Hotel stocks on a tear, but beware

Staying robust The Indian hotel industry has seen notable revenue growth in recent years.

- Shubham Di [e-mail]

India’s hotel industry has been having its moment in the sun. Revenues of hotel companies are rising, margins are near all-time highs, and stock prices have been on a dream run.

In the three years to 24 September, shares of The Indian Hotels Co. Ltd (IHCL) recorded a compound annual growth rate (CAGR) of 31%, EIH Ltd 27%, and Chalet Hotels Ltd an impressive 42%.

Growth delivered, too. IHCL’s consolidated revenues have increased at a 40% CAGR in three years to FY25, with Ebitda margin jumping from 13% to 33%, while Chalet’s hospitality revenue is up by 55% CAGR. EIH’s turnaround has been impressive, with 40% CAGR in revenue and margin improving from -3% in FY22 to 37% in FY25.