Now Reading: EIH shares fall 6% as Q1 net profit declines 52% QoQ
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EIH shares fall 6% as Q1 net profit declines 52% QoQ
Shares of EIH, which owns the Oberoi and Trident hotel chains, fell 6% to Rs 307 on Friday after the company reported mixed Q1 results. Consolidated net profit jumped more than threefold…
The Story in Brief
Shares of EIH, which owns the Oberoi and Trident hotel chains, fell 6% to Rs 307 on Friday after the company reported mixed Q1 results. Consolidated net profit jumped more than threefold year-on-year to Rs 120.3 crore, but declined 52% sequentially from Rs 249.1 crore. Revenue rose 14.5% YoY to Rs 657 crore but fell 26.6% QoQ. EBITDA margin contracted to 25.4% from 28.4% a year ago.
The company, however, announced an ambitious expansion plan, signing management agreements for six new luxury hotels, including properties in Kabini, Hampi, Coorg, Cairo, Amritsar and Pavana. Executive chairman Arjun Oberoi said the move is part of one of the most ambitious development programmes in EIH's history, betting on India's growing travel and tourism market.
The Indian Opinion
Investors who only see the sequential profit drop are missing the bigger picture. The QoQ decline is largely seasonal, Q4 is always the strongest quarter for hotels. The real story is the threefold YoY profit jump and the bold expansion into six new properties. The test will come next quarter: if EIH can show a strong sequential recovery, the pessimism will look short-sighted. Until then, the market's sell-off feels exaggerated.
Source: livemint.com
This story was synthesised by AI from the source linked above.
