In today’s market update, shares of Indian Hotels Company Ltd took a significant dip, dropping over 4% during morning trading on Tuesday after the release of their Q4 FY25 financial results. The stock, part of the prominent Rakesh Jhunjhunwala investment portfolio, opened at ₹812.80, surpassing its previous closing value of ₹801.80 on the Bombay Stock Exchange (BSE). However, the Tata Group’s stock quickly lost momentum, plummeting to a low of ₹765.50, marking a decline of 4.5%.
Strong Q4 Performance but Mixed Market Reaction
On May 5, Indian Hotels disclosed a robust net profit of ₹481.20 crore for the March quarter, reflecting a 30.4% year-over-year increase from ₹369.08 crore reported in the same quarter last year. Sequentially, profits rose modestly by 2.7%, up from ₹468.77 crore in Q3 FY25.
- Revenue Numbers:
- Q4 FY25 Revenue: ₹1,476.33 crore
- YoY Growth: 10%
- Previous Year Revenue: ₹1,341.65 crore
- Q3 FY25 Revenue: ₹1,473.61 crore (flat on a sequential basis)
The consolidated net profit for Indian Hotels also saw a notable increase, climbing 27% year-over-year to ₹522.30 crore, up from ₹417.76 crore in Q4 FY24. Additionally, operating revenue surged 27% to ₹2,425.14 crore from ₹1,905.34 crore in the same quarter last year.
Analyst Insights on Future Growth
Following the Q4 results, Motilal Oswal Financial Services expressed optimism about Indian Hotels’ outlook, highlighting strong growth in both traditional and emerging business segments. They noted:
- Positive Indicators:
- Over 70 wedding dates scheduled throughout the year
- A robust pipeline of 15,900 new hotel rooms in management
- Major renovations planned for iconic properties like Taj Palace in Delhi and Fort Aguada in Goa
Motilal Oswal has set a price target of ₹940 for Indian Hotels shares, anticipating continued growth driven by increased domestic travel and social events.
Strong Q4 Results Validated by Jefferies
Jefferies India also echoed a favorable view of Indian Hotels’ performance, reporting solid growth across revenue, EBITDA, and net profit, with increases of 27%, 30%, and 26% year-over-year, respectively. The hotel segment performed particularly well, with revenue and EBITDA climbing 13% and 20%.
Management is optimistic about the FY26 outlook, forecasting double-digit revenue growth, citing a 17% increase in April driven by strong same-store performance and the addition of 30 new hotel openings. While Jefferies has adjusted their price target slightly from ₹1000 to ₹980, they maintain a ‘buy’ rating, projecting an EBITDA and net profit CAGR of 16-18% from FY25 to FY28.
In conclusion, while the market reacted negatively to the immediate results, the broader outlook for Indian Hotels remains optimistic, supported by strong fundamentals and strategic growth initiatives.
