Now Reading: EIH shares drop 6% on mixed Q1 results, expansion plans
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EIH shares drop 6% on mixed Q1 results, expansion plans
EIH shares fell 6% to Rs 307 on Friday after the company reported a 52% quarter-on-quarter profit decline despite a threefold year-on-year jump. Consolidated net profit stood at Rs 120.3 crore for…
The Story in Brief
EIH shares fell 6% to Rs 307 on Friday after the company reported a 52% quarter-on-quarter profit decline despite a threefold year-on-year jump. Consolidated net profit stood at Rs 120.3 crore for the June quarter, down from Rs 249.1 crore in the previous quarter. Revenue fell 26.6% sequentially to Rs 657 crore, while EBITDA margin contracted to 25.4%.
The company signed agreements for six new luxury hotels including properties in Kabini, Hampi, Coorg, Cairo, Amritsar and Pavana. Executive chairman Arjun Oberoi said India's travel boom presents a transformational opportunity, and the company is undertaking one of its most ambitious development programmes.
The Indian Opinion
The market's reaction to EIH's Q1 results seems overly focused on sequential declines, ignoring the strong year-on-year growth and ambitious expansion plans. The narrative that the company is struggling overlooks the simple reality of seasonal tourism cycles. With six new hotels signed and India's travel boom continuing, the real test will be whether EIH can maintain EBITDA margins above 25% as it scales up.
Source: livemint.com
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