indian hotels co ltd share price Management discussions

Economic environment and industry insight

Global economy: The year in review

The global economy resumed its path of recovery even with the resurgence of new variants of the COVID-19 pandemic. After initial nationwide lockdowns deployed during the first wave, fewer nations resorted to zero- tolerance policies to control the virus. On the contrary, governments encouraged COVID-19 appropriate behaviour, improvements in healthcare infrastructure, increased coverage of testing and wide vaccination drives while resorting to localised containment measures to control subsequent waves. Following a contraction of 3.1% in the calendar year 2020, global growth is estimated at 6.1% in 2021. Growth estimates for 2021 of advanced economies is 5.2% while that of emerging markets and developing economies are pegged at 6.8%. For the same period, economic growth estimate for United States of America (USA) is 5.7% and the United Kingdom (UK) is 7.4%. Emerging and Developing Asian economies is estimated to have grown by 7.3% with the Indian economy estimated to have grown by 8.9% and China by 8.1%. The economies of Maldives, South Africa and Nepal is estimated to have grown by 33.4%, 4.9% and 2.7% respectively while Bhutan is estimated to have contracted by 3.7% in 2021. (Source: International Monetary Fund (IMF) - World Economic Outlook - October 2021 and April 2022).

More recently, difficult economic conditions posed by inflationary trends across nations, pandemic led supply- side disruptions accentuated by the geopolitical situation in Europe and possibilities of new strains of a mutating virus threaten to hinder global manufacturing and trade thereby impacting the general economic sentiment. In this context, the global economy is projected to grow at 3.6% in 2022 and 2023. USA is projected to grow by 3.7% in 2022 and 2.3% in 2023 while the UK is projected to grow by 3.7% in 2022 and 1.2% in 2023. The IMF projects a growth rate of 8.2% for India in 2022 and 6.9% in 2023 while China is projected to grow by a modest rate of 4.4% in 2022 rising to 5.1% in 2023. Emerging and Developing Asia is projected to grow by 5.4% in 2022 and 5.6% in 2023. The economies of Maldives, South Africa, Nepal and Bhutan is projected to grow by 6.1%, 1.9%, 4.1% and 4.4% in 2022 and 8.9%, 1.4%, 6.1% and 4.5% in 2023 respectively. (Source: IMF - World Economic Outlook - April 2022).

Real GDP, Year over Year % change
Actuals Estimate Projections
2019 2020 2021 2022 2023
World Output 2.8 -3.1 6.1 3.6 3.6
Advanced Economies 1.7 -4.5 5.2 3.3 2.4
United States of America 2.3 -3.4 5.7 3.7 2.3
United Kingdom 1.4 -9.4 7.4 3.7 1.2
Emerging Market & Developing Economies 3.7 -2.0 6.8 3.8 4.4
Emerging and Developing Asia 5.4 -0.9 7.3 5.4 5.6
India 4.0 -7.3 8.9 8.2 6.9
China 6.0 2.3 8.1 4.4 5.1
ASEAN-5 4.9 -3.4 3.4 5.3 5.9
Emerging and Developing Europe 2.5 -1.8 6.7 -2.9 1.3
Sub Saharan Africa 3.1 -1.7 4.5 3.8 4.0
Middle East and Central Asia 1.5 -2.8 5.7 4.6 3.7

Source: IMF World Economic Outlook, October 2021 and April 2022

Earlier, the World Bank in its report of January 2022 forecasted global economic output to expand by 4.1% in 2022 and moderate to 3.2% in 2023. It attributed the decelerated growth in 2022 to continued COVID-19 infections, diminished fiscal support, higher inflationary conditions and lingering supply bottlenecks. The moderation of growth in 2023 is mainly due to waning pent-up demand and further removal of all supportive macroeconomic policies. (Source: Global Economic Prospects-World Bank - January 2022).

While the World Bank Report was released before the outbreak of the war in Ukraine, the recent IMF Outlook pared global growth in 2022 from its earlier projection of 4.4% in January 2022 to 3.6% in its report of April 2022. The recent war between Russia and Ukraine has caused major disruption in trade especially exports of crude oil, natural gas, edible oil, wheat, corn, metals, fertilisers, etc. from the Black Sea region further contributing to increase in global energy costs and commodity prices. Global crude oil prices crossed US$ 130 per barrel, its highest level since 2008, and despite some correction, remains at elevated levels. Closer home, Sri Lankas economy, impacted by reduced foreign currency inflows due to the pandemic, further worsened by increased crude oil prices resulting in a depletion of its foreign currency reserves. This has impacted imports leading to supply shortages of fuel, electricity, food, ink, paper, etc. causing political unrest in the country. Challenges faced by tourism-based economies are expected to recede with recommencement of international flights. However, Europes escalated geopolitical situation, lingering war and imposition of sanctions, elevated oil and commodity prices, prolonged supply chain disruptions and volatility in financial markets worldwide as well as political crises in the Indian subcontinent could impact trade within countries and impair economic growth across USA, Europe and Asia Pacific regions in the near term.

FY 2021-22 has been a year of strong recovery in the Indian travel and tourism industry.

While flight restrictions continued for most part of the year subduing international travel, demand was largely from pent-up domestic leisure travel, extended stays, wedding, social events and a partial resumption of business travel in the country.

Indian economy: The year in review

The Indian GDP grew during FY 2021-22 at 8.7% compared to a contraction of 6.6% in FY 2020-21 as per the Press Note dated May 31, 2022 of the National Statistical Office of the Government of India. Total Consumption grew by 7.0% in FY 2021-22 enabled by private spending. Exports of both goods and services have been exceptionally strong in FY 2021-22 growing by 24.3%. Imports also recovered strongly with recovery in domestic demand coupled with higher international commodity prices to grow by 35.5% in FY 2021-22. In terms of Gross Value Added (GVA), the agricultural sector was the least impacted compared to other industries and grew by 3% during FY 2021-22 after a growth of 3.3% in FY 2020-21. Trade, Hotels, Transport, Communication and Broadcasting related services, constituting about a third of overall services grew by 11.1%. The Indian real estate market, which has proven to be inflation-proof, has shown a significant revival in FY 2021-22. Indias balance of payments remained in surplus throughout the past two years which has enabled the Reserve Bank of India to maintain a strong position in foreign currency reserves above US$ 600 billion.

In its Monetary Policy Report of April 2022, the Reserve Bank of India (RBI) has projected real GDP to grow at 7.2% in FY 2022-23. Several high frequency indicators viz. railway freight, GST collections, electricity demand, import of capital goods, etc. have displayed robust growth during February and March 2022. There has been a significant rise in consumer optimism on the back of improved sentiments of the general economic situation. According to The Economist - May 14, 2022 edition, India is expected to be the fastest growing big economy in the world. While the economy has been looking up in the fourth quarter of FY 2021-22, escalating geopolitical tensions in the Black Sea region resulting in significant hardening of international crude oil and other commodity prices, the loss of momentum in global trade and risk of future waves of COVID-19 infections pose downside risks to the outlook for India in line with the global economy. Further, in May 2022 the RBI considered prevailing high inflationary conditions while raising interest rates by 40 basis points. (Source: Reserve Bank of India Monetary Policy Report - April 2022 and May 2022)

Industry insight

Global hospitality and tourism industry

Global tourism continued to be impacted in 2021 by repeated waves of the pandemic and consequent reintroduction of travel restrictions. International tourist arrivals across the world for 2021 were 421 Million, 4.6% over that of 2020 but lower by 71.3% compared to 2019 according to data from the United Nations World Tourism Organisation (UNWTO). In absolute numbers, international arrivals at destinations worldwide were still far less by a billion travellers in 2021 than the pre-pandemic levels of 2019. Asia and the Pacific registered an absolute decline in international arrivals in 2021 over 2020 by 64.7%. International tourist arrivals in South Asia were at 5.7 Million, lower by 42.9% from 2020 and 83.1% from 2019. In 2019, South Asia had 33.7 Million international tourist arrivals. Amongst other regions, international tourist arrivals in 2021 over 2020 to North America and Africa grew by 22.2% and 13.9% respectively while the Middle East declined by 8.3%. All these regions are trailing their pre-pandemic levels by large margins.

International tourist arrivals i.e. overnight visitors increased by 130% in January 2022, higher by 18 Million. Even though the increase in arrivals during January 2022 was the same as that for the entire 2021 over 2020, it was 67.1% lower than the pre-pandemic level of January 2019. South Asia recorded an increase of 135.3% in arrivals in January 2022 over the same month in 2021. The encouraging results were impacted by the Omicron variant of COVID-19 virus and re-introduction of travel restrictions across several countries. The ebbing of this wave of the virus gave way to the rising geopolitical stress in Europe and South Asia. (Source: UNWTO, Barometer March 2022)


The UNWTO expects international tourism to continue its recovery in 2022 gradually as more destinations ease or lift travel restrictions and pent-up demand is released. According to its report, 12 destinations had no COVID-19 related restrictions in place as of March 24, 2022. It expects domestic tourism to continue driving the recovery of the travel and tourism sector for an increasing number of destinations while international tourism bounces back. However, major downside risks threaten the ongoing recovery of tourism in 2022. These being the Russia- Ukraine war, pressure on consumer purchasing power and savings caused by high energy prices, inflation in commodity prices, monetary policy interventions by central banks and travel restrictions in many destinations due to the ongoing pandemic which could delay the recovery of international tourism.

The UNWTO scenarios published in January 2022 estimated a range of 30% to 78% growth in international tourist arrivals in 2022 over 2021 depending on various factors of health, policy, geopolitical and economic factors. However, after factoring this growth, the international tourist arrivals would still be at 50% to 63% below pre-pandemic levels. (Source: UNWTO, Barometer January 2022) Considering the aforesaid factors, global travel is not expected to return to pre-pandemic levels earlier than 2023.

Indian hospitality and tourism industry

FY 2021-22 has been a year of strong recovery in the Indian travel and tourism industry. While flight restrictions continued for most part of the year subduing international travel, demand was largely from pent-up domestic leisure travel, extended stays, wedding, social events and a partial resumption of business travel in the country. Total air passenger traffic within India for 2021 was 182 Million, higher than 2020 by 27% but lower than 2019 by 48%. Of this, 164 Million or 90% constituted domestic air passenger traffic. (HVS Anarock - India Hospitality Industry Overview 2021 and Airports Authority of India data). In contrast, foreign tourist arrivals were 1.41 Million for the calendar year 2021 in comparison with 2.74 Million in 2020 and 10.93 Million in 2019 (Government of India, Ministry of Tourism Annual Report - 2021-22).

As per Horwath HTL Market Report: India Hotel Market Review 2021, calendar year occupancy for 2021 was 43.5% in comparison with 32.0% in 2020 and 24.9% during the initial pandemic period of March to December 2020. The recovery from the second wave of COVID-19 was quicker and demand during the period July to September 2021 was particularly strong.

The 13 Indian destinations tracked by STR, a global hospitality data analytics firm, registered an occupancy of 50.0% in the fourth quarter of FY 2021-22 as against 46.1% in FY 2020-21 with a 39% improvement in RevPAR.

As shown in the chart below, occupancies of Goa, Kolkata, Ahmedabad and Chandigarh have nearly recovered to their pre-pandemic levels of 2019-20. Goa registered the highest occupancy at 63.3% while Mumbai registered the second highest occupancy at 62.6%. RevPAR of Goa and Chandigarh exceeded the pre-pandemic levels of 2019-20. Goas RevPAR at Rs 6,012 was the highest among the tracked destinations in the country.


Subsequent waves of the COVID-19 virus have resulted in a quicker V-shaped recovery of economic activity and mobility with comparatively lower disruption in livelihoods. This was also strengthened by higher vaccinated population, low-fatality-quick recovery rate of the Omicron variant and better healthcare preparedness in the country. These factors have resulted in higher consumer confidence which is expected to improve the prospects for travel and tourism within the country. While various State Governments have eased regional travel restrictions, the Government of India recently ended its COVID-19 containment measures under the Disaster Management Act and resumed regular international flights, thus paving the way for greater inflow of international tourist arrivals to India.

The Indian tourism industry achieved peak occupancies of ~90% without international inbound travel and with lower levels of business travel. With these segments beginning to rebound demand forecast is expected to be robust. Corporate business travel is more likely to resume for purposes of client acquisitions, relationship building, industry conferences, exhibitions and tradeshows. Increase in international travellers to leisure destinations as well as inbound travel for weddings, conferences and events along with pent-up demand among domestic travellers are expected to further increase occupancies. Increasing demand for rooms coupled with a favourable demand-supply equation in branded accommodations should progressively improve average room rates. This is substantiated by the business performance for April 2022 which was better than that of April 2019. The new normal is expected to bring with it new segments of customers and trusted, branded hotel chains would be in the best position to leverage such opportunities. The industry would continuously need to explore ancillary revenue streams to maximise revenue per square foot of real estate thereby protecting its revenue generating capabilities.

Finally, large scale development of infrastructure by the Government, including roads, railways, metro-railways, airports and ports will aid long term growth of tourism and hospitality sector in India. These investments, coupled with coordinated efforts of Government ministries along with the industry should provide major stimulus for growth of Indian travel and tourism going forward.

Review of the Business IHCL Portfolio

As on March 31, 2022, IHCL has a portfolio of 235 hotels, including 175 operational hotels, of which close to 80 hotels were signed in the past 4 years and 36 hotels were opened during the same period. Brand Finance, the worlds leading brand valuation consultancy, ranked the Companys flagship brand, Taj, as the Worlds Strongest Hotel Brand in 2021 in its Hotels 50 2021 report. Taj was also rated as Indias Strongest Brand across all sectors by Brand Finance in its Indian 100 report in 2020 and 2021, and the second strongest Indian brand in 2021.

IHCLs vision was set in February 2018 to be The Most Iconic and Profitable Hospitality Company in South Asia under its strategy Aspiration 2022. This was based on the three tenets of restructuring growth to develop a strong pipeline using an asset light model, re-imagining IHCLs brandscape and re-engineering margins contributed equally by revenue and cost initiatives while simplifying holdings, monetising non-core and hotel assets and reducing debt to strengthen the balance sheet. The Company made significant progress in executing its plans up to March 2020. The past two years of co-existing with the pandemic required the Company to improvise its strategy and innovatively retain its focus with agility to survive, revive and thrive, thus making itself resilient to the challenging economic and social environment while protecting the health of its customers and employees.

The Company implemented R.E.S.E.T 2020 - Revenue growth, Excellence, Spend optimisation, Effective asset management and Thrift and financial prudence.

RESET focused on multipronged tactical initiatives to maximise opportunities of revenue and in the process, lay the foundations for future revenue streams. It also maintained an astute attention on optimising expenditure by renegotiating operating supplies, reorganising people, reducing fixed operating costs and discretionary spends on repairs, selling, distribution, marketing and administration costs at hotels and the corporate office. IHCL continued its focus on service excellence by strengthening standards of safety and hygiene and introducing digitally enabled contactless processes. During this period, IHCL also ensured an effective management of its assets by leveraging opportunities of monetising non-core assets, selling and managing back hotel assets and renegotiating lease terms for longer term benefits. It prioritised renovations and maintained sufficient liquidity to meet its obligations. While doing so, IHCL continued its steadfast service to the nation by providing meals and rooms to the medical fraternity at subsidised cost during the period of the pandemic.

Some of the key initiatives that IHCL undertook during the year are given below:

Growth through expansion continued high on IHCLs agenda as it pursued its strategy of growing its portfolio and pioneering new destinations in India. Despite challenges posed by the pandemic during FY 2020-21, IHCL signed 17 hotels, opened 7 new hotels and opened 5 ama properties. During the current year, it continued its path of growth by signing 19 hotels and opening 13 new hotels and 27 ama properties. New hotels opened during FY 2021-22 included a 325 room, Taj Exotica Resort & Spa, The Palm, Dubai and Indias first all women-run luxury residences, Taj Wellington Mews, Chennai.

Innovative products and service offerings contributing to revenue growth through:

Ginger, now a portfolio of 85 hotels across 50 cities, including 28 under development. With its refurbished hotels and new openings under the Lean Luxe model the brand is well poised to harness the opportunities offered by a new normal. During the year, Ginger achieved close to 95% of its pre-pandemic business aided by a good recovery in accommodations, increased revenue from its new food and beverage outlets and increased fees from managed properties.

ama Stays & Trails, a homestay brand was preferred by families for exclusive and extended stays over conventional hotels. The demand for homestays has been greater since successive lifting of lockdown restrictions. IHCL opened 27 properties under ama Stays & Trails in the current year taking the portfolio to 80 bungalows including 47 bungalows in operation and 33 in the pipeline.

Qmin, IHCLs culinary and food delivery platform present in 20 cities delivering via Qmin app and has offline presence through Qmin Shops, Qmin QSR and Qmin food trucks.

The Chambers, Indias first exclusive business club with presence across eight landmark Taj hotels in India, Dubai, London and one in New York in the pipeline consolidated its member base.

TajSATS, Indias largest airline catering company and the leader in the Indian market has evolved to expand into the non-aviation culinary segment.

Funding, capital structure and simplification

During the year, the Company infused equity of Rs 3,981.97 Crore by issuing shares to existing shareholders on rights basis and to Qualified Institutional Buyers. The proceeds of these issues were utilised to repay debt and consolidate its strategic investments in order to simplify its holdings. During the year the Company achieved a net cash positive position, both on a standalone basis and for the Group. This has helped improve the capital structure of the Company and the strength of its balance sheet.

The Company executed its strategy of simplifying its holding structure by acquiring residual stakes in companies holding assets and businesses, namely the site for the Sea Rock Hotel, Roots Corporation Limited and Taj Cape Town, South Africa.

Strategic imperatives going forward

While IHCL resorted to R.E.S.E.T. 2020 to deal with the impact of the pandemic, several levers of growth and profitability were sharpened during this journey. With travel improving and tourism beginning to stabilise, IHCL aims to turn its focus on the following imperatives:

(i) Asset light growth: IHCL shall continue to sign new leases and management contracts and open hotels regularly to expand its presence. It shall incur capital expenditure selectively on priority projects such as continuing refurbishments and renovation at key hotels, construction of 371 keys Ginger in Mumbai, redesigning the banquet hall at The Pierre, New York and similar strategic projects. It shall continue to pursue inorganic and organic growth strategies, leverage its strategic partnerships with financial investors, cultivate and grow owner-partner relationships.

(ii) Revenue recovery and enhancement: IHCL aims to enhance its market share and strive towards widening the premium of its rates over its competitive set and grow its management fee income. Powered by established brands, viz. "Taj", "SeleQtions" and "Vivanta" and supported by emerging and re-imagined brands, IHCL aims to innovate with customer-centric products and campaigns and leverage its partnership with Tata Neu App to strengthen its customer loyalty programme.

(iii) New brands and businesses: A re-imagined Ginger brand along with a lean luxe model holds out a strong growth potential as demand in the mid-scale segment increases. IHCL aims to capitalise on this demand by expanding its presence in high-growth markets with leases and management contracts under the Ginger brand. The Company also aims to establish and scale up new businesses developed under the brands of Qmin and ama Stays and Trails and enhance the member base of the re-imagined Chambers.

These revenue streams are expected to complement the Companys mainstream revenue and enhance its profitability.

(iv) Reshaping the financials: On the revenue side,

IHCLs focus is on building significant income streams through management fees from asset light expansions, re-imagined brands and new businesses thereby contributing to higher margins. On the cost side, the Company aims to optimise its operating model with a continued focus on manpower rationalisation through newer ways of working, redeployments and reskilling its employees as well as optimising operating and fixed costs at hotels. It seeks to retain corporate overheads at an optimal level by applying prudence in allocating resources, restructuring and exploring synergies.

IHCL remains focussed on restructuring the balance sheet by managing assets, monetising non-core assets and maintaining a healthy capital structure. It shall continue its unwavering focus on profitability and healthy returns on capital employed armed with a strong balance sheet to realise future growth.


IHCL deploys a robust internal check process to prevent and limit the risk of non-compliance. The Company approaches compliance from a proactive standpoint and believes in responsive intervention. Compliance with laws and regulations is an essential part of its business operations and it adheres to all national and regional laws and regulations in such diverse areas as product safety, product claims, trademark, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Nevertheless, it is focussing on increasing awareness, documentation and supplementing the expertise of internal professionals with that of independent consultants, as may be required from time to time.

Internal control systems and their adequacy

The Company has institutionalised an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units. Internal controls provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The internal audit process (Taj Positive Assurance Model), based on the audits of operating units and corporate functions, provide positive assurance. It converges the process framework, risk and control matrix and a scoring matrix, covering all critical and important functions inter alia revenue management, hotel operations, purchase, finance, human resources and safety. A framework for each functional area is identified based on risk assessment and control, while allowing the unit to identify and mitigate high-risk areas. These policies and procedures are updated periodically and monitored by the Group Internal Audit.

The Company aligns all its processes and controls with best practices.

Internal controls are reviewed through the annual internal audit process, which is undertaken for every operational unit and all major corporate functions under the direction of the Group Internal Audit. These reviews focus on:

• Identification of weaknesses and improvement areas

• Compliance with defined policies and processes

• Compliance with applicable statutes

• Safeguarding tangible and intangible assets

• Managing risk environment, including operational, financial, social and regulatory risks

• Conformity with the Tata Code of Conduct

The Boards Audit Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings and by monitoring implementation of internal audit recommendations through compliance reports. The statutory auditors have opined in their report that there are adequate internal controls over financial reporting at IHCL.

Management Discussion and Analysis of Operating Results and Financial Positions

The Annual Report contains financial statements of the Company, both on a standalone and consolidated basis. An analysis of the financial affairs is discussed below under summarised headings.

Results of Operations for the year ended March 31, 2022 Standalone Financial Results

The following table sets forth financial information for the Company for the year ended March 31, 2022

(Rs Crore)


Year ended

March 31, 2022 March 31, 2021
Revenue from Operations 2,003.34 1,133.15
Other Income 149.08 110.52
Total Income 2,152.42 1,243.67
Food and Beverages Consumed 172.99 107.93
Employee benefit expenses and payment to contractors 624.48 538.64
Depreciation and Amortisation Expense 203.03 203.81
Other operating and general expenses 817.60 583.48
Total Expenditure 1,818.10 1,433.86
Profit/(Loss) Before Finance Costs and Tax 334.32 (190.19)
Finance Costs 304.50 294.79
Profit/(Loss) Before Exceptional Items and Tax 29.82 (484.98)
Exceptional Items (56.93) (155.30)
Profit/(Loss) Before Tax (27.11) (640.28)
Tax Expense/(Benefit) 7.34 (115.50)
Profit/(Loss) After Tax (34.45) (524.78)

An analysis of major items of financial statements are given below: a) Income

The summary of total income is provided in the table below:

(Rs Crore)


Year ended

% Change

March 31, 2022 March 31, 2021
Room Income 848.19 471.55 80
Food, Beverage & Banqueting Income 714.47 401.80 78
Other Operating Income 242.03 169.32 43
Management & Reimbursable fees 198.65 90.48 120
Non-operating Income 149.08 110.52 35
Total Income 2,152.42 1,243.67 73
Statistical information
Average rate per room (Rs) 9,717 7,351 32
Occupancy (%) 53 39 14% points

i) Room income for the year was higher by 80% from the previous year with an average occupancy at 53% and an average rate per room (ARR) of Rs 9,717. The Company saw a gradual rise in occupancies immediately after the second wave of the pandemic in the second and third quarters of the year. Occupancies rose from a low of 19% in May 2021 to a high of 69% in December

2021. Thereafter, occupancy dropped to 40% as a result of the Omicron variant in January 2022 and rose sharply to finish the year at 72% in March

2022. ARR across the Companys hotels remained healthy and peaked with peak occupancies during the year. The Company continued its strategy to pursue revenue growth from 4D drivable distance vacations, Taj Holidays, Urban Gateways, Desh Dheko, weddings, Qmin and other promotional campaigns on the back of a general sense of confidence amongst domestic leisure travellers. Room income for FY 2021-22 was approximately at 75% of FY 2019-20 levels.

ii) Food and beverage income for the year was higher by 78% from the previous year. Business from banqueting grew by more than twice over the previous year while the restaurant business grew by approximately half of that in the previous year. Food and beverage revenue was at 65% of the pre-pandemic level. Resident guests continued to contribute predominantly to restaurant business given the resurgent waves and capacity constraints in force for most of the year. Total covers were the lowest in the first quarter of the year, a period of the second wave of the pandemic and rose steadily through the months to December 2021. Covers dropped again in January 2022 when the Omicron variant surfaced but rose quickly through February and March 2022. F&B price realisations improved over the previous year.

iii) Other Operating Income primarily comprises income from membership fees, rentals, spa and health club, laundry, transportation, telephone and business centre rents among others. Other operating income increased by 43% over the previous year with increase in Chamber initiation fees for new members, Chamber membership fees for continuing members, transportation income, spa, salon and other accommodation dependent income due to improvement

in occupancies.

iv) Management and reimbursable fees at Rs 198.65 Crore was higher by 120% compared to the previous year. The increase in management fees and reimbursable fees was mainly due to an increase in the business activity levels of managed properties in the portfolio and new managed properties commencing operations.

v) Non-Operating Income increased by Rs 38.56 Crore from Rs 110.52 Crore to Rs 149.08 Crore. During the current year, interest earned by the Company on income tax refunds increased by Rs 50.91 Crore and profit on disposal of property, plant and equipment increased by Rs 5.82 Crore. Offsetting this was the previous years gain on fair valuation of a financial liability for acquisition of shares in a company Rs 23.06 Crore.

b) Expenditure

Total expenses increased from Rs 1,433.86 Crore to Rs 1,818.10 Crore during the current year. The Company continued its path towards revival to consolidate its position after having responded with agility to the unprecedented situation caused by COVID-19 in the previous year. While Total Income increased by 73%, Total Expenditure increased by 27% mainly due to increase in variable costs consequent to increased business activity and optimisation of fixed costs to sustainable levels. Details of interventions under each expenditure head is explained below:

i) Food and Beverages Consumed

March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Food and beverages consumed 172.99 107.93 (60)
% To Food, Beverage & Banqueting Income 24 27 3% points

Food and beverages consumed, which is variable in nature, increased with increase in income from food, beverages and banqueting business. While food and beverages income increased by 78% from the previous year, food and beverages consumed as a percentage of food and beverage income was lower at 24% as against 27% in the previous year.

ii) Employee Benefit Expenses and Payment to Contractors

March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Employee benefit expenses and payment to contractors 624.48 538.64 (16)

Employee benefit expenses and payments to contractors increased by 16% from Rs 538.64 Crore in the previous year to Rs 624.48 Crore in the current year. This was mainly due to an increase in employee costs commensurate with increase in business activities, discontinuation of voluntary salary reductions, consequent increase in contribution to retiral funds and variable pay. During this period, the Company continued its emphasis on rationalisation of manpower through redeployment of people to newly opened hotels, multi-skilling, clustering and shared service approaches thereby optimising "staff to room ratios" across its brands.

iii) Depreciation and Amortisation Expenses

March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Depreciation and amortisation expenses 203.03 203.81 n/m*

* n/m represents change percentages which are too high or too low

Depreciation and amortisation costs for the year were at the same levels of the previous year. iv) Other Expenditure

March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Other Operating Expenses 447.72 297.35 (51)
General expenses 369.88 286.13 (29)
Total 817.60 583.48 (40)

Other Expenditure increased by 40% from Rs 583.48 Crore to Rs 817.60 Crore in the current year.

Other operating expenses increased from Rs 297.35 Crore in the previous year to Rs 447.72 Crore, an increase of Rs 150.37 Crore. This was primarily due to increase in variable costs corresponding to higher business volumes. This was reflected in power costs, maintenance, linen and room supplies, transportation, distribution costs in terms of commissions to travel agencies, credit card charges and costs of hosting banqueting events.

General expenses increased from Rs 286.13 Crore in the previous year to Rs 369.88 Crore, an increase of Rs 83.75 Crore. Primary reasons for such increases were increase in variable lease costs linked to turnover of leased properties, withdrawal of waivers of property taxes and licence fees during the year, higher rent for office premises and writing off income accrued in past years on unutilised export incentives, withdrawn by the Government. The Company also engaged in selectively increasing its advertising and promotion activities from a judicious increase in spends on campaigns relevant to consumer sentiment and emerging and reimagined products.

c) Finance Costs
March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Finance Costs 304.50 294.79 (3)

Finance Costs for the current year at Rs 304.50 Crore were higher than the preceding year by Rs 9.71 Crore or 3%, mainly due to interest on income tax demands and other payments. Interest on borrowings during the year were in line with the previous year.

d) Exceptional Items

Exceptional Items includes items as under:

(Rs Crore)

Year ended

Particulars March 31, 2022 March 31, 2021
Change in fair value of Derivative Contracts 6.29 25.00
Provision for impairment of investment in subsidiaries that incurred losses (63.22) (179.52)
Provision for impairment of investment in a Joint Venture - (0.78)
Total (56.93) (155.30)

Exceptional items for the current year mainly comprised of a provision for operating losses of foreign subsidiaries which was lower than the previous year.

e) Tax Expense

Tax expense for the year was at Rs 7.34 Crore as against a tax benefit of Rs 115.50 Crore. This was mainly due to decrease in the loss before tax for the year.

f) Profit/(Loss) after Tax

During the current year, the Company incurred a loss after accounting for tax benefits of Rs 34.45 Crore compared to Rs 524.78 Crore in the previous year. This was due to a significant improvement in the operating revenues of the Company and cost containment measures continued by the Company during the year.

g) Gross Debt, Net Debt and Liquidity

March 31, 2022 March 31, 2021 Change
(Rs Crore) (Rs Crore) (%)
Gross Debt 942.53 2,587.25 64
Less: Cash and cash equivalents* 1,004.01 38.42 n/m
Less: Current Investments 896.84 374.39 140
Net Debt/(Net Cash) (958.32) 2,174.44 144

* Includes balances greater than 3 months not earmarked or pledged n/m represents change percentages which are too high or too low

During the year, gross debt decreased by Rs 1,644.72 Crore from Rs 2,587.25 Crore to Rs 942.53 Crore. The Company issued fresh equity shares aggregating to Rs 3,981.97 Crore in two tranches i.e. Rs 1,981.97 Crore to existing shareholders on rights basis and Rs 2,000.00 Crore to Qualified Institutional Buyers. The proceeds from the issue, net of issue expenses, were utilised mainly for repayment of debt and investment in subsidiaries as per the objects of the issues. The unutilised balance of Rs 1,565.45 Crore has been temporarily invested in deposits with banks and shortterm investments.

The Company maintained adequate liquidity during the year to meet its financial obligations and commitments. The Company met all its interest and principal repayment obligations in a timely manner during the year. At the end of the year, the liquidity position represented by cash, cash equivalents and current investments increased by Rs 1,488.04 Crore over the previous year to Rs 1,900.85 Crore. Resultantly, net debt decreased from Rs 2,174.44 Crore to a net cash position of Rs 958.32 Crore.

Cash Flow

(Rs Crore)

Year ended

Particulars March 31, 2022 March 31, 2021
Net Cash from/(used for) operating activities 693.33 (53.21)
Net Cash from/(used for) investing activities (1,890.37) (383.60)
Net Cash from/(used for) financing activities 1,804.00 338.66
Net Increase/(Decrease) in cash and cash equivalents 606.96 (98.15)

Operating Activities

Net cash generated from operating activities during the year was Rs 693.33 Crore as compared to net cash used for operating activities in the previous year of Rs 53.21 Crore. This was mainly attributable to the improvement in cash operating profit by Rs 486.81 Crore due to increase in revenues and cash generated from an improved working capital position of the Company during the year.

Investing Activities

During the year, net cash used for investing activities amounted to Rs 1,890.37 Crore, compared to Rs 383.60 Crore in the previous year. The Companys outlay on capital expenditure was Rs 141.26 Crore, which was mainly for Taj Mahal Delhi, the Companys large-format Ginger hotel in Mumbai and critical ongoing renovations. During the year, the Company had a net outflow of Rs 873.88 Crore into liquid investments and deposits with banks. The Company also invested an amount of Rs 877.58 Crore in its subsidiaries to consolidate its holdings, incubate new projects and to fund its hotel operations in United States. Further, the Company continued to monetise certain non-core assets of Rs 32.42 Crore while interest and dividend received amounted to Rs 14.00 Crore.

Financing Activities

During the year, net cash generated from financing activities was Rs 1,804.00 Crore as against Rs 338.66 Crore in the previous year. Financing activities comprised of Rs 3,981.97 Crore from a fresh issue of equity shares, the issue expenses for which were Rs 28.34 Crore. The Company repaid outstanding borrowings of Rs 1,651.00 Crore, net of proceeds from fresh borrowings during the year. The Company also paid dividend of Rs 47.37 Crore, interest and borrowing costs of Rs 223.47 Crore, settled a cross currency interest rate swap of Rs 146.33 Crore and paid lease liabilities of Rs 81.46 Crore during the year.

Key Financial Ratios for Standalone Financials

Key financial ratios and their definitions are given in Note 47 of the Notes to Standalone Financial Statements. Some important ratios are reproduced below


Year ended

March 31, 2022 March 31, 2021
Current ratio (in times) 2.48 0.80
Debt - Equity ratio (in times) 0.12 0.61
Trade receivables turnover ratio (in days) 38 72
Net profit margin (in %) (1.60) (42.20)
Return on capital employed (in %) 3.70 (2.50)
Return on equity (in %) (0.56) (11.94)

During the year, the Company increased its capital by issuing fresh equity shares. These funds were used to repay borrowings and consolidate the Companys holdings in its subsidiaries. As a result, the Companys capital structure further strengthened as is evident from its ratios of Debt-Equity at 0.12 times and Current ratio at 2.48 times. Growth in revenue from operations and operating profits improved the Net Profit Margin, Return on Capital Employed and Return on Equity in comparison with the previous year. Debtors Turnover ratio decreased substantially from 72 days in the previous year to 38 days, even while

revenue from operations increased due to higher collection efficiency.

Consolidated Financials

The Consolidated Financial Statements comprise the Company and its subsidiaries (referred collectively as the Group) and the Groups interest in associates and joint ventures prepared in accordance with Ind AS, as applicable to the Company. The Consolidated Statements include the financial position of subsidiaries on a line-by-line basis and for joint ventures and associates by applying equity method of accounting.

Consolidated Results

The following table sets forth the Consolidated Financial results for year ended March 31, 2022.

(Rs Crore)

Year ended

Particuars 1 March 31, 2022 March 31, 2021
Revenue from Operations 3,056.22 1,575.16
Other Income 155.16 164.72
Total Income 3,211.38 1,739.88
Food and Beverages Consumed 257.23 143.82
Employee Benefits Expenses 1,150.24 894.01
Depreciation and Amortisation Expense 406.05 409.63
Other Expenditure 1,244.00 899.09
Total Expenditure 3,057.52 2,346.55
Profit/(Loss) before Finance Costs and Tax 153.86 (606.67)
Finance Costs 427.66 402.82
Profit/(Loss) before Tax, Exceptional Items and share of profit of equity accounted investees (273.80) (1,009.49)
Exceptional Items 15.62 159.95
Profit/(Loss) before Tax, before share of profit of equity accounted investees and Non-Controlling interests (258.18) (849.54)
Tax Expense/(benefit) (35.78) (155.33)
Profit/(Loss) after Tax, before share of profit of equity accounted investees and Non-Controlling interests (222.40) (694.21)

(Rs Crore)


Year ended

March 31, 2022 March 31, 2021
Add: Share of Profit/(Loss) of Associates and Joint Ventures (net of tax) (42.57) (101.42)
Profit/(Loss) for the year (264.97) (795.63)
Less: Non-Controlling interest in Subsidiaries (17.25) (75.52)
Profit/(Loss) after Tax attributable to Owners of the Company (247.72) (720.11)


Revenue from operations increased by 94% from Rs 1,575.16 Crore to Rs 3,056.22 Crore. All subsidiaries of the Group registered good growth in business as state and federal governments across the globe relaxed lockdowns and heightened awareness, while personal precautions and increased vaccinations propelled travel across domestic circuits and international travel bubbles. Key markets in USA, UK, Maldives and India contributed to improving revenues and margins for the Group. The Group also earned higher fees from managed properties and membership fees with improving business prospects. Other Income decreased by Rs 9.56 Crore from Rs 164.72 Crore in the previous year to Rs 155.16 Crore. The Group earned a higher interest on income tax refunds and profit on disposal of non-core assets. Offsetting this in the previous year was a gain on fair valuation of a financial liability for acquisition of shares in a company and exchange gain on restatement of a foreign exchange borrowing. The Group managed to register a Total Income at 70% of the pre-pandemic levels of FY 2019-20.


Total Expenditure increased by Rs 710.97 Crore to Rs 3,057.52 Crore from Rs 2,346.55 Crore. The increase in expenditure was in line with the increase in business activity across the Group. Total Expenditure excluding depreciation for FY 2021-22 was lower by 24% in comparison with FY 2019-20. The Group continued to optimise costs including redeploying headcount amongst new hotels and businesses with the Tata Group and took advantage of packages announced by governments from time to time. The policies of the Government of United Kingdom supported the Companys hotel in London in terms of a business rates (council tax) holiday. The Companys subsidiary in the USA benefited from re-negotiated lease rent concessions and savings in licence fee on surrender a certain leased premise at its New York hotel.

Finance Costs

Finance Costs, including interest on lease liabilities for the year ended March 31, 2022, at Rs 427.66 Crore was higher than the previous year by Rs 24.84 Crore due to increased funding adopted by Group companies to improve liquidity and other charges, including interest on income tax demands.

Exceptional Items

Exceptional Items include the following:


(Rs Crore)

Year ended

Particulars March 31, 2022 March 31, 2021
Change in fair value of derivative contracts 6.29 25.00
Profit on sale of hotel property in a subsidiary 7.12 23.80
Exchange gain on long term borrowings/assets (net) 2.21 29.12
Gain arising from acquiring controlling stake in a Joint Venture - 82.03
Total 15.62 159.95

Profit/(Loss) after Tax attributable to Owners of the Company

Loss after tax, non-controlling interest and share of profit of equity accounted investees for the year was Rs247.72 Crore as compared to Rs720.11 Crore in the previous year. The Group pursued cost containment strategies even while revenue from operations improved thereby showing a significant improvement in the post-tax losses.

Consolidated Cash Flow

The following table sets forth selected items from the consolidated cash flow statements:

(Rs Crore)

Year ended

Particulars March 31, 2022 March 31, 2021
Net Cash from/(used in) operating activities 671.63 (318.69)
Net Cash from/(used) in investing activities (1,642.47) (119.66)
Net Cash from/(used) in financing activities 1,658.78 280.37
Net lncrease/(Decrease) in cash and cash equivalents 687.94 (157.98)

Operating Activities

Net cash generated from operating activities for the current year was Rs671.63 Crore as against Rs318.69 Crore used in the previous year. The increase in cash from operating activities was mainly due to improvement in business of the Group and working capital position.

Investing Activities

Cash used for investing activities was Rs1,642.47 Crore in the current year. During the year, the Group utilised cash for planned critical project expenditures. Unutilised amounts from the proceeds of the equity issue were temporarily invested in current investments and short-term bank deposits.

Financing Activities

Financing activities across the Group was Rs1,658.78 Crore for the year mainly from its equity issue. The Group repaid borrowings from the proceeds of the equity issue. During the year, the Group serviced its debt in a timely manner.

Key Financial Ratios for Consolidated Financials

Key financial ratios for the Consolidated Financial Statements are given below. The definitions of the ratios are the same as given in Note 47 of the Notes to the Standalone Financial Statements.

Year ended

Particulars March 31, 2022 March 31, 2021
Current ratio (in times) 1.87 0.65
Debt - Equity ratio (in times) 0.26 0.85
Trade receivables turnover ratio (in days) 21 59
Net profit margin (in %) (6.93) (39.90)
Return on capital employed (in %) 1.43 (6.19)
Return on equity (in %) (4.44) (16.92)