INDHOTEL - Indian Hotels Co. Ltd Share Price

Outlook by Management:
IHCL anticipates Q4 FY2024-25 to mirror Q3's strong performance, driven by double-digit revenue growth, sustained margins, and key events like Mahakumbh, Cold Play concerts, and an extended wedding season. The company remains confident in achieving its FY2025 guidance, targeting 25 hotel openings (potentially 30 in FY2026). Long-term growth is underpinned by India's demand-supply imbalance, GDP growth, and infrastructure development. International markets (U.S., U.K.) are expected to improve, with foreign tourist arrivals yet to rebound fully.

Major Highlights:

1. Financial Performance: Record quarterly EBITDA exceeding Rs.1,000 crores, 29% consolidated revenue growth, and 80 bps margin expansion. Standalone PAT rose 23% to Rs.469 crores.
2. RevPAR Growth: 13% domestic RevPAR growth, maintaining a 78% premium over industry averages. International portfolio (e.g., The Pierre, NYC) delivered double-digit revenue growth.
3. Expansion: 55 hotels signed and 20 opened in 9M FY25. Portfolio reached 360 hotels with a pipeline of 123.
4. Capital-Light Strategy: Management fees surged 32% YoY to Rs.177 crores, aided by 13% net room growth and new fee streams (brand/technical fees).
5. New Businesses: Ginger (+43% revenue), Qmin (60+ outlets), and amã Stays & Trails (250 bungalows) grew 40% collectively.
6. Cost/Digital Focus: Hotel EBITDA margins expanded 210 bps; digital upgrades (SAP, cloud PMS) and new brand websites underway.
7. Loyalty Program: Tata Neu reached 8M members, contributing 40% to enterprise revenue.
8. Talent & Sustainability: Investments in training/scholarships; 37% renewable energy use and 48% water recycling under Paathya.
9. Asset Upgrades: Renovations (e.g., Taj Mansingh, Goa properties) driving competitive positioning.
10. Supply-Demand Dynamics: Structural demand outstrips supply, supporting pricing power. Currency tailwinds and premiumization trends bolster resilience.

Note: Response length compliant with 2000 characters.

Question 1:
"Regarding the occupancy in the standalone business...we have seen a flat occupancy while our ARR has grown by almost 13% Y-o-Y...can you throw some light on the flattish occupancy this quarter?"

Answer Summary:
IHCL's standalone occupancy remained high at 78%, prioritizing rate-driven growth over pushing occupancy higher. This strategy enhances margins, leveraging sustained demand outpacing supply and renovations. RevPAR growth (13%) reflects ARR-focused optimization, maintaining premium positioning without compromising profitability.

Question 2:
"How was [performance] for our hotel properties in Goa...have you seen such kind of impact...or because we are seeing a 2% kind of growth in citywide?"

Answer Summary:
Goa's performance aligned with enterprise growth (~5%), operating at a high base with completed renovations affecting consolidated numbers. Demand remained robust across markets (e.g., Rajasthan, Delhi, Mumbai), offsetting localized challenges.

Question 3:
"Any early signs you can sort of indicate for FY '26...based on bookings?"

Answer Summary:
FY26 expectations remain positive due to structural demand-supply imbalances, GDP growth, and a strong pipeline (>50% capital-light). Events like extended wedding seasons and foreign tourism recovery are tailwinds, with no near-term normalization expected.

Question 4:
"Any color on how do we see the RevPAR growth and occupancy levels year-on-year [in Q4]?"

Answer Summary:
Q4 RevPAR growth is projected at high single-to-low double digits, mirroring Q3 trends. Demand remains resilient across city and leisure segments, supported by events (e.g., Mahakumbh, concerts) and no signs of slowdown.

Question 5:
"Can we expect a similar sort of ARR growth for Ginger as we are seeing for the other brands?"

Answer Summary:
Ginger's growth (43% revenue YoY) stems from new openings, Qmin integration, and renovated properties. RevPAR growth is high single-to-mid digits, with renovated hotels outperforming. F&B contributes ~25% to revenue, enhancing value.

Question 6:
"Updates on Sea Rock?"

Answer Summary:
Sea Rock secured critical approvals (IOD), pending airport height clearance. Construction is expected to start in H2 2025, aligning with prior guidance. Delays stemmed from regulatory processes, but progress is significant.

Question 7:
"How do you see the U.S. and U.K. subsidiaries performing...any demand outlook changes?"

Answer Summary:
U.S. performance improves post-San Francisco recovery; The Pierre (NYC) remains strong. London faces softer demand due to supply but benefits from Taj's brand equity and renovations. Both markets aim for steady growth amid macro challenges.

Question 8:
"Regarding the hotel opening in Uttarakhand...how does the franchisee model differentiate?"

Answer Summary:
The Uttarakhand franchise is an exception with a trusted partner, leveraging their operational expertise. IHCL's focus remains on management contracts, but franchise models are selectively used for strategic, long-term relationships.

Question 9:
"What is the reason for Vivanta's portfolio churn...and managed fees' "˜other fees' component?"

Answer Summary:
Vivanta's room count change reflects upgrades to Taj (e.g., Surajkund, Srinagar). "Other fees" (INR 10 Cr) include brand fees (e.g., branded residences) and technical fees from signings, expected to grow with projects.

Question 10:
"Do you track repeat customer trends...via loyalty programs?"

Answer Summary:
Loyalty-driven revenue (40% for Ginger) and Tata Neu's 8M members highlight growing engagement. Repeat business is rising, especially in mid-scale segments, though luxury stays are less point-driven. Active users surged post-Neu integration.