Indian Hotels Q2 loss shrinks, revenue more than doubles as pandemic wanes
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Last Updated: 10th December 2022 - 05:31 pm
Indian Hotels Co. Ltd on Thursday reported a revival in its fortunes as second-quarter losses declined significantly from the previous three months, when the second wave of the coronavirus pandemic had jolted its business.
The Tata Group company that operates the Taj hotel chain reported a consolidated loss slightly in excess of Rs 130 crore for the quarter ended September 30. This is a significant improvement over the April-June period when it had lost Rs 301.5 crore on a consolidated basis.
In fact, this was a massive improvement even over the same period last year when Indian Hotels lost Rs 252 crore on a consolidated basis, as the country went into a nationwide lockdown in the wake of the first wave of the pandemic.
In the three months ended September, Indian Hotels clocked consolidated revenue of Rs 752.28 crore as against just Rs 370.3 crore in the previous three months and Rs 323.54 crore a year earlier.
These improved numbers come even as Indian Hotels’ subsidiary Roots Corporation, which runs the budget chain Ginger Hotels, is reportedly set to float an initial public offering.
Indian Hotels Q2: Other highlights
1) Indian Hotels clocked a consolidated loss of Rs 432 crore for April-September as against Rs 564 crore a year earlier.
2) Its board approved a rights issue and a qualified institutional placement of Rs 2,000 crore each.
3) Indian Hotels will acquire a 39.84% stake in Roots Corp for Rs 500 crore and make it a wholly owned subsidiary.
4) It will buy the stake from Omega TC Holdings Pte Ltd, Tata Capital Ltd, Tata Investment Corporation and Piem Hotels.
Indian Hotels management commentary
Indian Hotels said its business has been impacted during the half-year period on account of COVID-19. The company said it witnessed softer revenue during the first quarter due to the second wave of COVID-19 and consequent lockdowns in several states in India. However, as the lockdowns were lifted, it saw demand coming back.
The management of the company said that it has secured additional financing for the next 12 months to prevent disruption of the operating cash flows and to enable it to meet its debts and obligations.
Puneet Chhatwal, Managing Director and CEO at IHCL, said that overall recovery has been stronger and quicker after the second wave.
“IHCL has seen significant improvement in performance quarter on quarter and the revenues grew by 132% over Q2 last year. The company has delivered a positive EBITDA of Rs 97 crore in this quarter,” he said.
Chhatwal also said that the fundraise of Rs 4,000 crore will enable it to be a zero-debt company in the future and help fund the company’s expansion as well as its capital expenditure plans.
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