Indian Hotels grows revenue, but higher tax and interest trim sequential profit
YoY margin improved as costs grew more slowly than revenue, while the 28.41% margin remained 17.17 percentage points above the sector median.
Filed 21 Oct 2026, 16:44 IST · after market close · Indian Hotels Co Ltd (INDHOTEL)
Key takeaways
- Consolidated revenue grew +21.73% YoY as expenses rose +20.93%, lifting operating margin by 0.48 percentage points.
- Sequential net profit fell -2.80% because the tax rate rose 3.56 percentage points and interest costs increased +13.79%.
- Management upgraded its full-year revenue outlook to 15–17% after opening nine hotels with 680 keys in Q2.
Price around the results
Revenue growth outpaced costs on a yearly basis
Consolidated revenue rose +21.73% YoY to Rs 2,484.32 cr, while expenses increased +20.93%, allowing operating profit to grow +23.79%. Sequentially, revenue grew +6.20%, but expenses grew faster at +6.72%, narrowing operating margin by 0.35 percentage points to 28.41%. The company opened nine hotels adding 680 keys during Q2, management said.
Tax and interest explain the sequential profit decline
Profit before tax increased +2.16% QoQ, but net profit fell -2.80% as the tax rate rose 3.56 percentage points to 30.27%. Interest costs also increased +13.79% QoQ, adding pressure below operating profit. Other income contributed 14.28% of pre-tax profit, so reported earnings included a meaningful non-operating component.
Margin remains well above peers despite two-quarter decline
Operating margin has declined for two straight quarters from 37.85% in Q3FY26 to 35.17% in Q4FY26, 28.76% in Q1FY27 and 28.41% in Q2FY27. Even so, the margin was 17.17 percentage points above the 11.24% median among 24 Consumer Discretionary peers that had reported. On a yearly comparison, margin improved because revenue grew faster than expenses.
Management points to expansion and a larger operating base
Management upgraded its full-year revenue outlook to 15–17% and said it expects 50 openings in FY27, with 400 operational hotels in Q3. It also said demand is expected to outpace supply in the near term. The presentation identifies a 280-hotel pipeline and says the OHL transaction covers seven hotels with 825 keys.
No post-result market reaction yet
The consolidated results were filed after market close, so there is no market reaction to assess yet. In the stock's eight recent result-day reactions, it fell six times, with a median absolute move of 4.07%, making declines the more common historical response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,484 cr | ₹2,339 cr | +6.20% | +21.73% |
| Other income | ₹78 cr | ₹80 cr | -2.81% | -8.93% |
| Expenses | ₹1,779 cr | ₹1,666 cr | +6.72% | +20.93% |
| Operating profit | ₹706 cr | ₹673 cr | +4.92% | +23.79% |
| Operating margin (%) | 28.41% | 28.76% | — | — |
| Interest | ₹65 cr | ₹57 cr | +13.79% | +15.68% |
| Depreciation | ₹174 cr | ₹163 cr | +7.04% | +20.25% |
| Profit before tax | ₹545 cr | ₹533 cr | +2.16% | +19.77% |
| Tax | ₹165 cr | ₹142 cr | +15.78% | +20.76% |
| Net profit | ₹380 cr | ₹391 cr | -2.80% | +19.35% |
| EPS (₹) | ₹2.46 | ₹2.51 | -1.99% | +23.00% |
Operating margin of 28.41% compares with a Consumer Discretionary sector median of 11.24% across 24 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.89% | +4.43% |
Volume on the results session was 5.03× 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.
This quarter
- Nine hotels opened during Q2, adding 680 keys.
Guidance & outlook
- The company upgraded its full-year revenue outlook to 15–17%.
- The company expects 50 openings in FY27 and 400 operational hotels in Q3.
- Demand is expected to outpace supply in the near term.
- Management fee growth is expected to continue with strong like-for-like growth.
Expansion
- The company has a diversified pipeline of 280 hotels.
- The company has a robust opening run rate of more than 5,000 keys annually.
- The OHL portfolio transaction covers seven hotels with 825 keys.
- The company opened nine hotels totaling 680 keys in Q2.
New initiatives
- The OHL transaction is intended to unlock operational synergies, expand direct asset ownership and accelerate long-term earnings growth.
- The transaction creates an asset management opportunity.
What to watch
- Whether operating margin recovers from 28.41% after two consecutive sequential declines.
- Whether the tax rate moves back from 30.27% toward the 26.71% recorded in Q1FY27.
- Progress against management's 15–17% full-year revenue outlook and 50-opening FY27 plan.