 "Kumbh Mela Boost: This Indian Hotels arm shares hit new high; up 34% in Jan")
Shares of Benares Hotels hit a new high at Rs 10,990, as they rallied 15 per cent on the BSE in Tuesday’s intra-day trade in an otherwise weaker broader market on expectations of record revenue in the March quarter (Q4FY25), due to strong domestic demand on account of Kumbh Mela and related travels in the Uttar Pradesh region.
Thus far in the month of January, the stock price of this smallcap hotel company has zoomed 34 per cent, as compared to 2.2 per cent decline in the BSE Sensex. The BSE Midcap and Smallcap indices, meanwhile, fell 10 per cent and 17 per cent, respectively.
Benares Hotels operates its hotels, viz. Taj Ganges and Taj Nadesar Palace in Varanasi and Ginger, Gondia in Maharashtra. The Indian Hotels Company Limited (IHCL) is the ultimate Holding Company of Benares Hotels.
For October to December quarter (Q3FY25), Benares Hotels reported 20 per cent year-on-year (YoY) growth in profit after tax (PAT) at Rs 13.60 crore. Revenue grew 16.2 per cent to Rs 40.1 crore over the previous year quarter.
The company reported three consecutive quarters of high double-digit growth in revenue leading to an all-time high earnings before interest, tax, depreciation and amortisation (EBITDA) margin 46 per cent and PAT of Rs 27.2 crore for the nine-month period ending December 2024. Domestic demand continues to be strong and quarter four is expected to deliver record revenue with the upcoming Kumbh Mela and related travels in the region, the management said.
Meanwhile, the Indian hotel industry is expected to register a revenue growth of seven to nine per cent in the next financial year 2024-25, according to a report by credit ratings firm ICRA. According to ICRA, estimates for pan-India hotel occupancy reached a decadal high of 70 per cent to 72 per cent in the current financial year and next fiscal, as compared to 68 per cent to 70 per cent in 2022-23.
Also Read
Indian hospitality industry is expected to have a robust growth, currently valued at $24.61 billion in 2024, This figure is projected to reach $31.01 billion by 2029, reflecting a compound annual growth rate (CAGR) of 4.73 per cent. The overall medium-term outlook remains positive, supported by factors such as improved infrastructure, enhanced air connectivity, favourable demographics, and the opening of new convention centres in recent year.
Growth in the industry is largely expected from domestic demand which is expected to remain strong through FY 2024-25 even as international travel has shown green shoots of recovery and provides scope for further growth in demand. The continuity in Government policy along with impetus on infrastructural development, resumption of diplomatic movements after elections is expected to increase demand for hotels in the cities hosting the movements, the company said in its FY24 annual report.
In line with the consistent increase in demand and high occupancies, the company has commenced the construction of a 100-room tower with larger rooms and takes the total inventory to 230 rooms at Taj Ganges, Varanasi, the company said.