EIH Ltd:Annual Report 2023-24 Analysis

EIH Ltd. - A Comprehensive Overview #

About the Company #

• Year of Establishment and Founding History: EIH Ltd., formerly known as The East India Hotels Ltd., was founded in 1934 by the late Rai Bahadur Mohan Singh Oberoi. He started with a small tea shop in Shimla and gradually expanded into acquiring and managing hotels.

• Headquarters Location and Global Presence: The company is headquartered in Kolkata, India. While primarily focused on India, EIH Ltd. has a limited international presence with properties in select locations.

• Company Vision and Mission: (Publicly available information on EIH’s explicit vision and mission statement is limited. However, their operations and publicly stated goals suggest a focus on providing luxury hospitality experiences and maintaining a strong brand reputation within the Indian market.)

• Key Milestones in Their Growth Journey:

  • 1934: Foundation by Rai Bahadur Mohan Singh Oberoi.
  • Expansion through strategic acquisitions and new hotel development.
  • Establishment of the “Oberoi” and “Trident” hotel brands.
  • Significant growth and expansion throughout India.
  • Strategic collaborations and partnerships.

• Stock Exchange Listing Details and Market Capitalization: EIH Ltd. is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). (Market capitalization figures can be found on financial websites such as Google Finance, Yahoo Finance, or the respective stock exchange websites.)

• Recent Financial Performance Highlights: (Detailed financial performance can be found in EIH Ltd.’s annual reports and investor presentations available on their website or through financial news sources.) Highlights would include revenue, profit, debt levels, and key financial ratios.

• Management Team and Leadership Structure: (Information on the current CEO, CFO, and Board of Directors is readily available on the EIH Ltd. website.)

• Notable Awards or Recognitions: The Oberoi hotels have consistently received numerous prestigious international awards and recognitions for their exceptional service and facilities.

Their Products #

• Complete Product Portfolio with Categories: EIH Ltd.’s primary product is luxury hospitality services, offered through its two main brands:

  • Oberoi Hotels & Resorts: This brand represents the company’s luxury flagship, focusing on providing unparalleled service, exquisite accommodations, and world-class dining experiences.
  • Trident Hotels: This brand caters to business and leisure travelers looking for high-quality accommodations and efficient service at a more accessible price point.

• Flagship or Signature Product Lines: The Oberoi brand is the flagship, renowned for properties such as The Oberoi Udaivilas, Udaipur; The Oberoi Amarvilas, Agra; and The Oberoi, Mumbai.

• Quality Certifications and Standards: The Oberoi hotels are known for their high standards of quality and service, although specific certifications may vary by property.

Primary Customers #

• Target Industries and Sectors: The primary customer base consists of:

  • Luxury leisure travelers
  • Corporate travelers
  • High-net-worth individuals
  • Wedding and event organizers

• Geographic Markets (Domestic vs. International): The majority of EIH Ltd.’s revenue is derived from the Indian market. While they do have international properties, the domestic market is their primary focus.

• Major Client Segments:

  • Luxury travel
  • Business travel
  • Destination weddings
  • Corporate events

• Distribution Network and Sales Channels:

  • Direct bookings through the company’s website and reservation system.
  • Travel agencies and online travel platforms.
  • Corporate travel departments.

Major Competitors #

• Direct Competitors in India and Globally:

  • Indian Hotels Company Limited (Taj Hotels)
  • ITC Hotels
  • Marriott International
  • Hyatt Hotels Corporation
  • The Leela Palaces, Hotels and Resorts

• Competitive Advantages and Disadvantages:

  • Advantages: Strong brand reputation for luxury and service, prime locations of their properties, experienced management team.
  • Disadvantages: Limited international presence compared to global chains, potential impact from economic fluctuations in the Indian market.

• How They Differentiate From Competitors: Through a focus on personalized service, unique experiences, and maintaining the highest standards of luxury and hospitality.

• Market Positioning Strategy: EIH Ltd. positions itself as a leading provider of luxury hospitality in India, known for its commitment to excellence and guest satisfaction.

Future Outlook #

• Expansion Plans or Growth Strategy: (Information on specific expansion plans is typically available in investor presentations and press releases.) This will often involve strategic property acquisitions and potentially expanding the footprint of the Trident brand.

• Sustainability Initiatives or ESG Commitments: (Details on EIH’s sustainability practices can be found in their annual reports and on their website.) This may include initiatives related to energy conservation, water management, waste reduction, and community engagement.

• Industry Trends Affecting Their Business:

  • Increasing demand for luxury travel in India.
  • Growth of online travel platforms.
  • Rising competition from international hotel chains.
  • Emphasis on sustainable and responsible tourism.

• Long-Term Vision and Strategic Goals: (Explicit long-term vision statements may not be publicly available. However, EIH’s actions suggest a long-term goal of strengthening its position as a leading luxury hospitality provider in India and potentially expanding its international reach selectively.)

## EIH Limited FY 2023-24 Financial Performance Overview

### Financial Performance (Standalone)

EIH Limited demonstrated significant financial recovery and growth over the past three fiscal years.

| Metric (Standalone)        | FY 2023-24 (₹ million) | FY 2022-23 (₹ million) | FY 2021-22 (₹ million) | Trend Analysis & Key Observations                                                                                                                               |
| :------------------------- | :--------------------- | :--------------------- | :--------------------- | :-------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Gross Revenue              | 23,893               | 15,126               | 7,202                | Strong growth trajectory, indicating substantial recovery and business expansion.                                                                                     |
| Total Revenue              | 24,040               | 15,228               | 7,267                | Consistent with Gross Revenue, reflecting a similar growth pattern.                                                                                                  |
| PBT                      | 6,398                | 2,479                | (174)                | Significant improvement in profitability, turning from a loss to substantial profit.                                                                                 |
| PAT                      | 4,711                | 1,808                | (271)                | Mirrors the trend in PBT, showcasing a robust turnaround in net earnings.                                                                                           |
| EPS (₹)                    | 8.26                 | 3.17                 | (0.47)               | Consistent with the increase in PAT, indicating improved earnings per share.                                                                                        |

### Key Financial Ratios & Metrics

| Ratio/Metric                 | FY 2023-24 | FY 2022-23 | FY 2021-22 | Trend Analysis & Key Observations                                                                                                                                                                                                        |
| :----------------------------- | :--------- | :--------- | :--------- | :--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Occupancy Rate (%)           | 72         | 53         | 31         | Substantial improvement in occupancy rates, reflecting increased demand and utilization of properties.                                                                                                                                  |
| Average Room Rate (ARR) (₹) | 11,904     | 10,024     | 8,081      | Increase in ARR indicates improved pricing power and potentially a shift towards higher-value offerings.                                                                                                                                     |
| RevPAR (₹)                   | 8,571      | 5,313      | 2,532      | Significant growth in RevPAR, driven by both increased occupancy rates and higher ARR, demonstrating overall improvement in revenue generation per available room.                                                                      |

Detailed Analysis #

Operating Performance #

Income Statement Analysis FY 2023-24 #

Revenue Breakdown by Segment (Standalone) #

Note: Geographical revenue breakdown is not explicitly provided. Consolidated company revenue grew by 26% to ₹23,168 million. Operations are in India and internationally (6 countries), but financial segmentation by geography is not detailed.

EIH Limited (FY 2023-24) Financial Analysis #

Revenue and Profitability Performance #

EIH Limited demonstrated robust financial performance in FY 2023-24.

• Total Income (Consolidated): Reached ₹26,895.56 million, a significant increase from ₹20,887.28 million in FY 2022-23. (Page 68, 293)
• EBITDA (Consolidated): Stood at ₹10,089.02 million, up from ₹6,991.57 million in the previous year, reflecting improved operational efficiency. (Page 68) The Standalone EBITDA also showed strong growth to ₹9,108.95 million from ₹6,255.53 million. (Page 28, 68, 84)
• Profit Before Tax (PBT) (Consolidated): Rose to ₹9,009.75 million from ₹4,966.11 million. (Page 68, 293) Standalone PBT increased by 59% to ₹6,920.16 million. (Page 28)
• Profit After Tax (PAT) (Consolidated): Increased to ₹6,970.66 million from ₹3,701.88 million. (Page 68, 293) Standalone PAT grew to ₹5,208.97 million from ₹3,201.69 million. (Page 28, 29)
• Return on Equity (Standalone): Improved to 15.6%, a 1200 basis points increase over pre-covid levels. (Page 10, 85)
• Market Capitalisation: More than doubled over the past two years, reaching over ₹250,000 million from approximately ₹120,000 million. (Page 24, 28)

Market Position and Competitive Strengths #

EIH Limited maintains a premier position in the luxury hospitality sector.

• Brand Portfolio: Operates under the “Oberoi” (luxury) and “Trident” (premium/upper-upscale) brands, recognized for high service standards and iconic properties. (Page 14, 16-17)
• RevPAR Index (Standalone): Achieved 127% during the year, indicating superior performance against its competitive set. (Page 24, 28)
• Awards and Recognition: Oberoi Hotels & Resorts entered “Travel + Leisure’s Hall of Fame” in 2023 and received numerous other accolades, underscoring brand strength and service excellence. (Page 22-23, 87-88)
• Customer Loyalty: Achieved a Net Promoter Score (NPS) of 80, indicating high guest satisfaction and loyalty. (Page 28, 36)
• Strategic Alliances: Partnership with Mandarin Oriental Hotel Group to enhance marketing, sales, loyalty programs, and operational expertise. (Page 86)

Key Service Performance #

The company’s core hospitality services, flight catering, and airport services demonstrated strong growth.

• Revenue from Operations (Standalone) Breakdown (FY24): (Page 208)
  • Rooms: ₹10,216.13 million (approx. 46.57%)
  • Food and Beverage: ₹7,966.61 million (approx. 36.31%)
  • Other Services: ₹3,533.78 million (approx. 16.10%)
  • (Consolidated Revenue from Operations: Rooms ₹12,022.15mn, F&B ₹9,185.39mn, Other Services ₹3,982.32mn - Page 307)
• Occupancy and Average Room Rates (ARRs): Strong growth in both occupancy levels and ARRs across hotels, driven by premium positioning and renewed travel demand. (Page 28) Pan-India premium hotel occupancy expected to reach decadal highs of 70-72% in FY24. (Page 27, 83)
• Flight Catering and Airport Services: These businesses also experienced strong growth. (Page 28)

Geographic Distribution and Expansion #

EIH Limited has a significant presence in India and select international markets, with a clear strategy for expansion.

• Current Presence: Owns and operates 30 hotels, resorts, and luxury cruisers under “Oberoi” and “Trident” brands across 6 countries and 22 cities. (Page 14)
  • India: 21 hotels listed (12 Oberoi, 9 Trident). (Page 20-21)
  • International: 7 Oberoi properties (Marrakech, Zahra Nile Cruiser, Sahl Hasheesh, Al Zorah, Mauritius, Bali, Lombok). (Page 20-21)
• New Signings and Openings: (Page 18-19, 28, 86-87)
  • The Oberoi Vindhyavilas Wildlife Resort, Bandhavgarh (Opening Dec 2024).
  • The Oberoi Rajgarh Palace, Khajuraho (Restoration, opening timeline not specified in immediate context but development underway).
  • Luxury Dahabeyas, River Nile (Melouk & Malekat, opening Dec 2024).
  • Projects under development/planning: The Oberoi in South Goa, another Oberoi in North Goa, projects in Bengaluru, Gandikota, Tirupati (Andhra Pradesh), and hotels in Bardia and Kathmandu (Nepal).
  • International development: Resorts on Koh Tao Island (Thailand) by subsidiary.

Capital Allocation and Investments #

The company is strategically investing in new properties and technology.

• New Hotel Developments: Significant capital is being allocated to the construction and development of new luxury properties mentioned above (Bandhavgarh, Khajuraho, Goa, Nile Dahabeyas, Nepal, Thailand). (Page 18-19, 86-87)
  • The Oberoi Rajgarh Palace (66 keys, 70-acre estate).
  • The Oberoi, South Goa (90 keys, 52 acres, expected Q4 2027).
  • The Oberoi Vindhyavilas, Bandhavgarh (21 keys, operational end of current year).
  • Trident resort in Tirupati (100 keys, operational Q1 2027).
  • The Oberoi, Gandikota (20 keys, operational Aug 2027).
• Standalone Capital Work-in-Progress (CWIP): ₹1,031.67 million as of March 31, 2024, up from ₹749.86 million. (Page 192)
• Consolidated Capital Work-in-Progress (CWIP): ₹1,131.19 million as of March 31, 2024, up from ₹813.38 million. (Page 292)
• Gross Fixed Assets (Standalone): Increased to ₹32,071.68 million from ₹30,592.34 million. (Page 30)
• Technology Investments: Focus on enhancing IT ecosystem, including Digital Asset Management (DAM), refreshed Trident Hotels website, integrated payment gateway, and data-driven CRM with predictive modeling and AI (SOLUS AI). Exploring Generative AI. (Page 28, 40)
• Return on Capital Employed (Standalone): Increased to 18.47% in FY24 from 13.51% in FY23. (Page 30, 85)
• Capex on Environment & Social Impacts: 3.74% of capital expenditure directed towards improving E&S.

Risk Analysis Report (FY 2023-24) #

1. Strategic Risks #

a. Business Slowdown & Economic Uncertainty #

• Severity: High
• Likelihood: Medium
• Trend: Stable with downside risks.
• Mitigation Strategies: Premium market positioning, strong brand portfolio (Oberoi, Trident), focus on high-growth segments (weddings, niche tourism), expansion in high-potential locations. Diversified offerings (flight catering, airport services).
• Control Effectiveness: Strong brand loyalty (NPS 80%), agile response to market changes (post-COVID recovery), strategic alliances (Mandarin Oriental). RMC monitors business slowdown risks.
• Potential Financial Impact: Reduced occupancy, lower Average Room Rates (ARRs), decreased RevPAR, impact on profitability.

b. Competitive Pressures & Market Saturation #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing, particularly in luxury segment.
• Mitigation Strategies: Differentiated product offerings, focus on “exceptional guest experiences,” investment in brand and service quality (OCLD, TOCE), expansion into new micro-markets and wildlife resorts.
• Control Effectiveness: Industry-leading performance metrics, high guest satisfaction, continuous innovation (e.g., Oberoi Concours d’Elegance, Amadeo).
• Potential Financial Impact: Pressure on ARRs and market share, increased marketing spend.

c. Changing Customer Preferences & Technological Disruption #

• Severity: Medium
• Likelihood: High
• Trend: Accelerating
• Mitigation Strategies: Investment in technology (Digital Asset Management, refreshed websites, integrated payment gateway, CRM with predictive modelling/SOLUS AI), focus on personalized hospitality, adapting to trends like “workcation” and food tourism. Exploring Generative AI.
• Control Effectiveness: High NPS score (80%), positive media coverage, proactive adoption of digital tools.
• Potential Financial Impact: Loss of relevance if slow to adapt, increased capex for technology. Conversely, opportunity for enhanced guest experience and operational efficiency.

d. Growth & Expansion Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Phased development, experienced project management teams, strong brand equity to support new openings, management contracts to reduce capital outlay in some cases.
• Control Effectiveness: Track record of successful hotel development. RMC monitors growth obstacles.
• Potential Financial Impact: Project delays, cost overruns, slower-than-expected ramp-up of new properties. Successful expansion can lead to significant revenue and profit growth.

2. Operational Risks #

a. Service Quality & Reputation Management #

• Severity: High
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: “The Oberoi Dharma” philosophy, OCLD for training, TOCE for operational excellence, rigorous quality standards, guest feedback mechanisms (GQA), crisis management protocols.
• Control Effectiveness: Consistently high guest satisfaction (NPS 80%), numerous international awards for service and quality, employee engagement in top quartile. RMC monitors reputational damage.
• Potential Financial Impact: Negative reviews, loss of customer loyalty, damage to brand value impacting future bookings and pricing power.

b. Talent Attraction, Development & Retention #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: OCLD for developing talent pipeline, competitive compensation (benchmarking undertaken), strong employer brand, focus on employee well-being and engagement (84% engagement score), internal promotion (64% positions filled internally).
• Control Effectiveness: Low voluntary attrition (stated as “among the best in the industry”), structured training and development programs. RMC monitors talent retention.
• Potential Financial Impact: Increased recruitment and training costs, impact on service quality due to staff shortages or inexperienced staff.

c. Operational Interruptions (including supply chain) #

• Severity: Medium to High
• Likelihood: Low to Medium
• Trend: Stable
• Mitigation Strategies: Business continuity planning, robust maintenance schedules, diversified supplier base where possible, inventory management. Supplier Code of Conduct and ESG assessments of suppliers aim to build a resilient chain.
• Control Effectiveness: Proactive risk management framework, internal audit processes. RMC monitors operational interruptions.
• Potential Financial Impact: Revenue loss, increased costs, guest dissatisfaction.

d. Health, Safety & Security (Guests & Employees) #

• Severity: High
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Comprehensive H&S policies, regular safety audits (multi-level mechanism), emergency response training, compliance with WHO guidelines, food safety management systems (FSSAI compliance).
• Control Effectiveness: Established safety reporting mechanisms, dedicated H&S officers/committees in international hotels, zero violations of legal obligations reported for environmental/safety. RMC monitors safety issues.
• Potential Financial Impact: Liabilities, reputational damage, operational shutdowns.

3. Financial Risks #

a. Financial Deterioration & Profitability Pressure #

• Severity: High
• Likelihood: Low
• Trend: Mitigated by current strong performance but dependent on sustained economic and travel demand.
• Mitigation Strategies: Premium pricing strategy, cost optimization through TOCE and automation, diversified revenue streams, prudent capital management.
• Control Effectiveness: Strong financial results

EIH Limited - Financial Analysis Report (FY 2023-24) #

Long-term Strategic Goals and Progress #

EIH Limited’s long-term strategy centers on leadership in luxury hospitality, driven by expanding its portfolio of “Oberoi” and “Trident” branded properties in key domestic and international markets. A core goal is the consistent delivery of “exceptional guest experiences.” The company aims for sustainable growth, with stated ambitions including achieving Net Zero by 2050 and Zero Waste to Landfill by 2030.

Progress towards these goals in FY24 is evident through:

• Financial Outperformance: Significant year-on-year growth in revenue (Standalone: +26.2% to ₹23,168 million), EBITDA (Standalone: +45.6% to ₹9,109 million), and Profit After Tax (Standalone: +62.7% to ₹5,209 million). Market capitalization exceeded ₹250,000 million, more than doubling in two years.
• Portfolio Expansion: Active development pipeline with new signings and openings. Near-term operational launches include The Oberoi Vindhyavilas, Bandhavgarh (Dec 2024), Luxury Dahabeyas on the Nile (Dec 2024), and The Oberoi Rajgarh Palace, Khajuraho (end FY25). Longer-term projects (up to FY 2029-30) include properties in South Goa, North Goa, Bengaluru, Gandikota, Tirupati, Nepal (Kathmandu, Bardia), and Thailand (Koh Tao).
• Guest Experience Enhancement: Maintained a high Net Promoter Score (NPS) of 80%. Launched initiatives like the Oberoi Concours d’Elegance and Amadeo by Oberoi restaurant.
• Strategic Alliances: Continued leveraging the partnership with Mandarin Oriental Hotel Group for marketing, sales, loyalty programs, and operational best practices.
• Technological Advancement: Focus on enhancing the IT ecosystem, including the exploration and deployment of Generative AI to aid guests and employees.
• Sustainability Initiatives: Progress in energy recovery systems, renewable energy adoption (9.78% of total energy mix), green building practices, and waste/water management systems.

Competitive Advantages and Market Positioning #

EIH Limited commands a strong competitive advantage through:

• Brand Equity: The “Oberoi” brand is synonymous with ultra-luxury and personalized service, while “Trident” offers high-quality premium experiences. This dual-brand strategy caters to distinct market segments.
• Service Excellence: A deeply ingrained culture of personalized hospitality, rooted in “The Oberoi Dharma,” consistently earns high guest satisfaction (NPS 80%) and numerous international accolades (e.g., Travel + Leisure Hall of Fame). The Oberoi Centre of Learning and Development (OCLD) ensures a pipeline of highly trained hospitality professionals.
• Premium Market Leadership: The company’s properties consistently achieve industry-leading Revenue Per Available Room (RevPAR), with a RevPAR Index of 127% against its competitive set in FY24, and strong Average Room Rates (ARRs).
• Strategic Asset Portfolio: Ownership and management of iconic hotels in prime city-center locations, unique leisure destinations, and wildlife resorts. This provides a diversified revenue base and appeal.
• Operational Efficiency: Strong EBITDA margins (Standalone:

Financial Analysis: EIH Limited - FY 2023-24 #

Economic and Industry Overview #

Global Economy #

The global economy demonstrated resilience in 2023, with sustained growth and receding inflation. The IMF projects global GDP growth of 3.2% for 2024, supported by investments, technological advancements, and fiscal policies. Risks include geopolitical tensions, persistent core inflation, and high interest rates. Advanced economies are expected to see growth rise from 1.6% (2023) to 1.7% (2024), while emerging markets may see a slight slowdown from 4.3% (2023) to 4.2% (2024).

Indian Economy #

India’s GDP grew at 7.6% in FY 2023-24, up from 7.0% in FY 2022-23, becoming the fifth-largest economy by nominal GDP. Consumption grew modestly at 3.0%, while Gross Fixed Capital Formation saw robust growth of 10.2%, driven by government capex. The RBI forecasts continued momentum in manufacturing and services, with private consumption expected to strengthen. Infrastructure investment, including the National Infrastructure Pipeline (NIP) valued at ₹11.11 Lakh Crores, remains a key driver.

Hospitality Sector (Global & India) #

The global tourism industry saw international arrivals reach 1,286 million in 2023 (88% of pre-pandemic levels). Global hospitality revenue is projected to reach US$5.5 trillion in 2024. The Indian hospitality sector experienced a significant increase in international arrivals. Premium hotel occupancy in India is expected to reach decadal highs of 70-72% in FY 2023-24 and FY 2024-25, with ARRs rising to ₹7,200-₹7,400 (FY24) and ₹7,800-₹8,000 (FY25). Key trends include premiumization, a surge in international and domestic tourism, technological adoption (contactless services, AI), and a growing focus on sustainability and experiential travel.

Financial Performance (Standalone - FY 2023-24 vs. FY 2022-23) #

Revenue #

Gross Revenue increased by 26.19% to ₹23,167.81 million from ₹18,358.30 million. This growth is attributed to strong demand in both leisure and business travel, leading to higher occupancy and average room rates.

Profitability #

• EBITDA surged by 45.61% to ₹9,108.95 million from ₹6,255.53 million. EBITDA margin improved to 39.32% from 34.07%.
• Profit Before Tax (PBT) rose by 58.51% to ₹6,920.16 million from ₹4,365.81 million.
• Profit After Tax (PAT) increased by 62.69% to ₹5,208.97 million from ₹3,201.69 million.
• Net Profit Margin improved to 22.48% from 17.44%.

Key Ratios (Standalone) #

• Return on Equity (RoE) improved to 15.58% from 10.80%.
• Debt-Equity Ratio significantly improved to 0.00:1 from 0.02:1, indicating near debt-free status for standalone operations (excluding lease liabilities). Bank borrowings reduced to nil from ₹397.00 million.
• Return on Capital Employed (RoCE) increased to 18.47% from 13.51%.
• Current Ratio improved to 2.10 times from 1.42 times, indicating enhanced short-term liquidity.

Market Capitalization #

Increased to over ₹250,000 million from approximately ₹120,000 million two years ago, reflecting strong investor confidence.

Dividend #

A dividend of ₹1.20 per equity share (60%) has been recommended for FY 2023-24.

Operational Performance and Strategic Initiatives #

Brand Performance #

Achieved a RevPAR Index of 127% against its competitive set. Guest Net Promoter Score (NPS) stood at 80.

Expansion and Development #

• New Openings/Signings:
  • The Oberoi Vindhyavilas Wildlife Resort, Bandhavgarh (Luxury tented resort, opening December 2024).
  • The Oberoi Rajgarh Palace, Khajuraho (Historic palace restoration, 66 keys, operational by end of FY 2025-26).
  • Luxury Dahabeyas, River Nile (Two cruisers, ‘Melouk’ & ‘Malekat’, 7 cabins each, opening December 2024).
• Projects Under Planning/Development:
  • The Oberoi in South Goa (90 keys, 52 acres, expected Q4 2027) and another Oberoi Resort at Bogmalo Beach, North Goa.
  • Mixed-use development in Bengaluru.
  • The Oberoi Wildlife Resort, Bardia National Park, Nepal (20 luxury tents).
  • The Oberoi Kathmandu, Nepal (80 keys).
  • Resorts on Koh Tao Island, Thailand (The Oberoi and Trident).
  • Trident resort in Tirupati, Andhra Pradesh (100 keys, operational Q1 2027).
  • The Oberoi resort at Gandikota, Andhra Pradesh (20 keys, operational August 2027).

Guest Experience #

Launched inaugural Oberoi Concours d’Elegance. Opened Amadeo by Oberoi, a standalone restaurant in Mumbai. Focus on personalized hospitality and unique culinary experiences.

Human Capital #

The Oberoi Centre of Learning and Development (OCLD) and The Oberoi Centre of Excellence (TOCE) continue to be pivotal. 6,157 training programs were completed. Employee engagement remains in the top quartile of the global hospitality index.

Technological Integration #

Implemented a Digital Asset Management (DAM) tool. Refreshed Trident Hotels’ website. Launched integrated payment gateway. Utilizing data-driven CRM with predictive modelling and SOLUS AI. Future focus on deploying Generative AI.

Sustainability (ESG) #

• Environmental:
  • Energy: Renewable energy constituted 9.78% of the total energy mix in FY24. Scope 1 & 2 emissions intensity was 53 MTCO2e/₹ Crore. Scope 3 emissions intensity was 151.99 MTCO2e/₹ Crore (Note: Emission figures saw an increase due to inclusion of international hotels, airport turbine fuel, and kitchen fuel). Aiming for Net Zero by 2050.
  • Water: 16 hotels in India, 2 airport/flight service units, and The Oberoi Corporate Tower are Zero Liquid Discharge (ZLD). Four international hotels are also ZLD. Water intensity was 1,159 KL/₹ Crore. Conducted water risk assessment for all properties.
  • Waste: Implementing the ‘3R’ (Reduce, Reuse, Recycle) model. Aiming for Zero Waste to Landfill by 2030. Eliminated single-use plastic. Commissioning in-house water bottling plants.
  • Biodiversity: Conducted biodiversity risk assessment for all properties.
• Social: ₹14.6 million voluntarily donated. CSR initiatives focus on education (SOS Children’s Village, Project Saksham), health, and environment. 8,085 employees trained in Human Rights.
• Governance: Adherence to ‘The Oberoi Dharma’. Robust Whistleblower Policy. ISO 27001 certification for Information Security Management. Supplier Code of Conduct and screening processes implemented.

Risk Management and Mitigation #

Framework #

A dedicated Risk Management Committee (RMC) oversees 13 identified key risks including business slowdown, financial deterioration, operational interruptions, environmental impact, and cyber threats.

Climate Risk Assessment (aligned with TCFD & IFRS S2) #

• Physical Risks:
  • Acute: Heavy precipitation & flooding (45% of hotel locations at risk).
  • Chronic: Water scarcity (40% of hotels in water-stressed areas); Extreme heat (over 60% of locations likely to see temperatures >40°C for >130 days/year); Sea level rise (long-term threat to coastal hotels).
• Transition Risks:
  • Regulatory: Potential fuel/energy taxes, stricter building codes. EIH is working on compliance and readiness.
  • Technology: High cost of transitioning to greener tech, risk of asset obsolescence. EIH is focusing on energy efficiency and renewables.
  • Market: Growing demand for green credentials and ecotourism. EIH’s low carbon footprint could be an opportunity.
  • Reputation: Risk from not meeting stakeholder expectations on energy efficiency and environmental stewardship.

Wildflower Hall, Shimla #

Supreme Court dismissed SLPs regarding the property, granting time until March 31, 2025, to vacate and handover possession to the State of Himachal Pradesh. The company has classified its investment in Mashobra Resort Limited (MRL), which owns the hotel, as “Assets classified as held for sale” (₹260.04 million). A provision for contingencies of ₹822.26 million (including interest) for ‘user fees’ has been made and charged as an ‘Exceptional Item’. The company has also asserted claims for the fair market value of its shares in MRL and net income earned by MRL, pending adjudication.

Management Outlook and Assumptions #

Positive Outlook #

Management expresses a positive outlook for the Indian hospitality sector, driven by strong economic fundamentals, increased infrastructure development, rising discretionary spending, and growth in niche tourism segments (wildlife, spiritual, weddings).

Market Positioning #

EIH is well-positioned to capitalize on India’s burgeoning luxury market due to its premium brand image, distinctive hotels, and reputation for superior quality and service.

Growth Drivers #

• Resurgent inbound tourism and strong domestic demand.
• Premiumization trend with travelers seeking high-end experiences.
• Expansion of hotel portfolio in strategic locations in India and internationally.

Strategic Focus #

• Maintaining leadership in RevPAR and guest satisfaction.
• Enhancing IT ecosystem, including exploring Generative AI.
• Continued commitment to sustainability and ESG targets.
• Nurturing talent through OCLD and employee development programs.

Key Assumptions for Future Performance #

• Continued robust demand for luxury hospitality, with premium hotel occupancy rates remaining high (70-72%).
• Sustained growth in Average Room Rates (ARRs).
• Successful execution and operationalization of new hotel projects as per timelines.
• Stable geopolitical environment and continued economic growth in India.
• Effective management of climate-related and other business risks.
• Realization of benefits from technological advancements and digital initiatives.

Capital Utilization Analysis #

Financial Capital #

Achieved 15.6% Return on Equity (standalone). Utilized equity, internal accruals, and managed debt effectively, leading to a significant reduction in standalone bank borrowings.

Human Capital #

6,157 training programs completed. Emphasis on a culture of excellence and employee growth through OCLD.

Social & Relationship Capital #

₹14.6 million voluntarily donated.

EIH Limited - Financial Analysis Report for FY 2023-24 #

Auditor’s Opinion and Qualifications #

Standalone Financial Statements #

• The Statutory Auditors, Deloitte Haskins & Sells LLP, issued an unmodified opinion.
  • Emphasis of Matter: Uncertainties regarding the future outcomes of legal proceedings involving Mashobra Resort Limited (MRL) and the Government of Himachal Pradesh concerning the Wildflower Hall property, following a Supreme Court order.
  • Key Audit Matters (KAMs):
    1. Assessment of impairment of the non-current investment in wholly-owned subsidiary EIH International Ltd (EIL). Auditors found the recoverable amount exceeded the carrying amount, resulting in no impairment.
    2. The impact of court orders directing the handover of possession and management of the property held by MRL to the Government of Himachal Pradesh.

Consolidated Financial Statements #

• The Statutory Auditors issued an unmodified opinion.
  • Emphasis of Matter: Uncertainties surrounding the Mashobra Resort Limited (MRL) matter.
  • Key Audit Matters (KAMs):
    1. Impairment testing of goodwill on consolidation related to EIH International Ltd (EIL). Auditors, relying in part on component auditor procedures, found the recoverable value higher than the carrying value.
    2. The impact of court orders concerning Mashobra Resort Limited (MRL).
  • Other Matters: The auditors relied on the reports of other auditors for 6 subsidiaries, 2 associates, and 1 joint venture. Financial statements of 1 subsidiary were unaudited but deemed not material.

Key Accounting Policies and Changes #

• The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) on a going concern and accrual basis, under the historical cost convention, except for certain financial assets/liabilities and defined benefit plans measured at fair value.
• No significant changes to accounting policies were reported due to new standards in FY 2023-24, as MCA did not notify any new applicable standards or amendments.