EIH achieves historic Q2FY25

EIH Limited posted historic Q2FY2025 financial results which were the best ever so far in its history. The company posted double-digit RevPAR (revenue per available room) growth which was led by improving occupancies as well as average room rates. The management outlook continues to remain buoyant and very optimistic on the tourism and hospitality sector with demand expected to remain ahead of supply over the next few years. Since the hotel sector in India and around the world is booming after COVID-19, hence hotel companies are doing quite well. While domestic air passenger traffic has grown by over 6% y-o-y, the hotel occupancy percentage has also grown by around 4% in the hospitality segment.
An increase in ARR over the last few years has translated into a significant increase in RevPAR which highlights the demand for increased supply in the hospitality sector . The RevPAR of EIH Hotels for Q2FY2025 has shown excellent growth with 10% for Oberoi Metro , Leisure at around 7% while Trident Metro posted 22% . In both the owned hotels and managed properties segment, growth has been averaging around 14-15% y-o-y while every quarter, occupancy has grown from 69% to 72% and ARR has grown from 13730 to 14970. From a segment wise point of view , there is all round growth with MICE ( meetings, incentives, conferences and exhibitions) , corporate and leisure all doing exceedingly well . No wonder , the Q2FY25 performance has the highest Revenue , EBITDA and Profit after Tax in the last 15 years.
EIH Limited has outlined a healthy room addition portfolio plus retaining its long-term guidance of more than doubling its room inventory over the next five years . A debt-free balance sheet and strong cash flow generation along with a strong cash position of Rs 771 crores in its books as of September 2024 would enable the company to expand rapidly without straining its balance sheet. EIH Limited has planned a mixed-use (hotel as well as commercial space which would be leased) development in larger cities as a good bet to further its growth and expansion . EIH posted Q2FY25 revenue at Rs 557 crores in whereby posting a 24% growth over last year and EBITDA at Rs 189 crores which grew 27% over the last fiscal year. Profit after Tax stood at Rs 114 crores which is 34% higher over the same quarter of last year . The company has positioned itself as a premier hospitality company brand and recipient of numerous awards in 2024 with Rajvilas being ranked as the best hotel in the world . EIH is undertaking a major expansion plan by adding 20 new properties ( owned , joint ventures and associates ) to its portfolio .
All these are expected to be completed and launched over the next five years with 13 Oberoi hotels, 4 Trident hotels, and 3 Luxury Boats and Cruises.
Out of this, 11 are going to be in India while balance 9 are international. Mutual Fund managers and industry analysts are quite bullish on the EIH Hotels stock and advising their clients for adding it to their investment portfolio . With a strong demand momentum, industry in an up-cycle mode , luxury positioning of the hotel brand , high service quality and properties at attractive tourist locations makes EIH Limited as a preferred choice for travellers . Brokers are advising their portfolio clients to accumulate the EIH scrip currently quoting at Rs 410 for a decent 25% price appreciation in the medium term horizon . Investors should check from their brokers and financial consultants before buying any securities and do their own due diligence before committing any investment.