EIHOTEL - EIH

📊 NSE: EIHOTEL 🏢 Hotels 📅 Last Updated: 12/13/2025 21:45

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew 24% YoY in FY24 to INR 2,511.46 Cr, following a 100% growth in FY23 to INR 2,019.01 Cr. Q2FY26 revenue grew 2% YoY to INR 597.9 Cr, though growth was tempered by the absence of revenue from The Oberoi Grand and Oberoi Airport Services.

Geographic Revenue Split

The portfolio is geographically diversified across India (Udaipur, Jaipur, Chandigarh, Shimla, Agra, Chennai, Bhubaneswar) and international markets. International hotels saw a RevPAR growth of 7% to 8% in Q2FY26. Domestic air passenger traffic, a key driver, declined by 2.4% in Q2FY26 affecting domestic segments.

Profitability Margins

PAT for FY24 was INR 677.71 Cr (27% margin) and increased to INR 769.90 Cr in FY25. However, Q2FY26 PAT dropped significantly to INR 36.88 Cr due to operational adjustments and the closure of specific units. Profitability is supported by high ARRs of INR 16,471 in FY23, up 67% from FY22.

EBITDA Margin

PBILDT margin was 30% in Q1FY25, a slight moderation from 34% in Q1FY24 due to rising employee and maintenance costs. Q2FY26 EBITDA was INR 188.5 Cr, a 9% decline YoY from INR 208.2 Cr, primarily due to the exit of The Oberoi Grand and Airport Services from the current year's financials.

Capital Expenditure

Planned average annual Capex is INR 400 to 500 Cr over the next 3-5 years. Key projects include expansion in Goa and the Hebbal project in Bengaluru. Total funds position as of Sept 2025 stands at a healthy INR 1,057 Cr to support these expansions.

Credit Rating & Borrowing

Short-term instruments are rated CARE A1+. The company is net debt negative as of March 31, 2023, with a robust capital structure. Management guides that overall gearing will not exceed 0.2x even after accounting for future debt-funded capex.

⚙️ Operational Drivers

Raw Materials

Consumption of provisions, wines, and other perishables represents approximately 10.5% of total revenue, amounting to INR 62.7 Cr in Q2FY26.

Capacity Expansion

Current capacity is 4,144 keys across 30 hotels (9 owned, 21 managed). The company has a strategic vision to open 50 new properties by 2030, with 10 projects currently under planning and development in locations like Madhya Pradesh, Goa, and Thailand to be completed over the next four fiscals.

Raw Material Costs

Consumption costs increased 10.2% YoY in Q2FY26 to INR 62.7 Cr from INR 56.9 Cr. Procurement is managed to support premium luxury standards across the Oberoi and Trident brands.

Manufacturing Efficiency

Portfolio occupancy increased to 73% in FY23 from 47% in FY22. RevPAR growth of 8% to 10% in H1FY26 indicates high asset utilization and pricing efficiency.

📈 Strategic Growth

Expected Growth Rate

24%

Growth Strategy

Growth will be achieved through a 'capital-light' expansion model increasing the number of managed properties, which are margin-accretive. The company is targeting 50 new hotels by 2030 and is currently developing 10 projects in high-growth leisure destinations like Goa and international markets like Nepal and Thailand.

Products & Services

Luxury hotel accommodations, managed hotel services, airline catering, airport restaurant/lounge operations, air charter services, and car hire/leasing.

Brand Portfolio

Oberoi, Trident.

New Products/Services

Expansion into new leisure destinations like Madhya Pradesh and Andhra Pradesh; managed contracts are expected to be margin-accretive despite lower revenue share percentages.

Market Expansion

Targeting 10 new projects in the next four fiscals across India, Nepal, and Thailand to capture rising domestic and international leisure demand.

Market Share & Ranking

Maintains a leading position in the Indian luxury hospitality segment with RevPAR consistently higher than the industry average.

Strategic Alliances

Joint ventures include Mumtaz Hotels (102 keys) and various management contracts with property owners for 21 of their 30 hotels.

🌍 External Factors

Industry Trends

The industry is in an upcycle with RevPAR increasing 8-10% YoY. Trends show a shift toward managed contracts (asset-light) and a strong recovery in weddings and corporate MICE events post-pandemic.

Competitive Landscape

Competes with global and domestic luxury chains; competition is increasing due to rising room supply in major Indian metros.

Competitive Moat

The 'Oberoi' brand equity and premium service standards create a high barrier to entry. This moat is sustainable due to consistently higher-than-average RevPAR and a strong tangible net worth of INR 3,691.44 Cr providing financial flexibility.

Macro Economic Sensitivity

Highly sensitive to GDP growth and tourist arrival trends. A decline in domestic air passenger traffic by 2.4% in Q2FY26 correlated with slower revenue growth.

Consumer Behavior

Shift toward luxury leisure travel and high-end social events (weddings) is driving demand for premium properties.

Geopolitical Risks

International travel continues to be impacted by geo-political disruptions in key markets, affecting the inflow of high-spending overseas tourists.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to government policies on tourism, international travel regulations, and local hospitality standards. Compliance with SEBI Regulation 30(6) for investor disclosures is maintained.

Environmental Compliance

The company aims to achieve Net Zero by 2050, utilizing green architecture and energy-efficient operational improvements.

Taxation Policy Impact

Tax expense for Q2FY26 was INR 49.9 Cr on a pre-tax profit of approximately INR 166.5 Cr, implying an effective tax rate of ~30%.

⚠️ Risk Analysis

Key Uncertainties

Cyclical and seasonal nature of the hotel industry (peak Oct-Mar) can cause significant quarterly volatility in earnings. Exogenous factors like disease outbreaks or terrorist attacks pose high-impact risks to occupancy.