Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EIH Ltd (BOM:500840, Financial) reported a strong RevPAR growth of 14% to 16% compared to the previous year, indicating robust performance in the hospitality sector.
- The company has maintained a high occupancy rate of 79% to 80%, driven by a healthy increase in Average Room Rates (ARR).
- EIH Ltd's international hotels have shown a 20% growth in RevPAR, recovering from previous disruptions such as the Israel conflict.
- The company has a strong cash flow position, supporting its expansion plans, including 19 properties in the pipeline.
- EIH Ltd's flight services segment has shown significant growth in both top-line and EBITDA, reflecting strong performance in this area.
Negative Points
- The company experienced a revenue growth of only 6% on a stand-alone basis, partly due to the closure of a hotel in Calcutta for renovation.
- There was a discrepancy between the reported 17% RevPAR growth and the 8% absolute revenue growth, raising questions about the reconciliation of these figures.
- EIH Ltd faced challenges with the cancellation of a hotel project in Pune, indicating potential hurdles in expansion plans.
- The company has not provided a clear revenue guidance for the next 3 to 5 years, leaving investors uncertain about future financial performance.
- Concerns were raised about the impact of stock market fluctuations on the luxury hotel market, although EIH Ltd has not conducted a formal analysis on this correlation.
Q & A Highlights
Q: How has the trend in ADR been in January and February of this quarter, and can similar growth be expected in the future?
A: Vikram Oberoi, CEO, stated that they continue to drive ADR and are confident in maintaining this trend. He believes there is considerable opportunity to enhance ADRs substantially, given the high occupancy rates and the quality of hotels relative to global standards.
Q: Why was the Pune project canceled, and is there a conservative approach to owning hotels?
A: Vikram Oberoi, CEO, mentioned that they are disappointed the Pune project did not happen but are keen to explore other opportunities. He emphasized that growth is a top priority, whether through JVs, management opportunities, or owned properties.
Q: What is the proportion of properties owned by EIH, and what is the market value of the land?
A: Vikram Oberoi, CEO, noted that they haven't done a valuation on the land side and did not provide specific figures. He mentioned that the hotels are owned by EIH on a 99-year lease.
Q: Can you explain the difference between RevPAR growth and absolute revenue growth?
A: Vikram Oberoi, CEO, explained that the Grand Hotel's closure for renovation impacted the numbers. Excluding the Grand, revenue growth is 11% and EBITDA growth is 14%. Other factors include food and beverage revenue and asset discards due to renovations.
Q: How does the stock market's performance impact your business?
A: Vikram Oberoi, CEO, stated that they have not analyzed the correlation between stock market movements and their business. However, strong RevPAR growth and high occupancy levels suggest that recent stock market declines have not impacted them.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
