INDHOTEL

’s Balance Sheet Strength Supports Inorganic Expansion

(IHCL) reported healthy Q3FY26 results, driven by strong demand in both domestic and international markets. Revenues rose 11% YoY to ₹2,579 crore, with consolidated RevPAR up 9% YoY to ₹13,800. Occupancy improved to 78%, while average room rates grew 7% YoY. Profitability was supported by operating leverage, with reported profits up 55% YoY, aided by exceptional gains. With a robust expansion pipeline and new businesses scaling rapidly, IHCL is well-positioned to benefit from the sustained hotel industry upcycle. Financial & Operating Performance - Revenue: ₹2,579 crore, +11% YoY. - RevPAR: ₹13,800, +9% YoY. - Occupancy: 78%, +120 bps YoY. - ARR: ₹17,700, +7% YoY. - Operating profit: +12% YoY. - Exceptional gains: ₹399 crore stake sale, offset by ₹124 crore labour code & property tax charges. - Reported profit: +55% YoY. Domestic & International Business - Domestic RevPAR: +7% YoY, demand outstripping supply. - International RevPAR: Strong growth in US, South Africa, London; aided by INR depreciation. - Air catering: ₹323 crore, +17% YoY. Expansion Pipeline & New Businesses - Pipeline: ~30,200 keys, nearly equal to current inventory of 32,300 keys. - 80% additions via asset-light management contracts. - New businesses: Ginger (~11,000 keys), Q-Min (food), Ama (bungalow stays), Tree of Life (boutique hotels). - Acquisition of Clarks (ANK & Pride, ~8,000 keys) strengthens mid-market presence. - New businesses expected to grow >25% in FY27. Balance Sheet & Inorganic Growth - Cash reserves: ₹3,900 crore (Dec 2025). - Free cash flow: ₹800 crore in 9MFY26. - Recent acquisitions: Atmantan (wellness) and Brij (boutique leisure), expected to add ₹180–200 crore to FY27 revenues. Valuation & Outlook - Guidance: RevPAR growth 8.5–10%, revenue growth 12–14% in FY27. - EV/EBITDA: 26x FY27E. - Recommendation: Add for long-term investors, supported by strong brand, expansion pipeline, and balance sheet strength.