Indian Hotels' net loss narrows to Rs 130 cr in Q2 on strong recovery

To raise Rs 4000 cr via Rights Issue and QIP

Tata group hospitality firm Indian Hotels Co Ltd (IHCL) on Thursday said it's losses for the September quarter narrowed year on year on the back of recovery of demand, especially in leisure destinations. 

Consolidated net loss at the owner of Taj, Ginger, Vivanta among other brands reduced to Rs 130.92 crore against a net loss of Rs 252.09 crore in the year-ago period. 

"Most leisure destinations have seen a very strong demand. Palace properties have exceeded our expectations, " Puneet Chhatwal, managing director and chief executive officer,  IHCL told investors in a post earnings conference call.  

Even the corporate demand is coming back faster than the expectations.  Whatever the gap exists will be addressed by the end of Q3 unless something happens, he added. 

The South Asia's biggest hospitality chain said it got approval from its shareholders to raise Rs 4,000 crore from Rs 3,000 crore approved earlier in August this year.

The enhanced fundraising plan includes a rights issue to the existing shareholders of the company for an amount of up to Rs 2,000 crore, followed by the qualified institutional placement (QIP) of equity shares for up to Rs 2,000 crore. 

The fund  raise is aimed at making IHCL a zero debt company. Company's consolidated net debt at the end of September quarter stood at Rs3571 crore, down from 3671 crore in the June quarter. It's however is still higher by 86 per cent than what it used to be in the pre-Covid quarter. 

 Consolidated revenue from operations in the second quarter stood at Rs 728.37 crore as against Rs 256.67 crore in the corresponding period last fiscal. 

Revenue per average room for the standalone entity including Ginger, during the first half rose 143 per cent year on year to Rs3314. 

Total expenses during the second quarter rose to Rs 871.14 crore from Rs606.62 crore in the same period last fiscal.

The business has been impacted during the half-year period on account of COVID-19. During the first three months of the year, the group witnessed softer revenues due to the second wave of COVID-19 and consequent lockdowns in several states in India, where the group predominantly operates, the filing said.

"However, in the beginning of the current quarter, the lockdowns were lifted due to lower active COVID-19 cases and increased vaccinations, and the group witnessed positive recovery of demand, especially in leisure destinations and business is gradually expected to improve," it added.