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EIH seen clocking more revenue, profit on higher occupancy

EIH seen clocking more revenue, profit on higher occupancy
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First Published: Wed, Jun 13 2007. 12 06 AM IST
Updated: Wed, Jun 13 2007. 12 06 AM IST
EIH Ltd, the owners of The Oberoi Group of hotels and resorts, may say sales rose between 23-35% in the fourth quarter ended March, from a year ago because more people stayed in its rooms and they got more money per room.
Revenues may rise to Rs280-350 crore for the period, according to three analysts. The net profit for the period is expected to rise 20-80% to between Rs31 crore and Rs67 crore, they estimated. The lower number comes from an analyst who has estimated lower profit margins. For the full year, the company may say sales rose as much as 18.6% from a year ago to Rs965 crore.
EIH Ltd is one of the three largest hotel companies in India by number of properties, alongside ITC Ltd, a diversified company, and The Indian Hotels Co. Ltd (IHCL), of the Taj Group of hotels. Focusing on luxury tourism, the Oberoi Group runs 33 hotels and river cruisers in India, Egypt, Indonesia, Mauritius, the?Maldives?and?Saudi?Arabia.
Analysts said that EIH’s revenue and profit figures will not exceed that of its competitors—particularly IHCL, which has diversified out of the premium segment. IHCL has a budget-hotel brand, Ginger, and it has made several major hotel acquisitions in the US such as The Campton Place in San Francisco, California, which will boost its sales.
Premium-class hotels in India have seen enormous growth in revenues in the recent past, in large part due to a gap between supply and demand of hotel rooms and high economic growth.
According to a report from global hospitality consultants HVS International, occupancy rates for five-star deluxe hotels—the highest category in India—increased 22.3 percentage points to 74.5% from fiscal 2002 to fiscal 2006. Revenue per available room increased 117% in the same period to Rs5,289 for five-star deluxe hotel properties.
Officials at EIH could not be reached for comment. They are expected to announce their results on 15 June. Shares of EIH rose 0.25% to Rs98.55 on Tuesday and have risen 31% in a year. Shares of rival IHCL have risen about 40% in the same period to Rs138.95.
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First Published: Wed, Jun 13 2007. 12 06 AM IST