Indian Hotels Shares Fall over 5% Following Q4 Results

06 May 2025

2 min read

Indian Hotels Shares Fall over 5% Following Q4 Results

Indian Hotels Company Ltd (IHCL) shares experienced a notable decline in morning trade on Tuesday, 6 May 2025, following the announcement of its fourth quarter (Q4 FY25) results after market hours on Monday. The stock, part of the Rakesh Jhunjhunwala and Associates' portfolio, opened higher at ₹812.80 compared to its previous close of ₹801.80 on the BSE but quickly erased gains. It subsequently slipped to a day's low of ₹765.50, marking a drop of more than 4%. The shares are currently trading at ₹759, declining by 5.24%.

Q4 FY25 Performance Highlights

IHCL reported a strong performance for the March quarter. The standalone net profit saw a 30.4% year-over-year (YoY) increase, rising to ₹481.20 crore from ₹369.08 crore in Q4 FY24. Sequentially, the profit also increased by 2.7% from ₹468.77 crore in Q3 FY25. Revenue from operations on a standalone basis for Q4 FY25 stood at ₹1,476.33 crore, up 10% YoY from ₹1,341.65 crore in the same period last year. This figure remained flat compared to the previous quarter's ₹1,473.61 crore.

On a consolidated basis, net profit increased by 27% YoY to ₹522.30 crore, up from ₹417.76 crore in Q4 FY24. Consolidated operating revenue also saw a significant 27% YoY increase, reaching ₹2,425.14 crore from ₹1,905.34 crore in the prior year's quarter. The company's consolidated EBITDA jumped 30% to ₹856.6 crore, with the margin improving to 35.3% from 34.6% the previous year. The hotel segment revenue at the group level grew by 13%, resulting in an EBITDA margin of 38.5%.

Analyst Sentiment: Mixed Views on Valuation

Indian Hotels has drawn mixed views from the market despite strong Q4 performance, with revenue, EBITDA, and net profit growing 27%, 30%, and 26% YoY respectively. The core hotel segment saw revenue and EBITDA growth of 13% and 20%. The company continues to benefit from robust domestic travel demand, a strong wedding calendar, and improving foreign tourist arrivals. A pipeline of 15,900 rooms and planned renovations at key properties further support its medium-term growth outlook. While some remain optimistic, expecting 16-18% CAGR in earnings through FY25-FY28, others flag concerns over stretched valuations, suggesting the stock has run ahead of fundamentals. Price targets range from ₹628 to ₹980, reflecting divergent views on current valuations.

Management Outlook and Investment Plans

Indian Hotels Company Ltd (IHCL) reported its 12th consecutive quarter of record-breaking performance, reflecting strong operational momentum. The company remains confident about sustained growth in FY26, supported by robust demand during the wedding season and healthy advance bookings. It continues to project double-digit revenue growth for the upcoming fiscal year, driven by strong performance in existing properties, the scaling of new businesses, and plans to open 30 new hotels.

For FY26, IHCL has earmarked over ₹1,200 crore for investments in asset upgrades, management initiatives, and new developments, with a strategic emphasis on enhancing the Taj brand and advancing digital capabilities. The group currently has a portfolio of 380 hotels comprising 45,994 rooms, including 243 operational hotels with 26,494 rooms.