Indian Hotels shares reduce 3% despite strong Q3 earnings; Jefferies retains ‘buy’ rating

Shares of Indian Hotels Company (IHCL) fell 3 percent to Rs 789 in morning trade on January 20, despite reporting a net profit of Rs 582.32 crore for the October-December quarter of FY25, marking a growth of 29 per cent compared to Rs 451.95 crore recorded in the same period last year. Revenue from operations also grew by nearly 29 per cent, reaching Rs 2,533.05 crore in Q3 of FY25.

The results shared in an exchange filing after market close on January 17 highlighted the strong quarterly performance. Earnings per share (EPS) for the period stood at Rs 4.09.

Total income grew strongly, rising 29 per cent to Rs 2,591.73 crore from Rs 2,003.64 crore recorded in Q3 FY24. Meanwhile, EBITDA for the quarter grew 27 percent year-on-year to Rs 2,081 crore. Subsequently, Jefferies maintained a “buy” rating on the stock with a target price of Rs 1,000, indicating an upside potential of 22.5 percent from the previous close on the NSE and citing a strong performance and demand scenario.

The company’s EBITDA was in line with estimates, slightly higher than consensus. Guidance indicates a continued demand buoyancy for Q4 FY25 and FY26, driven by large-scale events, regional weddings and transient travel.

Additionally, Taj SATS revenue grew 18 percent year-on-year and new business revenue grew 40 percent. IHCL Managing Director and CEO Punit Chhatwal said, “Q3 is the eleventh consecutive quarter of record performance, with the hotels segment achieving robust revenue growth of 16 percent and EBITDA margin of 40.9 percent.

This growth was fuelled by a 40 per cent growth in new businesses, double-digit growth in same-store hotels and a 20 percent revenue jump in the US portfolio.

The integration of air and institutional catering drove revenue and PAT by 29 per cent to Rs 2,592 crore and Rs 582 crore, respectively.” Chhatwal also expressed optimism about the future, highlighting demand drivers such as large-scale regional events, weddings and steady transient travel.

He said IHCL is on the right track to reach its target of 700 hotels by 2030. At around 9:45 am, the company’s shares were trading 2.7 percent lower at Rs 790 on the NSE from its previous close. IHCL’s 1-year return is 76 percent, outpacing Nifty’s gain of 9 percent in the same period.