IHCL raises FY27 outlook as Q2 profit climbs 23 per cent and hotel demand stays firm

Indian Hotels Company Ltd. reported a 23 per cent year-on-year rise in consolidated profit after Tax to Rs 349 crore for the second quarter of FY27, as robust domestic travel demand, higher occupancy and improved room rates lifted its core hotel business.

Total revenue rose 21 per cent to Rs 2,566 crore, while revenue from operations increased 22 per cent to Rs 2,484 crore. Operating EBITDA grew 24 per cent to Rs 706 crore and the operating EBITDA margin expanded by 50 basis points to 28.4 per cent.

The Tata group hospitality company described the July-September quarter as its 18th consecutive best-ever quarter. Consolidated PAT margin stood at 13.6 per cent, while total EBITDA rose 21 per cent to Rs 788 crore. The total EBITDA margin was largely stable at 30.7 per cent compared with 30.8 per cent a year earlier.

The performance was led by the hotel segment, which contributed operating revenue of Rs 2,204 crore, up 25 per cent year-on-year. This represented nearly 89 per cent of consolidated operating revenue for the quarter, underlining the continuing importance of the core hotel portfolio despite the company’s expansion into catering and other hospitality formats.

Hotel segment operating EBITDA increased 30 per cent to Rs 655 crore, with the margin improving to 29.7 per cent. Room revenue rose 22 per cent to Rs 1,115 crore, food and beverage revenue was up 20 per cent to Rs 686 crore, while management fees grew 25 per cent to Rs 156 crore. Other operating income increased 72 per cent to Rs 247 crore.

Domestic hotel demand remained the key driver. Standalone RevPAR increased 28 per cent year-on-year to Rs 13,860, aided by occupancy rising to 82 per cent from 75 per cent a year earlier. Consolidated domestic hotel RevPAR grew 25 per cent to Rs 8,220.

Growth was broad-based across markets, with like-for-like domestic hotel revenue and fee income rising 51 per cent in Bengaluru, 25 per cent in Rajasthan, 16 per cent in Goa and 12 per cent in Mumbai. The company said these numbers exclude hotels opened after April 1, 2025.

IHCL raised its FY27 total revenue growth outlook to 15-17 per cent year-on-year and expects consolidated hotel revenue growth of 17-19 per cent. The upgraded outlook reflects continued like-for-like TRevPAR momentum, improved yield from renovated hotels, expected openings in the second half and contributions from acquisitions.

The company has opened 20 hotels in the first half and plans to open another 30 in the second half, taking FY27 planned openings to 50. IHCL had 390 operational hotels and a pipeline of 280 hotels as of September 30, 2026, and expects to cross 400 operational hotels during the third quarter.

A near-term qualification is the air catering business, where quarterly revenue declined 1 per cent to Rs 285 crore and operating EBITDA fell 24 per cent to Rs 50 crore. The margin in the business declined to 17.8 per cent as temporary softness in air traffic affected volumes.

IHCL also announced a strategic transaction involving the OHL portfolio of seven hotels with 825 keys across southern India. The deal, which includes Taj Coromandel and Taj Fisherman’s Cove in Chennai, Taj Malabar in Kochi and other properties, is expected to lift standalone operating revenue and EBITDA by 6-7 per cent in FY28. The merger has an appointed date of April 1, 2027.

As of 10:20 AM on October 22, 2026, IHCL shares were trading at Rs 783.35, up 4.17 per cent from the previous close. The stock has gained 3.04 per cent over the past year, compared with an 8.25 per cent decline in the BSE 500, an outperformance of about 11.3 percentage points.

Disclaimer: The article is for informational purposes only and not investment advice.