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Indian Hotels Company (IHCL) registered strong operating performance in Q2FY27

ICICIdirect Research 22 Oct 2026 DISCLAIMER

News: Indian Hotels Company (IHCL) registered strong operating performance in Q2FY27 driven by equally strong performance by domestic hotel business. Its consolidated revenues grew by 22%YoY to Rs2,484.2cr ( ahead of our expectation of Rs2,334.2cr and average street expectation of Rs2,300cr). This was on back of 26%YoY growth in the standalone business driven by 27% YoY growth in standalone room revenues growing (RevPar growth of 28% to Rs13,860 per night) and 20% growth in the F&B business. Standalone occupancy ratio improved by 700bps YoY to 82%; ARRs have likely to be grown by mid-teens. Taj Sats airline business registered flat revenues of Rs283cr during the quarter. Other subsidiaries (including recent acquisitions) registered 25% YoY growth to Rs865cr.  Consolidated EBIDTA margins improved by 47bps YoY to 28.4%; hotel business EBIDTA margins improved by 100bps YoY to ~30%. Consolidated operating EBIDTA grew by 24% YoY to Rs706cr (ahead of our expectation of Rs668cr). Higher depreciation charges (due to captilisation of Frankfurt hotel and other assets) and lower other income led to PAT growth of 20% YoY to Rs383cr (lower than our expectation of Rs398cr).

View: IHCL registered strong performance in Q2FY27 with 20%+ revenue and EBIDTA growth during the quarter. Considering strong H1FY27 performance with 18% revenue growth and strong business outlook for H2FY27, the management has increased its revenue growth guidance to 15-17% for FY27 (from earlier 12-14%); driven by hotel business revenue growth of 17-19%. Sustenance of strong MICE demand in key markets, domestic leisure travel season and higher wedding days will help H2 hotel business to deliver strong performance in H2. Management fee income will continue to grow by 15-20%. International properties such as ST James – London and Pierre – New York are expected to post better growth in H2FY27. All this will lead to steady expansion in the EBIDTA margins. Thus, considering the strong demand for premium/luxury hotels and relative lesser supply in tier 1 towns ahead, we believe IHCL is well place to maintain double digit revenue growth momentum ahead in FY28/29 (including consolidation of Oriental express acquired portfolio).

Impact: Positive

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