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Indian Hotels Company (IHCL) sustained mid-teen growth for the second consecutive quarter

ICICIdirect Research 22 Jul 2026 DISCLAIMER

News: Indian Hotels Company (IHCL) sustained mid-teen growth for the second consecutive quarter, with consolidated revenues growing 14.6% YoY to Rs.2339cr. Performance was driven by the standalone (domestic) business, which reported 18% YoY revenue growth to Rs.1232cr, while international subsidiaries (UOH+UK+PIEM) remained muted at 4.2% YoY due to the ongoing West Asia crisis and operational issues. Hotel business revenues grew 17% YoY to Rs.2121cr, while air catering revenues remained largely flat at 3% YoY growth to Rs.300cr due to lower air traffic amid the West Asia crisis. Standalone room and F&B revenues grew 16% YoY to Rs.513cr and 9% YoY to Rs.392cr, respectively. Standalone RevPAR grew by 14% YoY to Rs.11800/night, driven by 6% YoY ARR growth to Rs.14930/night and 600bps YoY occupancy expansion to 82%. Consolidated EBITDA margins improved 54bps YoY to 28.8% (standalone: +396bps YoY to 38.4%), with hotel business margins expanding 110bps YoY to 30.1% while air catering margins declined 350bps YoY to 19.5% due to lower air traffic. Consequently, consolidated EBITDA grew 17% YoY to Rs.672.7cr, while adjusted PAT increased 19% YoY to Rs.390.8cr in Q1FY27.

View: IHCL’s Q1FY27 performance was exactly in line with our estimates. Demand trends across the domestic market remained strong driven by leisure travel. The management expects this momentum to continue in Q2FY27, with domestic demand remaining strong in July, indicating another quarter of healthy growth. The performance of the international business will depend on the evolving geopolitical situation in West Asia. Domestic outlook remains positive with leisure demand expected to remain high while MICE/event demand is expected to come back in H2.  Further recent acquisition and room addition will incrementally add to the room revenues. Further if the geopolitical situation eases, foreign tourist arrival will improve in H2 adding to the room demand. Overall, the management has maintained its guidance of delivering double-digit revenue growth in FY27.

Impact: Positive

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