Mumbai: Indian Hotels Co Ltd on Tuesday reported a 57% rise in quarterly net profit, helped by higher occupancy and room rates, and said it expected founders to infuse Rs400 crore in the company by June next year.
The company reported a stand-alone net profit of Rs939.3 million in January-March on net sales of Rs531 crore.
The company’s consolidated annual loss narrowed to Rs872.6 million in FY11 from Rs137 crore last year with its US operations continuing to eat into its profitability.
The company operates three properties in the US and expects the US operations to break even in the next 2 years, chief financial officer Anil Goel said.
The Asia-Pacific market would continue to be a high-growth area for the company, managing director Raymond Bickson said.
“Companies are likely to increase spend on corporate travel. Discretionary spend is also expected to increase further, especially in leisure travel,” he said.
The hotel operator, which runs the Taj brand in the luxury five-star segment, the Vivanta brand in the four-star segment, Gateway Hotels in the three star-segment and Ginger in the budget space, expects a 5-10% increase in average room rentals in FY12, said Ajoy Misra, senior vice president, sales marketing.
The firm, which has a consolidated net debt of Rs3,600 crore as on 31 March, expects to receive an equity infusion of Rs400 crore from founders by June next year, which could help to cut the debt as well as meet business needs.
The firm plans to invest not more than Rs510 million to raise stake in Piem Hotels Ltd and make the latter its unit, it said in a statement.
Indian Hotels, as of now, holds 46.2% in Piem Hotels and the proposed transaction would be completed this month.
The hotel company, which currently operates 107 hotels and has close to 13,000 rooms, plans to add 16 new hotels or 2,143 rooms by end of FY12, Bickson said.
Shares of Indian Hotels Co closed at Rs79 on Tuesday, up 0.38% in a Mumbai market that ended up 0.1%.