The writing has been on the wall, and predictably and surely a confident IHCL has registered its best ever quarter till date. MD Puneet Chhatwal has not only provided strong leadership but also motivated his entire team to work in tandem. The group’s impressive showing is also reflective of the buoyancy in the business, which has now seen domestic tourism as the base for future growth. We interview Chhatwal for his comments on the success and how he sees the future for both IHCL and the industry as a whole.
The IHCL Group has shown unprecedented results for the third quarter of this financial. To what extent this heralds a new direction for the company and for the industry as a whole?
- The third quarter has been an outstanding quarter for IHCL:
- ALL TIME HIGH Q3 PAT OF INR 383 CRORES: UP 403% YoY, SURPASSES ANY FULL YEAR PAT
- BEST EVER EBITDA OF INR 655 CRORES UP 90% YoY
- RECORD EBITDA MARGIN OF 37.6%: UP 719 BASIS POINTS
- ACHIEVES FREE CASH FLOW OF INR 766 CRORES FOR NINE MONTHS ENDED 31STDECEMBER 2022
- The sector for three consecutive quarters has seen demand exceeding pre – Covid levels by 20%+.
Is this the new standard? Do u expect such sterling performances to continue?
- One of the key drivers of India’s expected GDP growth of 7% in fiscal 2023 has been the services sector led by Travel and Tourism. The demand outlook for our industry in 2023 continues to remain robust on the back of sporting events such as world cup hockey and cricket, global events like the ongoing G20 and recovery of inbound and corporate travel.
- Impetus on infrastructure development as announced in the budget today and demand outpacing supply for the next two to three years augurs well for sustaining this performance.
To what factors do you attribute this phenomenal growth?
Our strategy of a reimagined brandscape addressing a heterogenous market like India, restructured portfolio achieving a balance of managed and owned / leased hotels and re-engineering our margins through new businesses and asset management initiatives has enabled consecutive quarters of responsible profitable growth.
Some of key growth drivers of the third quarter results are:
– The iconic brand Taj has reached a portfolio of 95+ hotels and more than doubles its room inventory over the past five years
– Recent landmark hotels signed under the brand:
– Taj Riyadh, a 205-room hotel in the heritage city of Diriyah in Saudi Arabia
– Two Taj resorts in Lakshadweep – 110 room resort each on Suheli and Kadmat islands
– Opened three new Taj hotels across Kolkata, Wayanad and Jaipur and an addition to its palace portfolio with Sawai Man Mahal, Jaipur
– The prestigious G20 delegations hosted at Taj Lake Palace and Taj Fateh Prakash Palace in Udaipur, The Taj Mahal Palace and Taj Lands End in Mumbai and Taj Exotica Resort & Spa in Andamans
– Taj continues to retain the dual honour of World’s Strongest Hotel Brand and India’s Strongest Brand as per Brand Finance Hotels 50 Report 2022 and India 100 Report 2022
– Reached a milestone of 250+ hotels in its portfolio by signing a total of 30 hotels in FY 2022-23
– Strengthened its portfolio with opening of 14 new hotels in FY 2022-23 with four hotels each under Taj and SeleQtions brand, and three each under Vivanta and Ginger
– Introduced over 15 new destinations including Manali, Dharamshala, Raipur, Vrindavan and Jammu in 2022.
– Ginger achieved an EBITDA margin of 40% YTD FY 2022-23, driven by a Revenue of INR 225 crores – a growth of 41% over pre-COVID
– The Chambers, India’s first business club saw a 49% growth in revenue over 2019-20 with a rising membership base
– Qmin and amã Stays & Trails are on steady growth path with over 25 outlets and a portfolio of 108 bungalows respectively
FOOD & BEVERAGE
– TajSATS captured a market share of 58% clocking a Revenue of INR 449 crores YTD FY 2022-23, a 44% growth over pre-Covid
– Food & Beverage portfolio expansion continued with the opening of House of Nomad in Goa and Jaipur; Shamiana in Jaipur and Wayanad in the current quarter