EIH — Q4 FY25 earnings call

Call held 26 May 2025

Management summary

EIH delivered a strong performance in FY25, characterized by industry-leading RevPAR growth and significant margin expansion. Despite the temporary closure of the Oberoi Grand and the conclusion of the airport lounge business, the company achieved record financials. Management remains highly bullish on Indian hotel rates, asserting that domestic luxury properties are currently underpriced compared to global benchmarks.

Highlights

  • Consolidated revenue grew by 11% YoY, while EBITDA increased by 13% YoY.

  • RevPAR for Oberoi and managed hotels grew by 22%, significantly outperforming the industry average of 16%.

  • Standalone PAT for the full year grew by 44%, bolstered by a ₹115 crore exceptional gain from the deconsolidation of Mashobra.

  • The company maintains a strong cash surplus of approximately ₹1,000 crores as of March 31, 2025.

  • Expansion pipeline includes 21 new properties (approx. 1,500 keys) to be added over the next 2-3 years.

  • Q4 occupancy reached 82%, up from 81% in the previous year, with ARR growth between 11-13%.

  • International business contributed ₹131 crores to revenue and ₹36 crores to EBITDA, both growing at 10% YoY.

Key financials

2 periods

Headline

  • Consolidated Revenue Growth
    11%
    YoY +11%
  • Consolidated EBITDA Growth
    13%
    YoY +13%
  • Consolidated PAT Growth
    6%
    YoY +6%
  • Standalone PAT Growth (Full Year)
    44%
    YoY +44%
  • Surplus Funds
    ₹1,000 Cr

Q4

  • Occupancy
    82%
    YoY +1.2%

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

  • International Category
    ₹131 Cr Revenue₹36 Cr EBITDA10% Revenue Growth
  • Other Food Services (OFS)
    ₹490 Cr Total Revenue₹122 Cr Lounge Business Revenue

Guidance & targets

Capacity

  • New Hotel Properties Capacity · next 2-3 years · High confidence 21
    From a management perspective, we are going to add roughly 21 new hotels in the coming 3 to 4 years, which will help us grow the business.

    — Vineet Kapur, CFO

  • Total Keys Addition Capacity · next 3-4 years · High confidence 1,400-1,500
    We will add roughly 1,400-1,500 keys in next 3-4 years.

    — Vineet Kapur, CFO

Other

  • Oberoi Grand Reopening Other · by May 2026 · Medium confidence 12 months
    So, we'll open in about 12 months from now. And that'll be a partial opening. It's a two-phased renovation.

    — Vikram Oberoi, MD & CEO

  • London Subsidiary Partner Stake Other · Long-term · Medium confidence 49%
    In London, our long-term objective is to get a partner at 49%.

    — Vikram Oberoi, MD & CEO

Risks & concerns

  • Loss of Airport Lounge Business

    medium

    The conclusion of the Bombay Airport lounge contract results in a ₹122 crore revenue loss that needs to be offset by flight catering growth.

    Both acknowledged

  • Oberoi Grand Closure

    medium

    The closure for renovation had a ₹70 crore revenue and ₹43 crore EBITDA impact for the year.

    Management acknowledged

  • Geopolitical Conflict Impact

    low

    Middle East performance was impacted by the Israel-Palestine conflict, though management notes it has since stabilized.

    Management acknowledged

Areas of evasion (2)

  • Refused to disclose specific F&B growth figures.
  • Could not provide the breakup of domestic vs international flight catering business.

Q&A highlights

3 direct
Mashobra/Wildflower Hall 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.

Clarifies the specific financial recovery expected from the ongoing legal dispute regarding a key asset.

Asked by Saket Mehrotra

Loss of Lounge Business vs Flight Catering Direct
The lounge business has been concluded... as of 31st March, that business has been concluded... we see strong demand for the airline business... and I hope we can offset most of that in this financial year.

Quantifies a ₹122 crore revenue headwind from the lost Bombay Airport lounge contract and the strategy to mitigate it.

Asked by Amit Agarwal

Pricing Sustainability in Spiritual Destinations Direct
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.

Confirms management's confidence in the high-margin spiritual tourism segment, specifically the upcoming Tirupati project.

Asked by Sanjay Kohli

2 min read 5 chapters

Detailed narrative

Industry-Leading RevPAR Growth

EIH outperformed the broader industry in Q4 FY25, with Oberoi hotels achieving 24% RevPAR growth compared to the industry's 16%. This was driven by a healthy mix of occupancy (82%) and ARR increases (11-13%). Management believes there is still significant headroom for rate hikes, citing that Indian luxury hotels remain underpriced relative to international peers in major global cities.

Aggressive Expansion Strategy

The company has a robust pipeline of 21 properties totaling approximately 1,500 keys to be added over the next 2-3 years. This includes 12 domestic and 9 international hotels. With ₹1,000 crores in surplus funds, EIH is well-positioned to fund this growth through owned properties, JVs, and management contracts, aiming for a total footprint of roughly 5,700 keys in the medium term.

Navigating Business Discontinuations

Management addressed two major drags on revenue: the closure of the Oberoi Grand in Kolkata and the loss of the Bombay Airport lounge contract. The Kolkata closure impacted revenue by ₹70 crore and EBITDA by ₹43 crore, with a partial reopening expected in 12 months. The lounge business loss of ₹122 crore is being actively mitigated through increased buoyancy in the flight catering segment, which saw total OFS revenue of ₹490 crore.

Mashobra Deconsolidation and Legal Recovery

A significant one-time exceptional gain of ₹115 crore was recorded due to the deconsolidation of the Mashobra (Wildflower Hall) asset. Management expects to recover approximately ₹136 crores in advances and ₹141 crores in book value depending on the outcome of ongoing litigation. Despite the legal transition, EIH will continue to manage the property for at least the next six months.

Focus on Spiritual and International Markets

EIH is strategically targeting spiritual tourism, with a new hotel in Tirupati under development through its JV, Mumtaz. Internationally, the company saw 20% growth in the quarter, with strong demand returning to Marrakesh and Mauritius. In London, the company is seeking a 49% partner to de-risk the project as it nears opening.

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