Indian Hotels Company Limited posted a solid performance in the June quarter (Q1FY23). Occupancy and average room rates exceeded pre-Covid levels as demand improved across markets and regions. As a result, the company turned Profit after Tax in Q1 with Consolidated Profit 170 Crore Vs. 277 crore in the same quarter last year.
Management expects business momentum to continue in Q1 as demand continues to improve from the corporate journey. In the previous quarter, the revenue per available room in the major metro markets of Mumbai, Bengaluru and Delhi and NCR improved faster than the industry. Further, hotel demand, led by international travelers, is expected to return in Q3 FY23, following the Diwali festival, with demand for the company’s hotels in places like Rajasthan and Goa picking up, the management said in its earnings call. Told. International travel had contributed around 15% to the company’s pre-Covid revenue.
see full image
Leisure and business travel is booming and investor sentiment towards hotel stocks is upbeat.
In CY22, Indian Hotels stock has gained almost 50%, while Nifty 500 index has given negative returns. The stock is trading near its 52 week high 275.30 Viewed 4 Aug.
“Hotel stocks are seen to benefit from easing COVID fears, supporting domestic leisure and business travel demand. The presence of Indian Hotels at various price points means that it is better positioned than peers that have greater exposure to the business travel segment. Shobit Singhal, Analyst, Anand Rathi Shares & Stock Brokers, said debt reduction and sticking to an asset-light model for expansion are other positives for the company.
Investors are likely to cheer for Indian Hotels’ stellar Q1 performance, but a sharp and a sustainable move will depend on absorption of higher room rates, particularly in the leisure segment and how the company’s Avon 2025 growth strategy pans out . One objective is to achieve a consolidated income before interest, tax, depreciation and amortization (Ebitda) margin of 33% by FY26.
“The Indian Hotels result will help the investor sentiment towards the sector and we expect it to meet the EBITDA margin guidance ahead of schedule. That said, most of the positives are price-to-value and a meaningful bounce is unlikely in the near term,” said an analyst at a domestic brokerage house, requesting anonymity. Also, from a possible spread of monkeypox or war. Emerging external risks may hinder foreign tourist-led demand for hotels.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.