EIH — Q2 FY26 earnings call

Call held 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

  • 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

  • Wildflower Hall Lease Uncertainty

Key financials

  1. Revenue 2% +2%YoY
  2. EBITDA Growth -9% -9%YoY
  3. PAT Growth -12% -12%YoY
  4. ARR Growth 7% +7%YoY
  5. Occupancy 72% 0%YoY
  6. Cash Reserve ₹1,050 Cr

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

  • Owned Domestic Hotels
    75% Occupancy₹17,168 ARR
  • Flight Services (OFS)
    ₹122.5 Cr Revenue32.5% Revenue Growth
  • International Portfolio
    7.5% RevPAR Growth

Guidance & targets

Capex

  • Average Annual Capex Capex · every year · Medium confidence ₹400-500 crores
    there'll be an average Capex spend of around Rs.400 to 500 crores every year.

    — Mr. Vineet Kapur, CFO

Capacity

  • Hotel Development Pipeline Capacity · by 2030 · High confidence 27 properties (2,100 keys)
    Overall, we are looking at a total of 27 properties with 2,100 keys addition, which will be effective by 2030.

    — Mr. Vineet Kapur, CFO

  • Managed Properties Addition Capacity · by 2030 · High confidence 19
    19 Managed properties will be added by 2030.

    — Mr. Vineet Kapur, CFO

  • New Hotel Opening - Rajgarh Palace Capacity · 2025-11-16 · High confidence 66 keys
    Just to add “The Oberoi” Rajgarh Palace is almost ready. We have 66 keys and this will become operational from 16th November.

    — Mr. Vineet Kapur, CFO

  • Oberoi Grand Kolkata Phase 1 Opening Capacity · October 2026 · Medium confidence 50 keys (Chowringhee wing)
    It'll come in October, October of next year [2026]. That's phase 1.

    — Mr. Vineet Kapur, CFO

Risks & concerns

  • Wildflower Hall Lease Uncertainty

    high

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

    Both acknowledged

  • Renovation Drag

    medium

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

    Management acknowledged

  • Geopolitical and Security Disruptions

    medium

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

    Management acknowledged

  • Labor Shortage and Employee Costs

    low

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

    Management acknowledged

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

2 direct, 1 evasive
RevPAR growth disconnect vs peers Direct
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

Wildflower Hall profitability and lease status Evasive
It will be difficult to share that [profitability]... we have still not seen the process of auction going ahead. So, we're still waiting for that to happen.

Highlights a significant regulatory and operational risk for a key property where lease uncertainty is already impacting guest reservations.

Asked by Rajiv Bharti

Owned hotel performance metrics Direct
The occupancy for hotels owned for Q2 was 75% and ARR was 17,168.

Provides granular data on the core owned portfolio, showing it outperforms the consolidated occupancy average (72%).

Asked by Mehul

2 min read 5 chapters

Detailed narrative

Operational Headwinds and Like-to-Like Resilience

Q2 FY26 was characterized by several external disruptions, 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%.

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.

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.

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.

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.

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