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Indian Hotels Company Ltd (IHCL), the Tata Group's hospitality arm, reported a robust Q4 FY25 performance. Consolidated net profit rose 25% year-on-year to Rs 522 crore, and revenue increased 27% to Rs 2,425 crore.
Indian Hotels Q4 FY25 snapshot
| Metric | Q4 FY25 | Q4 FY24 | Change (YoY) |
|---|---|---|---|
| Revenue (Rs crore) | 2,425 | 1,905 | 27% |
| Net profit (Rs crore) | 522 | 418 | 25% |
| EBITDA (Rs crore) | 918 | 706 | 30% |
| EBITDA margin | 36.9% | 36.2% | +0.8 ppt |
| Dividend (Rs per share) | 2.25 | 1.75 | 29% |
However, the stock declined by up to 3.5% on May 6, 2025, trading around Rs 774 on the BSE. Investors appeared concerned about a 10% sequential drop in profit and a 4.3% decline in revenue compared to the previous quarter.
What's driving the numbers
IHCL's Q4 performance was bolstered by:
-
Strong domestic demand
: Same-store hotels delivered a 12% growth in revenue per available room (RevPAR).
-
New business growth
: The New Businesses vertical, including Ginger, Qmin, and amã Stays & Trails, reported a 40% increase in consolidated revenue to Rs 601 crore.
- Operational efficiency : EBITDA rose 30% year-on-year to Rs 918 crore, with margins improving by 80 basis points to 36.9%.
Why the stock is under pressure
Despite the positive annual growth, several factors weighed on investor sentiment:
-
Sequential decline
: Profit fell 10% and revenue dropped 4.3% compared to Q3 FY25.
-
Rising expenses
: Total expenses increased by 24% year-on-year, driven by higher food, employee, and finance costs.
- Valuation concerns : At current levels of 60 P/E, the stock's valuation may be considered stretched, leading to cautious investor behaviour.
Value Research Online Ratings
Value Research Stock Rating gives the Indian Hotels Company an overall rating of 4 stars out of 5. The company's specific scores are as follows:
-
Quality Score: 7/10
-
Growth Score: 7/10
-
Valuation Score: 3/10
- Momentum Score: 10/10
Final word
IHCL's fundamentals remain strong, with a diversified portfolio and consistent performance. The company plans to invest over Rs 1,200 crore in FY26 towards asset upgrades and new projects, including 30 new hotel openings.
Indian Hotels has demonstrated resilience and growth in a challenging environment. While the recent quarter shows some sequential softness, the company's strategic initiatives and strong brand portfolio position it well for sustained long-term growth. Investors should monitor cost trends and market conditions, but can remain optimistic about IHCL's future prospects.
Disclaimer: This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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