EIH Ltd - May 2025 Earnings Call Transcript Analysis

Earnings Call Transcript Analysis Report #

EIH Limited Q4FY25 & FY25 Earnings Call Analysis #

Financial Performance #

Key Financial Metrics #

• Consolidated FY25:
  • Revenue Growth: 11% YoY.
  • EBITDA Growth: 13% YoY.
  • PAT Growth: 6% YoY (impacted by exceptional items for Oberoi Grand & Tirupati).
• Consolidated Q4FY25:
  • Revenue Growth: 10% YoY.
  • EBITDA Growth: 11% YoY.
  • PAT Growth: 14% YoY (impacted by exceptional items).
• Standalone FY25:
  • Revenue Growth: 9% YoY.
  • EBITDA Growth: 10% YoY.
  • PAT Growth: 44% YoY (driven by a one-time exceptional gain of Rs 115 crores from Mashobra deconsolidation).
• Standalone Q4FY25:
  • Revenue Growth: 9% YoY.
  • EBITDA Growth: 12% YoY.
  • PAT Growth: 109% YoY (driven by Mashobra deconsolidation gain).
• RevPAR Growth (Owned & Managed Hotels):
  • FY25: +13% YoY (Oberoi hotels +14%, Trident hotels +16%).
  • Q4FY25: +22% YoY (Oberoi hotels +24%, Trident hotels +22%).
• Occupancy (Q4FY25): Increased from 81% to 82% YoY.
• Cash Surplus: Approximately Rs 1,000 crores as of March 31, 2025.

Comparison with Previous Periods #

• Company achieved its “highest ever performance in terms of both revenue, and PAT” for FY25.
• Consistent RevPAR growth since FY22.

Revised Guidance or Forecasts #

• No specific numerical guidance provided, but management expects inbound tourism to grow by 15% next year as per Government of India forecasts.
• Management foresees RevPAR growth to “stabilize” after a period of strong increases.

Areas of Growth or Decline #

• Growth: Strong RevPAR growth across brands, driven by both ARR and occupancy. Direct and corporate segments showing buoyancy. International operations (Mauritius, Marrakesh) performed well.
• Decline/Impact:
  • Oberoi Grand, Kolkata: Closed for renovation, impacting FY25 results. Annual impact stated as roughly Rs 70 crore on revenue and Rs 43 crore on EBITDA.
  • Mashobra (Wildflower Hall): Deconsolidated. FY25 revenue was Rs 78 crores.
  • Airport Lounge Business (Mumbai): Concluded on March 31, 2025. Last year’s revenue was Rs 122 crores.
  • Bhubaneswar: Saw a downwards RevPAR trend in Q4FY25 due to high base from sports events last year.
  • Middle East international performance: Impacted by the Israel-Palestine conflict, but now stabilizing.

Strategic Initiatives & Business Updates #

Major Strategic Announcements #

• Rate Optimization: Primary objective is to drive rates higher.
• Growth Focus: Emphasis on expanding through owned, managed hotels, JVs, and partnerships.
• Inorganic Growth: Open to acquisitions.

New Products, Services, or Markets Discussed #

• Hotel Pipeline: 21 new properties (approx. 1,500 keys) to be added in the next 2-3 years (12 domestic, 9 international).
• Spiritual Tourism: Developing a hotel in Tirupati through a JV company (Mumtaz).
• Flight Catering: Strong demand seen, aiming to offset loss of lounge business.

Significant Operational Changes #

• Mashobra (Wildflower Hall): Control given back to the government; deconsolidated. EIH is managing it for 6 months or until bidding concludes and is keen to bid.
• Mumbai Airport Lounge: Business discontinued as of March 31, 2025. No chance of renewal.
• Oberoi Grand, Kolkata: Undergoing an 18-month, two-phased renovation. Partial reopening expected in about 12 months.

Ongoing or Completed Projects #

• Renovations:
  • Trident, Nariman Point (four floors, long-stay apartments at Oberoi Mumbai).
  • Oberoi Grand, Kolkata (ongoing).
• New Developments:
  • Oberoi London: Investment mostly done for the current year. Long-term objective to get a 49% partner.
  • Rajgarh property: “going to come up very soon.”
  • Capex also spent on Oberoi Goa.

Market & Competitive Landscape #

Insights about Industry Trends #

• Significant expansion in the Indian hotel sector.