Indian Hotels Q3 Results Review - Improvement In Realisations, Occupancies: Axis Securities

Axis Securities Report

The Indian Hotels Company Ltd.'s reported consolidated revenue growth of 16.5% YoY, in line with our expectations. The Q3 is seasonally a strong quarter and this growth was mainly due to the increase in revenue per available room to Rs 9,840, up 24.9% YoY in domestic hotels. Indian Hotels’ RevPAR in international assets, U.S. declined by -3.0% YoY while increasing by 10% YoY in the UK respectively.

It reported an consolidated Ebitda margins of 37.3%, up 187 basis points YoY however impacted by Ebitda losses - 1.1% in U.S. opeartions. Profit after tax stood at Rs 477 crore, up 18.2% YoY, led by revenue growth and strong operating leverage.

The standalone business reported a 470 bps YoY improvement in occupancies to 76.8% and a +17.2% YoY increase in realizations to Rs 18,111 compared to Q3 FY23.

Key risks to our estimates and target price

The economic slowdown in India may impact the demand for the travel Industry.

An increase in supply could impact the realisations of the company.

Negative operating leverage is a big hurdle to sustaining Ebitda margins.

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