The Indian Hotels Company Ltd Quarterly Results Q4 FY 25 stock analysis

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Sector Outlook: Positive

Solid Quarterly Growth on Strong Demand

In Q4FY25, the company delivered a strong performance with revenue growing 27.3% year-on-year to ₹24,251 million, thanks to higher occupancy levels (80.1%) driven by major events like Mahakumbh, Coldplay concerts, a limited hotel supply, and rising domestic tourism in cities like Mumbai, Bangalore, Delhi, and Hyderabad. International business also saw solid growth, especially from hotels in New York. The average room rate rose 14% to ₹21,013, boosting revenue per room (RevPAR) by 16% to ₹16,842. EBITDA stood at ₹8,568 million with margins improving to 35.3%, while net profit rose 28% to ₹5,627 million. The company added 559 rooms during the quarter and plans to add 697 more in Q1FY26, with a larger pipeline of 137 hotels (19,500 rooms). It expects to continue double-digit revenue growth in FY26 through new hotel openings, price increases, and rising foreign tourist arrivals.

Key Concall Highlights

The hospitality sector is doing well due to strong local travel demand, limited new hotel supply, and a busy wedding season.
This positive trend is expected to continue with rising incomes, more tourist spots, increasing foreign tourist arrivals, and many wedding dates in FY26.
In FY25, IHCL signed 74 new hotels and opened 26, taking its total operational hotels to 243.
Over 95% of the new deals are asset-light, helping the company build an industry-leading pipeline of 134 upcoming hotels.
IHCL is expanding across all segments with a focus on premium offerings. Ginger’s upgrade to a “Lean Luxe” brand is showing good progress.
New business segments have contributed significantly to both revenue and profit margins.
For FY26, IHCL plans to invest ₹1,200 crore — 60–65% for renovations and tech upgrades, and the rest for selective new projects, including one in Ektanagar with Vivanta and Ginger.
International business also showed strong double-digit growth, mainly driven by The Pierre hotel in New York.
15% of bookings in FY25 came directly from IHCL’s website, improving profitability and customer connection, supported by Tata Neu and digital upgrades.

Valuation and Outlook

IHCL had a strong Q4FY25 and is confident of continuing double-digit growth in FY26 by improving cash flows and keeping a solid balance sheet. The company expects its new business segments and focus on earning more through management fees to further boost profit margins. Its loyalty program via Tata Neu is helping bring back more repeat customers, increasing revenue. Growth is expected to continue with more foreign tourist arrivals, a rise in wedding events in CY26, increasing tourism, and higher demand from business events (MICE). International operations, especially in New York, are also expected to maintain strong performance and improve margins. With a goal of reaching 700 hotels by 2030, IHCL is well-positioned to benefit from the ongoing gap between rising demand and limited supply in the hospitality sector.