EIH margin narrows 5.10 points as costs outpace revenue growth
Revenue rose +8.19% YoY, but higher expenses and tax more than offset the benefit of a +82.36% increase in other income.
Filed 26 May 2026, 18:43 IST · after market close · EIH Ltd (EIHOTEL)
Key takeaways
- Consolidated revenue rose +8.19% YoY, but expenses grew +17.75%, narrowing operating margin by 5.10 percentage points to 37.3%.
- Net profit fell -4.79% YoY even as pre-tax profit rose +3.76%, with other income contributing 21.3% of pre-tax profit and the tax rate rising 6.07 percentage points.
- The stock fell -8.82% five sessions after the results, compared with a 2.46% median absolute move after its last eight results.
Price around the results
Revenue grew, but operating profit declined
EIH’s consolidated revenue increased +8.19% YoY to Rs 895.22 cr, but operating profit fell -4.80% as expenses rose +17.75% to Rs 561.27 cr. The resulting cost growth was more than twice the pace of revenue growth, narrowing operating margin by 5.10 percentage points to 37.3%. Pre-tax profit still rose +3.76%, helped by other income, but net profit declined -4.79% to Rs 249.1 cr.
Other income cushioned the pre-tax line
Other income rose +82.36% YoY to Rs 78.45 cr and accounted for 21.3% of pre-tax profit, making the earnings quality less dependent on operating performance. The tax rate increased 6.07 percentage points to 32.37%, while depreciation rose +15.04% and interest increased +4.62%. These items explain why the higher pre-tax profit did not translate into higher net profit.
Margin recovery from Q2 lost momentum in Q4
Sequentially, revenue rose +2.56%, but expenses increased +13.01%, leading to an operating-margin decline of 5.80 percentage points from Q3FY26. The 37.3% margin was below Q3FY26’s 43.1%, though it remained above the 25.71% recorded in Q2FY26; the trend therefore shows a rebound followed by a setback rather than a continuous decline. EIH remained 22.49 percentage points above the 14.81% median operating margin of the 93 Consumer Discretionary peers that had reported.
Management outlined a seven-property expansion pipeline
Management said the owned-hotels development pipeline comprises seven properties with 825 keys, with openings expected between 2027 and 2030. The presentation identified Trident Visakhapatnam, The Oberoi Goa, Cavelossim and The Oberoi London among the properties expected to open in 2027 and 2028. Management also said The Oberoi Rajgarh and The Oberoi Vindhyavilas opened during the period, while Trident Jaipur closed.
Five-session market reaction was worse than usual
The stock fell -2.09% on the first trading day after the results and was down -8.82% after five sessions. Its first-day decline was close to the 2.46% median absolute move following its last eight results, when the stock fell on all eight occasions. The five-session decline was therefore notably larger than its usual immediate reaction.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹895 cr | ₹873 cr | +2.56% | +8.19% |
| Other income | ₹78 cr | ₹26 cr | +204.54% | +82.36% |
| Expenses | ₹561 cr | ₹497 cr | +13.01% | +17.75% |
| Operating profit | ₹334 cr | ₹376 cr | -11.24% | -4.80% |
| Operating margin (%) | 37.30% | 43.10% | — | — |
| Interest | ₹6 cr | ₹6 cr | +9.09% | +4.62% |
| Depreciation | ₹38 cr | ₹37 cr | +3.55% | +15.04% |
| Profit before tax | ₹368 cr | ₹360 cr | +2.38% | +3.76% |
| Tax | ₹119 cr | ₹105 cr | +13.55% | +27.71% |
| Net profit | ₹249 cr | ₹255 cr | -2.22% | -4.79% |
| EPS (₹) | ₹3.80 | ₹3.89 | -2.31% | -5.94% |
Operating margin of 37.30% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.09% | -2.07% |
| Next session | -7.41% | — |
| 5 sessions | -8.82% | -6.74% |
| 15 sessions | -1.06% | — |
| 30 sessions | +3.08% | — |
Volume on the results session was 1.02× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- The owned hotels development pipeline comprises seven properties with 825 keys, expected to open between 2027 and 2030.
- The pipeline includes Trident Visakhapatnam, The Oberoi Goa, Cavelossim and The Oberoi London, with openings expected in 2027 and 2028.
- The pipeline includes Trident Tirupati, The Oberoi Gandikota, Oberoi Hebbal and Trident Hebbal, with openings expected from 2029 to 2030.
- The Oberoi Rajgarh and The Oberoi Vindhyavilas opened during the period, while Trident Jaipur closed.
What to watch
- Whether operating margin recovers from 37.3% after the 5.10-percentage-point YoY decline.
- Whether expense growth slows from +17.75% YoY relative to revenue growth of +8.19%.
- Whether the contribution of other income falls below 21.3% of pre-tax profit.