDA growth of 28% and margins expanding to 34%.

  • Expansion pipeline remains robust with 25 new properties (2,033 keys) targeted for operation by 2030.

  • Oberoi Flight Services (OFS) recorded Q1 revenue of approximately ₹110 crores, offsetting the closure of airport lounge services.

Concerns

  • Geopolitical Tensions (Operation Sindoor)

Key financials

  1. Revenue — +9%YoY
  2. EBITDA Margin 32%
  3. RevPAR ₹11,350 +16%YoY
  4. ARR Growth 18%
  5. PAT — -62%YoY

What they filed

Q1 FY27: revenue up 15.6%, net profit up 252.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue521 695 728 519 530 +2%779 +12%809 +11%600 +16%
EBITDA152 303 306 141 135 −11%324 +7%288 −6%149 +6%
Net profit114 220 332 36 103 −10%199 −10%200 −40%127 +253%
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

  • Standalone (Hotels)
    15% Revenue Growth28% EBITDA Growth34% EBITDA Margin
  • Oberoi Flight Services (OFS)
    ₹110 Cr Q1 Revenue

Guidance & targets

Capacity

  • New Hotel Pipeline Capacity · by 2030 · High confidence 25 properties / 2,033 keys
    We have a strong expansion strategy with 25 new properties, mainly focused in India, but to be operational by 2030.

    — Mr. Vineet Kapur, CFO

  • Total Room Count Capacity · by 2030 · Medium confidence Double current count
    I just want to go back to the fact when we had shared this Vision 2030, where we had shared that we want to double our room count... that is our vision. That is what we're going to work towards.

    — Mr. Vikram Oberoi, MD & CEO

  • Oberoi Dahabeya 1 and 2 Opening Capacity · 2026 · Medium confidence 2026

    Previously 2025 → 2026

    Mainly, I can see the Oberoi Dahabeya 1 and 2, which was supposed to be operational in 2025, is now postponed to 2026.

    — Mr. Vikram Oberoi, MD & CEO

Other

  • Inbound Tourism Growth Other · 2025 · Medium confidence 15%
    forecast for inbound tourism to grow by 15% in the current year.

    — Mr. Vineet Kapur, CFO

Risks & concerns

  • Geopolitical Tensions (Operation Sindoor)

    high

    India-Pakistan tensions and Middle East conflicts impacted travel to Northern India and international demand in May/June.

    Management acknowledged

  • Human Resource Shortage

    medium

    Post-COVID layoffs led to lower hotel school admissions, creating a talent challenge for the industry's rapid expansion.

    Management acknowledged

  • Project Delays in Managed Hotels

    medium

    Management admits less control over timelines for managed properties (e.g., Dahabeya, Nepal) compared to owned assets.

    Both acknowledged

Areas of evasion (2)

  • Specific full-year revenue numbers for the flight services business.
  • Exact internal IRR benchmarks for new acquisitions.

Q&A highlights

2 direct
Exceptional hit of ₹110 crores for Mashobra Direct
The 110 crores net impact on account of equity value, which we are not receiving based on the court judgment and also has an impact of 50% advance against equity, which we'd given to Mashobra.

Clarifies the nature of the massive one-time hit that wiped out significant quarterly profit.

Asked by Abhishek

Gap between RevPAR growth (16%) and Revenue growth (9%) Direct
The things which impacted us on consolidated basis was, one was Mashobra... we are no longer consolidating Mashobra in our numbers. At the same time, we also had an impact with Oberoi Grand, which is actually closed for renovation.

Explains why strong operational metrics didn't fully translate to top-line growth due to property-specific exits and closures.

Asked by Raghav Malik

Vision 2030 room count gap Partial
We need to bridge the gap of almost 2,000 [rooms]... all of us in the organization are single-mindedly focused on growth, whether that's through management contracts, through partnerships, etc.

Highlights a potential shortfall in the company's long-term growth target versus its current visible pipeline.

Asked by Amit Kadam

2 min read 5 chapters

Detailed narrative

ARR-Led Strategy Drives Margin Expansion

EIH continues to prioritize Average Room Rate (ARR) over occupancy to maximize flow-through to EBITDA. In Q1 FY26, ARR grew by 18% while occupancy remained flat at 70%, leading to a 16% increase in RevPAR to ₹11,350. This strategy allowed consolidated EBITDA margins to expand by 200bps to 32%, despite significant geopolitical disruptions in May and June.

Mashobra Court Judgment Impacts Bottom Line

The quarter's financial results were overshadowed by a ₹110 crore exceptional hit related to the Wildflower Hall property in Mashobra. This impact stems from the net loss of equity value and advances following a court judgment. While management confirmed this is the final exceptional item related to the Himachal property, it resulted in a 62% YoY decline in consolidated PAT.

Portfolio Reconfiguration and Revenue Headwinds

Consolidated revenue growth of 9% lagged behind RevPAR growth due to the closure of several revenue streams. The Oberoi Grand was closed for renovation (₹22cr impact), and Oberoi Airport Services (OAS) lounge contracts ended (₹28cr impact). However, the company is successfully pivoting to Oberoi Flight Services (OFS), which recorded ₹110cr in Q1 revenue and is offsetting the OAS closure at the EBITDA level.

Vision 2030 and Pipeline Execution

Management reiterated its 'Vision 2030' to double its room count, though analysts noted a gap between this goal and the current visible pipeline of 2,033 keys. EIH recently signed four new managed hotels and remains 'single-mindedly focused' on bridging the 2,000-key gap through management contracts and partnerships. Some international projects, like the Oberoi Dahabeya in Egypt, have seen timelines shift from 2025 to 2026 due to partner-related delays.

Navigating Industry-Wide Human Capital Challenges

CEO Vikram Oberoi highlighted human resources as a primary challenge for the hospitality industry. He noted that large-scale layoffs during the pandemic led to a decline in hotel school admissions, creating a talent vacuum. EIH aims to differentiate itself by supporting colleagues and maintaining its value system to secure the talent necessary for its 25-hotel expansion plan.

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