Whalesbook
Indian Hotels Company (IHCL) reported consolidated revenue of ₹2,765 crore for the fourth quarter, marking a 14% increase year-on-year. EBITDA grew to ₹973 crore with margins at 35.2%, and adjusted profit after tax reached ₹600 crore, up nearly 15%. The company navigated disruptions from the West Asia conflict, which led to consolidated cancellations worth ₹400-500 crore. Management indicated an enterprise-level revenue impact closer to ₹1,000 crore.
Growth trends showed a moderation in March to 11% from 15% in January and February, coinciding with the impact of geopolitical events. Standalone revenue saw a 12% year-on-year rise to ₹1,660 crore, with EBITDA and PAT excluding exceptional items climbing 17% and 24% respectively. Domestic same-store RevPAR increased by 11.6%, driven by a 15% jump in room revenue, underscoring resilient local demand.
Domestic demand remained the primary growth engine, with leisure travel holding firm and business travel showing gradual recovery across urban markets. Goa, in particular, reported robust growth around 25% in March-April. Properties in Mumbai continued to operate at over 90% occupancy, while the foreign guest mix remained stable at approximately 30% for standalone operations.
Nuvama's Growth Outlook
Brokerage firm Nuvama upgraded IHCL to a 'Hold' rating from 'Reduce' and raised its price target to ₹676. The firm cited higher visibility of non-like-for-like growth as a key driver. IHCL's operational portfolio comprises 375 hotels with over 33,000 keys, complemented by a pipeline of 254 hotels adding another 31,300 keys, largely in asset-light or managed formats. Management has guided for 12-14% revenue growth in FY27, supported by over 60 new hotel openings and room additions. Nuvama anticipates around 4-5% of this growth from non-like-for-like contributions, with rate-led growth contributing 7-9% to ARR and RevPAR. India's upcoming BRICS presidency in CY26 is also flagged as a potential tailwind for diplomatic travel.
Key Risks and Valuation
Despite the upgrade, Nuvama maintained a 'Hold' rating, flagging the Prime Minister's austerity announcement as a potential overhang on domestic travel spending. The brokerage also noted that growth dependent on new hotel launches faces historical risks of delays, such as the Taj Frankfurt opening being pushed to FY27. IHCL's commentary was described as more cautious than usual. The stock is currently trading at approximately 27 times its FY27 and 23 times its FY28 estimated EV/EBITDA.