Tata group-backed Indian Hotels Company (IHCL) has set its sights on achieving double-digit topline growth this fiscal year. With aspirations to unveil 25-30 new hotels, IHCL is poised not only to expand its footprint domestically but also to venture into international markets. Nonetheless, its core emphasis will remain steadfastly on India’s flourishing hospitality industry.
“Our dedication encompasses the upkeep of zero net debt alongside the accumulation of cash reserves, strategically positioning us for forthcoming investments in cash deployment, capital expenditures, mergers and acquisitions, or strategic reserves,” remarked Puneet Chhatwal, Managing Director of IHCL.
He expressed that FY25 will mark a ‘breakthrough year’ for the company’s international expansion, emphasizing that the primary focus will continue to be on the Indian subcontinent. “Our international expansion targets at least three hotels outside of India, with contracts already finalized, including two in Bhutan. Additionally, discussions are ongoing for potential locations such as Dubai, London, Frankfurt, and others. Concurrently, we have two hotels under construction in Dhaka, with several negotiations underway in the Indian peninsula, Sri Lanka, and neighboring regions,” he elaborated.
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He mentioned that IHCL, renowned for brands such as Taj, Ginger, and Vivanta, is actively pursuing opportunities in Southeast Asia while also vigilantly monitoring developments in the European market.
“Although we’re exploring potential ventures in the Middle East, including Bahrain, Saudi Arabia, and Abu Dhabi, we’re proceeding cautiously, focusing solely on opportunities that harmonize with our strategic objectives,” remarked Chhatwal. He emphasized that despite ambitious expansion initiatives, South Asia will account for 95% of IHCL’s portfolio, with only 5% located outside of this region.
“This strategic approach will remain the same emphasising our commitment to investing in the Indian subcontinent rather than sending funds elsewhere,” he stated. Chhatwal stated that there is a “vast” and still-untapped potential for expansion in the Indian market.
“Presently, India boasts a branded hotel inventory of 200,000 rooms, poised to surge to a million within the next 7-10 years—an exponential growth of 5x. With emerging destinations and a plethora of new airports on the horizon, the demand for accommodation is skyrocketing,” he explained.
“With the arrival of 1,000 new aircraft in India and the ongoing expansion of infrastructure such as highways and high-speed trains, mobility is set to soar, paralleled by a surge in hotel demand. Moreover, the imminent infrastructure boom, featuring new airports, highways, and rail networks, further underscores the need for our business to attain full infrastructure status, in line with government objectives. This alignment presents a win-win scenario; increased private investment will complement governmental initiatives, fostering a resilient growth trajectory,” he elaborated.
IHCL recorded a 29% year-over-year increase in net profit to INR 438 crore during the fourth quarter of its fiscal year. The revenue for the quarter that ended on March 31 increased by 17% compared to the same period last year, reaching INR 1,905.3 crore. Moreover, IHCL had previously said that it would launch the redesigned Gateway, a full-service hotel in the high-end market that it thinks will be a “perfect fit” for seizing expansion prospects in developing metro areas & tier-II as well as tier-III cities.
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