Indian Hotels Co

Indian Hotels Co achieved its highest ever quarterly EBITDA, crossing INR 1,000 crores, and a record PAT of INR 582 crores. Consolidated revenue grew by 29% year-on-year to INR 2,592 crores, with EBITDA margin expanding by 80 basis points to 39.4%. The hotel segment alone saw 16% revenue growth and a 230 basis point EBITDA margin expansion to 40.9%.

The company reported a 13% consolidated RevPAR growth on a domestic like-for-like basis, maintaining a 78% premium over the industry average in the Indian market. Management emphasized prioritizing ARR growth over pushing occupancy beyond optimal levels (78-80%), indicating strong pricing power and a focus on revenue quality. This strategy is supported by the belief that current pricing is still below historical peaks in real terms and not yet sufficient to trigger significant new supply.

IHCL continued its robust expansion, signing 20 new hotels and opening 8 in Q3 FY25. For the current financial year (April-December), 55 hotels have been signed and 20 opened, contributing to a total portfolio of 360 hotels and an industry-leading pipeline of 123 hotels as of December 31, 2024. The company targets opening 25 hotels in FY25 and 30 in FY26, demonstrating a clear growth trajectory.

The new businesses vertical, including Reimagined Ginger, Qmin, and amã Stays & Trails, delivered a 40% top-line growth in Q3. Ginger's consolidated revenue grew 43% year-on-year to INR 157 crores, with EBITDA margin expanding by 200 basis points to 45%. Qmin's Gross Merchandise Value (GMV) crossed INR 150 crores, and amã Stays & Trails reached 250 bungalows in its portfolio, highlighting successful diversification efforts.

IHCL is committed to digital transformation, launching redesigned websites for Taj Hotels and amã Stays & Trails, with Ginger and Vivanta sites to follow. The Tata Neu loyalty platform now boasts 8 million members, contributing 40% to enterprise revenue. On sustainability, IHCL uses 37% renewable energy and recycles 48% of water, targeting 50% renewable energy and 100% recycled water by 2030.

The company continues to invest in asset management, including renovations at properties like Taj Mansingh and Holiday Village, and strategic upgrades of Vivanta hotels to the Taj brand, explaining a decline in Vivanta rooms. The long-pending Sea Rock project received the Intimation Of Disapproval (IOD) and is awaiting the Commencement Certificate (CC), with construction expected to begin in the second half of the year.

The international consolidated portfolio reported double-digit revenue growth, driven by strong performance at The Pierre in New York. While San Francisco's market is improving after past labor strikes, London faces softness due to new supply. However, IHCL expects to hold its ground in London due to strong brand equity and ongoing asset upgrades, maintaining a positive outlook for its international operations.