The Indian Hotels Company Limited

Indian Hotels Co reported its 15th consecutive quarter of record performance in Q3 FY26. Consolidated revenue grew 12% year-on-year to INR 2,900 crores, with EBITDA increasing 11% year-on-year to INR 1,134 crores, achieving a 39.1% margin. Consolidated PAT before exceptional items^📎 reached a historic high of INR 668 crores, up 15% year-on-year. The hotel segment's EBITDA surpassed INR 1,000 crores for the first time, with a 40.7% margin, while standalone revenue grew 9% to INR 1,654 crores with a 48.2% EBITDA margin.

The company highlighted its highly diversified business model, with the Taj luxury segment contributing 69% of operating revenue. New business verticals, including Ginger, Qmin, amã, and Tree of Life, now contribute 8% of total revenue, while TajSATS accounts for 13%, and upper upscale brands (Vivanta, SeleQtions, Gateway) contribute 10%. This balanced brand architecture allows for premium pricing while participating in structural growth across various segments and geographies, with 53% of revenue from domestic business cities, 15% from domestic leisure, and 22% from international markets.

IHCL's total portfolio stands at 617 hotels, comprising 361 operating hotels and 256 in the pipeline, spanning 15 countries and over 300 unique locations. The company has 32,300 operational keys and an almost equal 30,200 keys under development. A significant 94% of this pipeline is on a capital-light model (managed or fully fitted revenue share lease structures), a substantial shift from 8 years ago when capital-heavy models constituted 78% of the portfolio. This strategy enhances forward visibility on earnings growth with limited balance sheet intensity.

IHCL completed the acquisition of 51% stakes in ANK and Pride, and Atmantan, and signed a definitive agreement for a 51% stake in Brij, expected to close by March 31, 2026. These transactions are projected to contribute INR 250-300 crores to IHCL's consolidated topline in FY27. Notably, the company also divested its stake in TAJGVK, generating INR 592 crores in cash while retaining management contracts for all GVK hotels, demonstrating disciplined capital allocation and portfolio sharpening.

Management expressed confidence in delivering double-digit revenue growth for FY26 and FY27, with Q4 FY26 topline growth projected at a realistic 12-14% and RevPAR growth at 9-10%. Key growth drivers include continued favorable demand-supply dynamics, a strong forward pipeline with over 60 openings in FY27, high-teens growth in management fee income, and 25%+ revenue growth from new business verticals. The Taj Bandstand project, upon stabilization, is expected to contribute over INR 1,000 crores to topline with 50% EBITDA margins.

The Atmantan acquisition marks IHCL's strategic entry into the fast-growing integrated wellness segment, with the property projected to generate INR 100 crores in FY27 at 40-45% margins. The company plans to expand this segment by adding 3-5 more Atmantan properties by 2030, utilizing a hybrid ownership model. In the mid-scale segment, the combined portfolio of Ginger, ANK, and Pride will comprise over 250 hotels and 10,000 operating keys, securing approximately 24% market share in branded mid-scale inventory.

IHCL plans approximately INR 1,000 crores in CAPEX for FY26, covering routine maintenance, new projects, and renovations, with a similar amount projected for FY27 (+/-5-10%). The company maintains a healthy balance sheet with gross cash reserves exceeding INR 3,800 crores and no debt, enabling it to fund growth and strategic acquisitions. One-off^📎 expenses of INR 20-25 crores in Q3 FY26, related to legal, technical, and deal costs, as well as GST, impacted margins but are expected to normalize^📎, with GST impact neutralizing in the next quarter.