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    EIH

    EIHOTELGood
    Consumer Services·14 Nov 2025
    Management Summary

    EIH reported a quarter of resilient pricing power amidst significant operational headwinds, including geopolitical disruptions (Operation Sindoor), adverse weather, and major renovations. While headline consolidated metrics were dragged down by the temporary closure of The Oberoi Grand and the exit from Mumbai Airport Lounge, underlying like-to-like growth remains robust. Management is highly bullish on the upcoming winter season (Q3/Q4), citing strong demand for weddings and foreign travel.

    Highlights

    8

    • Consolidated revenue grew 2% YoY, while like-to-like revenue (excluding Oberoi Grand and Airport Lounge) grew 9%.

    • EBITDA declined 9% on a consolidated basis, primarily due to the absence of The Oberoi Grand and Mumbai Airport Lounge operations.

    • Average Room Rate (ARR) increased by 7% YoY despite flat occupancy of 72%.

    • H1 like-to-like revenue and EBITDA grew by 14% and 12% respectively.

    • Cash reserves remain healthy at ₹1,050 crores as of September 30, 2025.

    • Expansion pipeline confirmed at 27 properties (2,100 keys) to be operational by 2030.

    • Flight Services (OFS) revenue reached ₹120-125 crores for the quarter, growing 30-35% YoY.

    • H1 Net Profit declined 33% YoY, impacted by a one-time Mashobra settlement of ₹102 crores in Q1.

    Concerns

    1

    • Wildflower Hall Lease Uncertainty

    What Changed2

    vs Q3 FY26

    Risks discussed5 → 4 (-1)Q&A highlights8 → 3 (-5)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue2%+2%YoY
    2. 02EBITDA Growth-9%-9%YoY
    3. 03PAT Growth-12%-12%YoY
    4. 04ARR Growth7%+7.0%YoY
    5. 05Occupancy72%0%YoY

    Segment breakdown

    Owned Domestic Hotels
    75% Occupancy17,168 Rs ARR
    Flight Services (OFS)
    ₹122.5 Cr Revenue32.5% Revenue Growth
    International Portfolio
    7.5% RevPAR Growth
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Capex
    Average Annual Capex
    ₹400-500 crores
    		Medium
    Capacity
    Hotel Development Pipeline
    27 properties (2,100 keys)
    		High
    Capacity
    Managed Properties Addition
    19
    		High
    Capacity
    New Hotel Opening - Rajgarh Palace
    66 keys
    		High
    Capacity
    Oberoi Grand Kolkata Phase 1 Opening
    50 keys (Chowringhee wing)
    		Medium

    Risks & concerns

    7
    RiskSeverity

    Wildflower Hall Lease Uncertainty

    Lease agreement with Himachal government expires March 2026; lack of clarity on auction process is causing guest reluctance to book. — Both acknowledged

    high

    Renovation Drag

    Major renovations at Oberoi Grand (Kolkata), Trident Jaipur, and floors in Mumbai are impacting short-term EBITDA and inventory. — Management acknowledged

    medium

    Geopolitical and Security Disruptions

    Operation Sindoor and Middle East conflict impacted international travel; recent Delhi explosion is being monitored for cancellation trends. — Management acknowledged

    medium

    Labor Shortage and Employee Costs

    Industry-wide decline in hospitality as a career choice is forcing EIH to increase manning levels and improve working conditions, raising costs. — Management acknowledged

    low

    Areas of Evasion(3)

    • Specific profitability of Wildflower Hall post-lease adjustment
    • Specific OpEx drag from the closed Oberoi Grand Kolkata
    • Specific financial terms of management contracts

    Q&A highlights

    3

    “We don't discount as much as the market does. And we don't go below certain thresholds... we just don't go down and we don't want to discount so heavily that impacts the brand positioning of our hotels.”

    Reveals management's commitment to premium brand positioning over short-term occupancy gains, even if it leads to lower RevPAR growth relative to peers during lean periods.

    asked by Vikas Ahuja

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Headwinds and Like-to-Like Resilience

    Q2 FY26 was characterized by several external disruption🌐s, including 'Operation Sindoor', the Middle East conflict, and an Air India crash in June that dampened air travel sentiment. Despite these factors and excessive rainfall in Northern India, EIH achieved a 9% like-to-like revenue growth. The company maintained its pricing power, driving a 7% increase in ARR to ₹17,168 for owned hotels, even as consolidated occupancy remained flat at 72%.

    02

    Strategic Renovation Cycle Impacts EBITDA

    The 9% decline in consolidated EBITDA was primarily attributed to the temporary absence of The Oberoi Grand (Kolkata) and the exit from the Mumbai Airport Lounge business. The Oberoi Grand is undergoing a massive structural restoration; Phase 1 (50 keys) is expected to open in October 2026, with the remaining 150 keys following 8-12 months later. Additionally, inventory at Rajvilas (Jaipur) and The Oberoi Mumbai was constrained by refurbishments during the quarter.

    03

    Aggressive Expansion Roadmap to 2030

    EIH is executing a significant expansion plan with 27 properties and 2,100 keys slated for addition by 2030. This includes 17 Oberoi and 7 Trident hotels, with a mix of 18 domestic and 9 international locations. A key upcoming project is the Hebbal development in Bangalore, a 1.3 million sq. ft. mixed-use site featuring both Oberoi and Trident brands alongside commercial space. The company plans to spend ₹400-500 crores in annual Capex to fund this growth.

    04

    Flight Services and Ancillary Growth

    The Oberoi Flight Services (OFS) business emerged as a strong performer, generating ₹120-125 crores in revenue for the quarter, representing a 30-35% YoY growth. While this business has lower margins compared to the previous airport lounge operations, it has successfully replaced that revenue stream. Management noted that overall consumption costs rose slightly to 69.1% due to this mix change.

    05

    Positive Outlook for the Winter Season

    Management expressed high confidence in Q3 and Q4, which are historically the strongest quarters for Indian hospitality. Demand for weddings is reported as 'very strong,' particularly for hotel buyouts at leisure locations like Udaivilas and Sukhvilas. Despite a recent security incident in Delhi, foreign travel demand remains positive, allowing the company to project substantial increases in rates and RevPAR for the second half of the fiscal year.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.