IHCL expects to beat FY27 guidance if West Asia tensions ease

MUMBAI: Indian Hotels Company Limited (IHCL) expects to exceed its upgraded fiscal 2027 guidance if geopolitical tensions in West Asia ease, according to CEO Puneet Chhatwal. The hospitality major anticipates that a stabilization in the region will particularly benefit its airline catering and overseas hotel segments, which have recently faced operational headwinds.

Chhatwal highlighted that the company’s strategic diversification, robust cash reserves, and expansion into new business verticals position it for sustained growth. This optimism follows a strong financial performance, with the company reporting its 17th consecutive record quarter in the first quarter of FY27.

In Q1 FY27, IHCL’s enterprise revenue grew 14 per cent year-on-year to ₹4,100 crore, while consolidated revenue rose 15 per cent to ₹2,419 crore. Consolidated profit after tax surged 21 per cent to ₹358 crore, driven by a 14 per cent increase in Revenue Per Available Room (RevPAR) to ₹8,400. Domestic demand remained the primary engine, with standalone occupancy jumping to 82 per cent from 76 per cent in the prior year.

The company’s multi-brand strategy also yielded strong results across its portfolio. The flagship Taj properties posted a 14 per cent RevPAR growth to ₹12,900 per night, while mid-scale brands achieved 16 per cent growth. Notably, the Taj Ganges Varanasi property, which added 100 new keys in March 2026, generated ₹30 crore in turnover during the quarter, representing a 44 per cent year-on-year growth with a 40 per cent EBITDA margin.

However, the air catering segment faced challenges, with revenue growing just 3 per cent and EBITDA declining 10 per cent due to weak air traffic conditions. This contrast underscores the impact of geopolitical and aviation headwinds on the company's diversified portfolio. If West Asia tensions ease, the resulting increase in international flight capacities could reverse the air catering slump and revive overseas hotel demand.

Furthermore, India’s broader macroeconomic tailwinds provide a strong foundation for domestic hospitality growth. The International Monetary Fund projects India to become the world’s third-largest economy by 2027, supporting increased domestic travel and spending.

Looking ahead, IHCL’s strategy of balancing owned, leased, and managed properties appears to be yielding results. As the company navigates global uncertainties, its focus on execution excellence and asset management will be critical in converting top-line growth into sustained bottom-line profitability.