EIHOTEL - EIH Ltd Share Price

Management provided an optimistic outlook for EIH Limited, emphasizing a robust growth trajectory driven by strong demand and strategic expansion in the hotel sector. Key forward-looking points include:

1. Revenue and Profit Performance: For FY25, the company reported an 11% growth in consolidated revenue and a 13% increase in EBITDA. The PAT grew by 6%, impacted by exceptional items. The standalone revenue grew by 9%, while PAT saw a striking 44% increase due to a one-time exceptional gain.

2. RevPAR Growth: Management expects continued growth in Revenue per Available Room (RevPAR), which recorded a growth of 14% to 16% and an average rate increase of 11% to 13% year-over-year. The occupancy rate reached 68%-70% in Q4FY25.

3. Future Expansion: EIH intends to add approximately 21 new hotels in the next 3-4 years, expanding its portfolio significantly with 1,400-1,500 new keys. This includes 12 hotels in the domestic market and 9 internationally.

4. Market Demand Drivers: The growth is underpinned by increasing air travel (9% growth in Q4), a rise in high-net-worth individuals, and a forecasted 15% increase in inbound tourism by the Government of India, aided by improved global connectivity.

5. Strategic Focus: Management aims to drive room rates higher, citing an underpricing in premier hotel segments across major cities in India. This strategy is supported by economic growth and an increase in consumer affluence.

6. Financial Strength: EIH has a cash surplus of approximately Rs.1,000 crores as of March 31, 2025, positioning the company well for future investments and expansion.

7. International Business: Despite challenges, management expects to maintain strong performances in international markets, specifically in the Middle East and notable regions such as Marrakesh and Mauritius.

Overall, management's outlook reflects confidence in the company's ability to leverage market opportunities, drive revenue growth, and expand its operational footprint.

Here are the major questions and detailed answers from the Q&A section of the earnings transcript:

Question 1: "Could you tell us how your international business was for the full year?"

Answer: Our international category contributed around Rs.131 crores to revenue and Rs.36 crores to EBITDA, reflecting a growth of 10% in revenue and a similar rise in EBITDA. This performance was bolstered by robust operations in Marrakesh and Mauritius.

Question 2: "What is the expected financial impact of the Wildflower Hall case?"

Answer: We are managing Wildflower Hall for six months. Any major financial impact will hinge on upcoming court proceedings and their judgments. While we anticipate some income from the management operations, the significant financial outcome will be determined by these legal results.

Question 3: "What will be the revenue loss due to Wildflower Hall?"

Answer: We anticipate a revenue loss of approximately Rs.78 crores from Wildflower Hall's operations, which will be impacted once the bidding process is complete.

Question 4: "How did the Kolkata business impact revenue?"

Answer: For the Kolkata business, we experienced an impact of roughly Rs.70 crores on revenue and Rs.43 crores on EBITDA for the year, due to ongoing renovations at the Oberoi Grand.

Question 5: "What are your views on pricing sustainability in spiritual destinations?"

Answer: Regarding pricing sustainability, demand for spiritual tourism remains strong due to its cultural significance, suggesting that prices will likely stay buoyant, especially as we plan to open a hotel in Tirupati.

Question 6: "Can you specify your expansion strategy regarding domestic vs. international hotels?"

Answer: Our primary focus remains on India and the Indian subcontinent, despite having some international properties. We have plans for approximately 21 hotels, with 12 in India and 9 abroad, reflecting our commitment to enhancing our domestic presence.