Taj Hotel parent posts 37% rise in Q2 profit, revenue up 18%
- Even Delhi, Rajasthan, Goa and Bengaluru properties reported strong numbers
Mumbai: The Indian Hotels Co. Ltd which operates the Taj brand of hotels besides SeleQtions, Vivanta and Ginger Hotels, reposted a consolidated net profit of ₹167 crore in the September quarter, up 37% from a year earlier. Its revenue grew 18% to ₹1,481 crore, while consolidated earnings before interest, taxes, depreciation and amortization (ebitda) was up 26% to ₹402 crore.
Ebitda margin expanded by 180 basis points to 27.2%.
“We are pleased with the performance. This is the best-ever second-quarter performance and key focus remains to be most iconic and most profitable brand in the business,” Puneet Chhatwal, managing director and chief executive, IHCL told Mint in a post-earnings call.
In the quarter under review, the company signed six hotels, including three under the Taj brand, in its international markets, a 134-room property in Frankfurt, besides two hotels in Bhutan, and two SeleQtions hotels (Himachal Pradesh and Goa), and one Ginger hotel in Assam. The company has also opened three hotels, taking its total operating assets to 192 across brands, including two Taj hotels—Taj The Trees in Mumbai and Taj Guras Kutir Resort and Spa, Gangtok. The SeleQtions brand launched its first property in Indore with a 125-room hotel.
“The momentum continued and IHCL is on a roll. We have opened eight hotels this year and will open more. There is a strong demand and positive sentiment, which is making it a bullish environment for the entire industry. We are outperforming in industry metrics like average rates, occupancy and RevPAR (revenue per available room)” he said.
IHCL’s domestic hotels had an average room rate (ARR) of ₹9,300 per night, compared to industry average of ₹6,700. Its occupancy was at 70% for the quarter, as against 60% of the industry, while RevPAR was at ₹6,500 (compared to ₹4,000 per night for the industry).
It continued to post robust performance from its top 10 markets, with its flagship hotel in Mumbai crossing 80% occupancy. Even Delhi, Rajasthan, Goa and Bengaluru properties reported strong numbers, he said. “With pan India presence we have been able to decline dependency across a few properties or events.”
“There were some grey areas with floods in Uttarakhand and Bhutan and Nipah virus in Kerala, which impacted these markets. But overall performance has more than mitigated these impacts,” Chhatwal added.
Chhatwal said that there is still headroom to grow per night room rates, which are now 20-30% of international properties. “We have been able to grow RevPAR at 15-20%, at a healthy occupancy, which shows there is enough room to grow,” he added.
The flagship Taj Hotel’s RevPAR during the quarter saw a 15% jump, while Vivanta and SeleQtions commanded a 16% increase over the year-ago period. Ginger Hotel’s RevPAR also surged by 14%, the company said.
For the company, some of the international properties, including those in San Francisco and New York are yet to reach the pre-Covid level, while London (St James Court) has started delivering good business.
“Overall, there is a strong domestic demand. Our flagship in Delhi, the Taj Mahal, is fully renovated and is back in business. We did great business during G20 and this month we had the P20 Summit (G20 Parliamentary Speakers’ Summit), which again resulted in big numbers,” he said.
The company is on track to its guidance of opening 20 hotels in the current fiscal, out of which 9 have been opened year-to-date. “We will open if not two, at least 1.7-1.8 hotels per month,” Chhatwal added.
The company is awaiting final clearances to open its 371-room Ginger Hotel in Mumbai near the airport, and will do soft opening of the iconic Taj Malabar in Kochi soon. It also recently reopened renovated Taj Usha Kiran Palace in Gwalior.
Ginger reported an enterprise revenue exceeding ₹100 crore with a 24% growth over the previous year and EBITDA margins at 34% in Q2.
Meanwhile, the air catering business TajSATS also clocked revenue of ₹213 crore, 48% growth over the previous year, maintaining an EBITDA margin of 24%.
“TajSATS is a big opportunity. We already have a 59% market share of all inflight meals and recently signed a deal with the Noida International Airport (NIA) for a state-of-the-art inflight kitchen at the upcoming Jewar airport. It is soon going to be a ₹1,000 business,” Chhatwal added.
Meanwhile, the board of the company also approved the issuance of equity shares to New Vernon and TICL on a preferential basis. The Tata subsidiary will issue equity shares to both companies having a face value of Re 1 each, for consideration other than cash.
After the allotment of shares on a preferential basis, New Vernon will hold around 1.27% of IHCL (approx 2,899,996 shares), while TICL will hold a total of 17,989,686 shares post preferential allotment.
The exact number of IHCL shares to be held by the two firms will be calculated on the relevant date. The total number of shares to be issued will be based on the issue prices which will be determined based on a range of factors including the share swap ratio, floor price and the fair value per equity share on the Relevant Date, which is 2 November.
IHCL shares closed 0.11% lower at ₹374.65 per share on BSE on Friday.
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Business NewsIndustryTaj Hotel parent posts 37% rise in Q2 profit, revenue up 18%
First Published:28 Oct 2023, 01:08 AM IST
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