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    EIH

    EIHOTELGood
    Consumer Services·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

    7

    • 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

    Metrics

    6

    Periods

    2

    Headline

    5
    • 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

    1
    • Occupancy
      82%
      YoY+1.2%

    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
    List

    Guidance & targets

    4
    CategoryTargetPriority
    Capacity
    New Hotel Properties
    21
    		High
    Capacity
    Total Keys Addition
    1,400-1,500
    		High
    Other
    Oberoi Grand Reopening
    12 months
    		Medium
    Other
    London Subsidiary Partner Stake
    49%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Loss of Airport Lounge Business

    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

    medium

    Geopolitical Conflict Impact

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

    low

    Oberoi Grand Closure

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

    medium

    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

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    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.