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Business News/ Companies / News/  IHCL will remain India’s No. 1 hotel company, says CEO
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IHCL will remain India’s No. 1 hotel company, says CEO

Indian Hotels Company, which operates Taj Hotels, SeleQtions, Vivanta, Ginger and ama has posted an 18% jump in Q3 net profit, with revenue crossing ₹2,000 crore

Puneet Chhatwal, CEO, Indian HotelsPremium
Puneet Chhatwal, CEO, Indian Hotels

MUMBAI: Indian Hotels Company Ltd (IHCL), which operates flagship hotels under the Taj brand as well as SeleQtions, Vivanta and Ginger Hotels, has opened six new hotels in the October-December quarter and two more in January, the company’s managing director and CEO Puneet Chhatwal said. He added that with most new hotels being built on asset-light models, they will deliver high margins.

“Next financial year, we will have almost two new hotels per year and 25 (new hotels) in total," Chhatwal told Mint. “While in January we also crossed the 200 operational hotel mark, by December, we will have 200 hotels in India alone." Currently, IHCL has 184 operational hotels in India.

IHCL posted a consolidated net profit of 452 crore in the quarter, an 18% jump on a year-on-year (y-o-y) basis. Consolidated revenues, at 2,000 crore, were up 15% y-o-y. Meanwhile, consolidated EBITDA (earnings before interest, tax, depreciation and amortization) rose 18% to 772 crore, while the EBITDA margin expanded by 100 basis points to 38.5% y-o-y.

On Friday, shares of IHCL were trading 1.7% higher at 502.80 on the BSE following the positive earnings.

“We are very proud with an all-time high, record financial performance for the seventh consecutive quarter. We are on track with our guidance of Ahvaan 2025, which is a portfolio of 300 hotels, 33% Ebitda margin with 35% Ebitda share from new businesses and management fees by FY2025-26," Chhatwal said. “Our market cap has crossed 70,000 crore, we have zero debt and a robust pipeline of 85 hotels. We are and will remain the number one hospitality company in the country."

In May 2022, IHCL announced Ahvaan 2025, its three-pronged strategy to grow profitably in the coming years.

The results were declared on the same day that Finance Minister Nirmala Sitharaman made her interim budget speech, where she announced the government’s focus on developing new tourist destinations, boosting domestic tourism, and promoting spiritual tourism. In that context, Chhatwal said that IHCL already has 65 properties in more than 50 spiritual destinations in India, including Banaras, Haridwar, Rishikesh, Amritsar and Ajmer. It has already signed three hotels in Ayodhya, with 400 rooms. The first hotel will come up next year.

IHCL’s new business vertical comprising Ginger, Qmin, amã Stays & Trails, The Chambers (membership fee) and TajSATS reported a revenue of 420 crore, registering a 33% jump over the previous year. In comparison, its enterprise revenue grew 17%. The company disclosed that new business now accounts for an 11.1% share of the enterprise revenue, an expansion of 130 bps from 9.8% in the previous year. Enterprise revenue includes revenue across all businesses agnostic of ownership.

Chhatwal added that the company’s UK and US properties have not yet recovered to their full potential, and he expects them to start performing soon. “I don’t see any challenge in our growth in the near future as we have a portfolio strategy that absorbs and mitigates any volatility—natural or manmade—in any particular market," he added.

Withing new businesses, airline catering company TajSATS clocked a revenue of 233 crore, registering a 34% growth y-o-y, while maintaining an EBITDA margin of 25.8%. Its budget hotel brand Ginger reported a revenue of 134 crore, a 34% growth over the previous year with an Ebitdar (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) margin of 44%.

The new flagship Ginger Mumbai Airport clocked an 80% occupancy and a positive net profit in its first month, with an average room tariff of 6,600 per night.

 

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ABOUT THE AUTHOR
Gaurav Laghate
Gaurav Laghate is a journalist with extensive experience in the media and entertainment industry. He currently serves as Senior Editor at Mint, where he oversees the consumer vertical. With a career spanning over 15 years, Laghate has established himself as an expert in business journalism, particularly focusing on the Indian market, technology, media, sports business, and corporate investments. Before joining Mint, Laghate worked with several notable publications such as The Economic Times, Business Standard and Television Post, where he tracked industry trends and provided in-depth analyses on various topics within the media and entertainment sectors. His work is known for its insightful commentary and detailed reporting on mergers, company strategies, new product launches, and industry insights from key players.
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Published: 02 Feb 2024, 11:44 AM IST
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