Indian Hotels Co Ltd Management Discussions

Management Discussion and Analysis

Economic Environment and Industry Insight

Global Economy: The Year in Review

According to the International Monetary Funds World Economic Outlook (April 2025), global GDP is estimated to have grown by 3.3% in 2024. Despite tight monetary conditions and geopolitical uncertainty, 2024 surprised on the upside.

In advanced economies, labour markets remained tight, real wages recovered, and services demand supported output. Meanwhile, emerging and developing economies continued to be engines of global growth. Though challenges persisted such as lingering inflation and diverging national conditions, the year marked a turning point from crisis management to recovery and rebalancing. The United States emerged as a growth leader among advanced economies, registering a projected 2.8% expansion, supported by strong consumer spending and business investment. Emerging markets, particularly India (6.5%) and China (5.0%), remained key drivers of global momentum.

A major bright spot has been the easing of inflationary pressures globally. The combination of tighter monetary policy, lower energy prices, and stabilising food supplies contributed to this welcome trend. In advanced economies, headline inflation is projected to decline from 4.6% in 2023 to 2.6% in 2024. In emerging markets, inflation moderation has been more uneven but improving nonetheless from 8.0% in 2023 to 7.7% in 2024. Inflation in advanced economies is projected to stabilise around 2.5% in 2025, while emerging markets and developing economies are expected to see a decrease in inflation to 5.5% However, core inflation, especially in services, remains sticky in several countries, keeping central banks cautious.

Real GDP, Y-0-Y% Change

	Actual	Estimate	Projection	Projection
	2023	2024	2025	2026
World Output	3.5	3.3	2.8	3.0
Advanced Economies	1.7	1.8	1.4	1.5
United States of America (US)	2.9	2.8	1.8	1.7
United Kingdom (UK)	0.1	1.1	1.1	1.4
Emerging Market and Developing Economies	4.7	4.3	3.7	3.9
Emerging and Developing Asia	6.1	5.3	4.5	4.6
India	9.2	6.5	6.2	6.3
China	5.4	5.0	4.0	4.0
Emerging and Developing Europe	3.6	3.4	2.1	2.1
Sub-Saharan Africa	3.6	4.0	3.8	4.2
Middle East and Central Asia	2.2	2.4	3.0	3.5

Source: IMF World Economic Outlook, April 2025. Year refers to calendar year, except for India, which is presented on a fiscal year basis.

The global economic outlook for 2025 is marked by cautious optimism amid persistent uncertainties. The International Monetary Fund (IMF) projects a slowdown in global growth to 2.8%, followed by a recovery to 3.0% in 2026. Advanced economies are expected to experience a decline in growth to 1.4%, with the United States projected to grow at 1.8%. Emerging markets and developing economies are forecasted to grow by 3.7%, driven by continued strong performances from China and India. However, trade policy uncertainty remains elevated, impacting global trade flows and economic sentiment. Governments are likely to tighten fiscal policies, and central banks may continue to adjust interest rates to manage inflation and support economic growth.

Indian Economy:

The Year in Review

India remained among the fastest-growing major economies globally, retaining its position as the worlds fifth-largest economy in nominal GDP terms and the third largest in purchasing power parity (PPP). As per the Second Advance Estimates of National Income released by the National Statistical Office (NSO) in February 2025, Indias real GDP is projected to grow by 6.5% in FY 2024-25 as compared to 9.2% in FY 2023-24. This growth is supported by strong momentum in industry and construction with an estimated growth rate of 8.6% resulting from an infrastructure-led growth strategy. Services is expected to grow by 7.3% led by the Financial, Real Estate and Professional Services sector estimated to grow by 7.2% and Trade, Hotels, Transport, Communication and Services Related to Broadcasting sector expected to grow by 6.4%. Other sectors of agriculture is estimated to grow by 4.6% while manufacturing is expected to grow by 4.3% (Source: NSO Second Advance Estimates, February 2025).

Private consumption (Private Final Consumption Expenditure-PFCE) constituting 56.7% of GDP, grew by 7.6% during the year, recovering from the moderation seen in the previous year. Gross Fixed Capital Formation (GFCF), at 33.4% of GDP, witnessed a robust growth of 6.1%, reflecting sustained public capex and a gradual crowding-in of private investments. On the external front, exports grew by 7.1%, while imports saw a marginal decline of 1.1%, indicating stabilising trade conditions.

Inflation conditions eased in FY 2024-25 As of February 2025, inflation for FY2024-25 averaged 4.7% compared to 5.4% during the same period in FY 2023-24. Core inflation fell to a four-year low of 3.5%, supported by subdued input costs and prudent monetary policy (Source: DEA Monthly Economic Review, February 2025).

During CY 2023-24, the rate of unemployment declined to 4.9% (2023:5.0%) while the labour force participation rate remained nearly unchanged, with a marginal decline from 59.8% to 59.6% (Source: Govt, of India - Dept, of Economic Periodic Labour Force survey 2024).

Indias external fundamentals remained resilient, with foreign exchange reserves standing at $645 billion as of March 7, 2025. Indias current account deficit (CAD) remained stable at 1.1% of GDP in Q3 FY 2025 in comparison to Q3 FY 2024, but moderated from 1.8% of GDP in Q2 FY 2025.

Outlook for FY 2025-26

Indias economic outlook for FY 2025-26 remains optimistic, underpinned by strong domestic fundamentals and supportive policy frameworks. The Reserve Bank of India (RBI), in its April 2025 Monetary Policy Statement, projects real GDP growth at 6.5% for FY 2025-26. Manufacturing activity is expected to retain its momentum, bolstered by global demand recovery, the Production-linked Incentive (PLI) schemes, and a conducive investment environment. Services are expected to grow above trend, supported by sustained demand in contact-intensive segments and digital services exports.

A normal monsoon forecast is likely to aid agriculture and rural consumption. Urban consumption is expected to benefit from improving disposable incomes and stable inflation.

Bank credit growth, which expanded by over 11% y-o-y as of March 2025, is expected to remain healthy, supported by sound bank balance sheets and rising investment appetite.

The governments continued focus on infrastructure, clean energy transition and digital public infrastructure is poised to drive medium-term growth. However, risks remain from global trade owing to rising protectionist measures, persistent geopolitical tensions, rising supply chain pressures, and volatile global financial conditions.

Overall, Indias macroeconomic fundamentals remain robust, with a favourable outlook for investment, consumption, and employment in the coming fiscal year.

(Source: RBI Monetary Policy Statement, April 2025)

Industry Insight

Global Hospitality and Tourism Industry

The global tourism industry continued its strong resurgence in 2024, nearly achieving full recovery from the pandemics impact. Results were driven by strong post-pandemic demand, robust performance from large source markets and the ongoing recovery of destinations in Asia and the Pacific. As per UNWTO Barometer January 2025, international tourist arrivals are estimated to have reached 1.4 billion in 2024, marking an 11% growth over 2023 and 99% of pre-pandemic levels. Europe remained the most visited region with a 52% share, surpassing 747 million international arrivals, a 5% increase vis-a-vis 2023, and slightly exceeding its 2019 benchmark, while the Americas registered 214 million travellers, a 7% increase vis-a-vis 2023, and reached 97% of pre-pandemic levels. The Middle East registered 1% growth over the previous year, however, surpassing 2019 arrivals by 32%, while Africa also outperformed pre-pandemic levels by 7% and 12% had a increase vis-a-vis 2023.

The Asia-Pacific (APAC) region made significant strides toward recovery, recording 316 million international arrivals with an overall share increase to 22% in 2024 as against 18% in 2023. While still lagging behind 2019 numbers at 87% recovery, the regions growth on y-o-y basis was steepest at 33% accelerated by a revival in key markets.

Total export revenues from tourism (including passenger transport) are estimated at a record USD 1.9 trillion in 2024, about 3% higher than before the pandemic and 4% more than in 2019 (real terms).

International Tourist Arrivals by Region

	Share %	International arrivals (million)
Region	2024	2024	2023	2019	Change % 2024/2023	% Level achieved 2024 vs 2019
World	100.0	1,445	1,305	1,465	n%	99%
Europe	51.7	747	708	742	5%	100%
Asia and the Pacific	21.9	316	238	363	33%	87%
Americas	14.7	214	200	219	7%	97%
Middle East	6.6	95	94	72	1%	132%
Africa	5.1	74	66	69	12%	107%

(Source: UNWTO, Barometer January 2025)

Outlook

The global tourism and hospitality sector is poised for continued growth in 2025, following a full recovery from the pandemic in the previous year. According to the United Nations World Tourism Organisation (UNWTO), international tourist arrivals are projected to increase by 3% to 5% compared to 2024, indicating a normalisation of growth following the sharp post-pandemic rebound. Confidence within the industry remains high-UNWTOs January 2025 Confidence Index reports that 64% of surveyed travel professionals anticipate stronger performance this year than in 2024. This optimism is underpinned by key enablers such as enhanced air connectivity and the simplification of visa processes, both of which are expected to further support the sectors expansion (Source: UNWTO, World Tourism Barometer, January 2025).

The World Travel & Tourism Council (WTTC) forecasts that 2025 will be a landmark year for the industry. The sectors global economic contribution is expected to reach a record- breaking $11.7 trillion-up from $10.9 trillion in 2023 and $10.3 trillion in 2019. This represents a 6.7% increase over the previous year and a 13% rise compared to pre-pandemic levels. Moreover, travel and tourism are set to support 371 million jobs globally in 2025, surpassing employment levels seen before the pandemic.

However the industry continues to face external risks, including trade tensions and geopolitical instability, which may influence traveller behaviour and discretionary spend potentials. Travellers are expected to prioritise value-driven options and intra-regional trips. According to CBREs 2025 Global Hotel Outlook, the Asia-Pacific region is set to experience modest revenue per available room (RevPAR) growth, fuelled by rising wealth and demand that is outpacing relatively slow new supply.

Indian Hospitality and Tourism Industry

FY 2024-25: A New Milestone for Indian Tourism

FY 2024-25 marked another landmark year for Indian tourism, driven by strong fundamentals such as a youthful population, rising employment, growing disposable incomes, and solid domestic demand. Improved infrastructure, greater connectivity, and increased investments have further accelerated the sectors momentum. The Union Budget 2025-26 allocated Rs.2,541 crore ($291 million) for the tourism sector, with a focus on infrastructure upgrades, skill development, and easing travel. Key initiatives include the development of 50 leading tourist destinations, improved transport connectivity, and expanding the e-visa programme. As of December 2024, e-visas are available to citizens from 167 countries under 9 categories-making travel to India simpler and more accessible.

The Ministry of Tourism advanced its flagship schemes such as Swadesh Darshan, PRASHAD, UDAN, and Dekho Apna Desh, encouraging regional and cultural tourism. Under PRASHAD, 27 new sites across 18 states and UTs were selected for development, with a continued emphasis on spiritual and heritage tourism. States have also introduced their own policies and incentives to promote local travel and boost their tourism economies.

This year also saw major strides in airport infrastructure, with 10 new greenfield airports becoming operational bringing the total count to 159 by the end of December 2024. Large- scale projects at Noida (Jewar) and Navi Mumbai are nearing completion and are set to open in 2025.

Foreign tourist arrivals reached 9.7 million in 2024 as against 9.23 million in 2023. This years arrival denoted a recovery of 88% of the 2019 high of 10.9 million, signalling steady progress toward full recovery. Outbound travel, on the other hand, surged ahead, with 30.2 million Indians travelling abroad in 2024-12% above pre-COVID levels. Domestic air travel remained strong, growing by 6% to 161 million passengers and surpassing 2019 figures by 12%. Key demand drivers included leisure travel, weddings, business events, and corporate travel.

According to the India Hotel Market Review 2024 by Horwath HTL, national occupancy stood at 63.9% for 2024 as compared to 62.1% in 2023. While the occupancy is still marginally below the 2019 level of 64.5%, Revenue per day was 82% higher than 2019 indicating market growth both in terms of capacity and size. The average daily rate (ADR) rose to Rs.7,951, marking a 7.5% y-o-y increase and revenue per available room (RevPAR) rose to Rs.5,078, marking 10.7% year on year increase. Udaipur reported highest ADR followed by Mumbai and then by Goa and New Delhi highlighting the continued demand for premium destinations.

All-India Performance Summary

Year	Occupancy %	ADR Rs.	Rev PAR Rs.
2024	63.9	7,951	5,078
2023	62.1	7,391	4,586
2022	58.6	6,053	3,548
2021	43.1	4,448	1,917
2019	64.5	5,684	3,664

(Source: STR and Horwath HTLs India Hotel Market Review 2024)

According to Horwath HTLs India Hotel Market Review 2024, around 14,400 rooms across 169 hotels were added in 2024, taking the total supply of branded hotel rooms to approximately 2,00,000. Notably, over two-thirds of these additions were in emerging destinations beyond the top 10 markets, indicating growing depth and diversification in Indias hospitality landscape.

Outlook

The Indian hotel industry enters 2025 on a strong footing, supported by sustained domestic travel, infrastructure upgrades, and rising interest from international markets. Continued economic growth, rising disposable incomes, and evolving travel aspirations especially among millennials and Gen Z are fuelling demand for both leisure and business stays. The sector is witnessing increased traction in tier-2 and tier-3 cities, driven by improved air connectivity, the rise of hybrid work models, and state-level initiatives promoting tourism circuits. The continued advent of spiritual tourism, weddings in India, and strong M.I.C.E activity (Meetings, Incentives, Conferences and Exhibitions) surrounding large state of the art conventions centres are providing a strong impetus to growth.

According to industry estimates, demand for branded hotel rooms in India is expected to continue outpacing supply growth which remains moderate. As per Horwath HTL, the industry has a pipeline of 1,05,000 branded rooms expected by 2029 subject to some slippages. This trend reflects a positive outlook for the industry, fuelled by rising tourism, business travel, and infrastructure improvements. Indias hospitality industry presents a significant potential for market penetration with just 0.1 branded room inventory per 1,000 people.

While heightened trade tensions and global geopolitical risks weigh strongly on the economy, the governments continued support through tourism-friendly policies, infrastructure spending, and ease-of-travel initiatives are expected to keep the sector on a stable growth trajectory. Backed by robust fundamentals, favourable supply-demand dynamics, and a maturing hospitality ecosystem, the Indian hotel industry is well-positioned for a strong and sustainable performance in 2025 and beyond.

A balanced portfolio of owned, leased and managed properties; iconic brands; and a robust, well-diversified topline gives IHCL the competitive advantage to lead markets and expand its business. A strong balance sheet and free cash flow strengthen its financial position, while a focus on productivity enhances its profitability. Its framework to drive sustainability and social measures-Paathya-with several short- and long-term goals to be fulfilled by 2030, guides the Company in doing business in a responsible manner. Collectively, all these factors enable the Company to achieve its strategic targets.

Compliance

IHCL has instituted a robust internal control framework to proactively mitigate the risk of non-compliance. The Company adopts a forward-looking approach to compliance, emphasising timely and responsive interventions. Adherence to applicable national and regional laws and regulations is integral to its operations, encompassing areas such as product safety and claims, intellectual property (trademark, copyright, and patents), competition law, employee health and safety, environmental standards, corporate governance, listing and disclosure requirements, employment practices, and taxation. IHCL is committed to fostering a culture of compliance through continuous awareness-building, meticulous documentation, and by enhancing internal expertise with that of independent consultants, as and when required.

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, provides 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:

The Boards Audit Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings as well as the review of the resolution mechanism for critical audit issues. 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, 2025

Standalone Financial Results

The following table sets forth financial information for the Company for the year ended March 31, 2025.

		(Rs. crores)
	Year Ended
	March 31, 2025	March 31, 2024
Income
Revenue from Operations	4,916.54	4,405.60
Other Income	228.55	184.51
Total Income	5,145.09	4,590.11
Expenses
Food and Beverages Consumed	350.29	333.11
Employee Benefit Expenses and Payment to Contractors	942.32	872.31
Depreciation and Amortisation Expenses	257.25	228.20
Other Operating and General expenses	1,591.91	1,487.98
Total Expenses	3,141.77	2,921.60
Profit before Finance Costs and Tax	2,003.32	1,668.51
Finance Costs	100.05	114.88
Profit before Exceptional Items and Tax	1,903.27	1,553.63
Exceptional Items	(16.24)	(71.05)
Profit before Tax	1,887.03	1,482.58
Tax Expense	473.80	387.65
Profit after Tax	1,413.23	1,094.93

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. crores)
	Year Ended
Particulars	March 31, 2025	March 31, 2024
Room Income	2,238.42	1,952.72	15
Food, Beverage & Banqueting Income	1,650.32	1,562.90	6
Other Operating Income	483.94	426.70	13
Management & Reimbursable Fees	543.86	463.28	17
Non-operating Income	228.55	184.51	24
Total Income	5,145.09	4,590.11	12
Statistical Information*
Average Rate Per Room (Rs.)	17,216	15,626	10
Occupancy (%)	78	77	1% point

* Statistics data reported on Like for Like (LFL) basis and excludes hotels opened after 1^st April 2022.

i) Ginger Mumbai Airport which opened in the third quarter last financial year, operating 371 keys and managed by Roots Corporation Limited, a wholly owned subsidiary of the Company completed its first full year of operations.

ii) Room income for the year was higher by 15% from the previous year with an average rate per room (ARR) of 717,216 and an average occupancy at 78%. ARR increased by 10% and average occupancy increased by 1.1 percentage points for the year on a like to like basis. Revenue per available room (RevPAR) of 713,448 increased by 12% from the previous year. Business increased across all customer segments including corporate, leisure, events, conferences and groups backed by robust demand.

iii) Food, beverage and banqueting income for the year was higher by 6% from the previous year contributed by 8% growth in restaurants and 3% growth in banqueting events.

iv) Other Operating Income increased by 13% over the previous year. It primarily comprises income from membership fees, rentals, spa and health club, laundry, transportation, telephone and business centre rents among others. Fee income collectively from The Chambers, Health Club, Spa & Swimming Pool membership & Epicure Membership increased by 24%. Income from other services like laundry, transportation, wellness and beauty salon increased by 5% from the previous year in line with increase in occupancies.

v) Management and Reimbursable fees at 7543.86 crores were higher by 17% from the previous year. The increase in management fees and reimbursable fees was mainly due to higher business activity levels of managed properties in the portfolio and new managed properties commencing operations.

vi) Non-operating Income increased by 744.04 crores to 7228.55 crores in the current year from 7184.51 crores in the previous year. Non-operating income increased mainly due to a higher interest income on surplus funds invested 745.64 crores, profit on sale of investment of 710.26 crores and higher dividend of 727.63 crores from investments in subsidiaries, joint ventures and associate companies partially offset by a one-time non-recurring income of 735.61 crores from interest on income tax refunds in the previous year.

b) Expenses

Total expenses increased to 73,141.77 crores during the current year from 72,921.60 crores in the previous year. While Total Income increased by 12% from the previous year, Total Expenditure increased by 8% from the previous year mainly due to increase in variable costs consequent to increased business activity. Variances under each expenditure head are explained below:

i) Food and Beverages Consumed

	March 31, 2025	March 31, 2024	Change (%)
	(Rs. crores)	(Rs. crores)
Food and Beverages Consumed	350.29	333.11	5
% To Food, Beverage & Banqueting Income	21	21	-

Food and Beverages Consumed, which is variable in nature, increased with increase in income from food, beverages and banqueting business. Food and Beverages Income increased by 6% from the previous year and Food and Beverages Consumed increased by 5%. Hence cost as a percentage of Food and Beverages Income remained at par with previous year.

ii) Employee Benefit Expenses and Payment to Contractors

	March 31, 2025	March 31, 2024	Change (%)
	(Rs. crores)	(Rs. crores)
Employee Benefit	942.32	872.31	8
Expenses and Payment to Contractors

Employee Benefit Expenses and Payment to Contractors increased by 8% to 7942.32 crores in the current year from 7872.31 crores in the previous year. This was mainly due to an increase in employee costs commensurate with increase in business activities. The increase was also attributed towards merit increases, increments paid to employees, negotiated salary increases with labour unions, talent development initiatives and compliance of necessary laws.

iii) Depreciation and Amortisation Expenses

	March 31, 2025 (Rs. crores)	March 31, 2024 (Rs. crores)	Change (%)
Depreciation and Amortisation Expenses	257.25	228.20	13

Depreciation and Amortisation Expenses increased by 13% over the previous year. This was mainly due to additional depreciation on capital expenditure for renovation of hotels, depreciation of newly opened hotel Ginger Mumbai Airport for full year, additional amortisation on right-of-use assets in line with terms of lease contract and higher average depreciation rate for capital expenditure pertaining to intangible assets like website developments and software installed.

iv) Other Operating and General Expenses

	March 31, 2025 (Rs. crores)	March 31, 2024 (Rs. crores)	Change (%)
Other Operating Expenses	801.43	774.57	3
General Expenses	790.48	713.41	11
Total	1,591.91	1,487.98	7

Other Operating and General Expenses increased by 7% to Rs.1,591.91 crores in the current year from Rs.1,487.98 crores in the previous year.

Other Operating Expenses increased by 3% to Rs.801.43 crores in the current year from Rs.774.57 crores in the previous year. Variable cost such as power & fuel, maintenance, linen supplies, room and catering supplies, transportation, distribution costs of commissions to travel agencies, credit card charges and costs of hosting banqueting events increased in line with change in business volumes.

General Expenses increased to Rs.790.48 crores in the current year from Rs.713.41 crores in the previous year, an increase of VII.01 crores. Variable lease costs linked to turnover of leased properties increased by Rs.28.99 crores, an increase of 13% over previous year. Spends on corporate social responsibility increased by Rs.13.90 crores in compliance with section 135 of the Companies Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 [CSR Rules], Other increase in expenses were attributed to insurance, rates, taxes and higher general costs related to digital spends.

c) Finance Costs

	March 31, 2025 (Rs. crores)	March 31, 2024 (Rs. crores)	Change (%)
Finance Costs	100.05	114.88	(13)

Finance Costs for the current year at Rs.100.05 crores were lower than the preceding year by Rs.14.83 crores or 13%. Finance Costs include interest cost on lease liabilities of Rs.98.39 crores in the current financial year in comparison to Rs.98.92 crores in the previous financial year.

d) Exceptional Items

Exceptional Items include items as under:

		(Rs. crores)
		Year Ended
Particulars	March 31, 2025	March 31, 2024
Provision for Impairment of Investment in a Subsidiary that Incurred Losses	(16.24)	(81.89)
Reversal of Provision for Impairment in the Value of Investment in a Joint Venture		10.84
Total	(16.24)	(71.05)

Exceptional Items for the current year mainly comprised of a provision for cash loss of foreign subsidiary.

e) Tax Expense

Tax Expense for the year was Rs.473.80 crores as against Rs.387.65 crores in the previous year mainly due to increase in business profits in the current year.

f) Profit after Tax

During the current year, the Company generated a Profit after Tax of Rs.1,413.23 crores compared to Rs.1,094.93 crores in the previous year, an increase of 29% from previous year. This was due to a significant improvement in the operating revenues of the Company combined with operating leverage resulting in margin expansion from 23.9% in the previous year to 27.5% in the current year.

g) Liquidity and Debt

	March 31, 2025 (Rs. crores)	March 31, 2024 (Rs. crores)	Change (%)
Cash and Cash Equivalents*	1,731.56	1,017.86	70
Current Investments	516.39	641.65	(20)
Total Liquidity	2,247.95	1,659.51	35
Gross Debt	-	-
Net liquidity	2,247.95	1,659.51	35

* Includes balances greater than 3 months not earmarked or pledged

The Company maintained a good liquidity position during the year. At the end of the year, the liquidity position represented by cash, cash equivalents and current investments increased by Rs.588.44 crores over the previous year to Rs.2,247.95 crores. The Company did not have any debt outstanding during the year.

Cash Flow

		(Rs. crores)
Particulars	Year Ended
	March 31, 2025	March 31, 2024
Net Cash from/(used for) Operating Activities	1,517.15	1,527.71
Net Cash from/(used for) Investing Activities	(1,219.80)	(1,203.09)
Net Cash from/(used for) Financing Activities	(360.59)	(740.30)
Net lncrease/(Decrease) in Cash and Cash Equivalents	(63.24)	(415.68)

Operating Activities

Net Cash generated from Operating Activities during the year was Rs.1,517.15 crores as compared to Rs.1,527.71 crores in the previous year. Reduction due to change in working capital is Rs.65.60 crores from previous year in line with increase in business activity. Cash outflow on account of Income tax paid net of refunds increased by Rs. 228.87 crores from previous year due to a non-recurring interest refund in previous year of Rs. 135 crores.

Investing Activities

During the year, Net Cash used for Investing Activities amounted to Rs.1,219.80 crores, compared to Rs.1,203.09 crores in the previous year. The Companys outlay on capital expenditure was Rs.353.23 crores, which was mainly for greenfield projects and renovations. The Company invested an amount of Rs.77.19 crores primarily for its hotel operations in the US and Rs.152.00 crores in its subsidiaries executing greenfield projects. The Company also placed deposit of Rs.145.50 crores with one of its subsidiaries executing a greenfield project. The Company executed Subscription cum Shareholders Agreement (SSHA) with Ambuja Neotia Hotel Ventures Limited (ANHVL) and Rajscape Hotels Private Limited (RHPL) to acquire 55% stake in RHPL for an aggregate consideration of Rs.17.66 crores. During the year Rs.167.63 crores was liquidated from current investments while Rs.777.72 crores was invested in bank deposits. Interest and dividend received was to Rs.140.15 crores.

Financing Activities

During the year, Net Cash used for Financing Activities was Rs.360.59 crores as against Rs.740.30 crores used in the previous year. The Company paid dividend of Rs.248.32 crores and lease liabilities of Rs.112.22 crores during the year. The Company had repaid outstanding borrowings of Rs.450 crores in the previous year.

Key Financial Ratios for Standalone Financials

Key financial ratios and their definitions are given below:

	Year Ended
d Particulars	March 31, 2025	March 31, 2024
1 Debt-Equity Ratio (in times)	-	-
2 Debt Service Coverage Ratio (in times)	-	4.56
3 Interest Service Coverage Ratio (in times) - {a}	n/m	n/m
4 Current Ratio (in times)	2.26	1.78
5 Net Capital Turnover Ratio (in times)	3.68	4.63
6 Trade Receivables Turnover Ratio (in days)	32	32
7 Inventory Turnover Ratio-{b}	na	na
8 Operating Profit Margin (in %)-{c}	41.33	38.86
9 Net Profit Margin (in %)	27.47	23.85
10 Return on Capital Employed (in %)	16.70	15.20
11 Return on Equity (in %)	13.21	11.54

a) Interest Service Coverage Ratio equals Profit before Tax + Interest on Borrowings (Net) + Provision for Impairment of Investments + Depreciation and Amortisation divided by Interest on Borrowings (Net). This ratio is not meaningful (n/m) for the current year as Interest on Borrowings (Net) is negative.

b) Inventory Turnover Ratio has not been presented since the Company holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to Total Assets.

c) Operating Profit Margin equals Profit/(Loss) before Depreciation and Amortisation Expenses, Interest, Tax and Exceptional Items less Other Income divided by Revenue from operations.

d) The definitions of other ratios are given in Note 46 of the Notes to Standalone Financial Statements.

The Company repaid all outstanding borrowings in last year, as a result the Debt Service Coverage Ratio is not applicable for the year. Current ratio increased due to increase in current assets primarily attributable to internal accruals deployed in bank deposits. Growth in Revenue from Operations and operating profits improved the Operating Profit Margin and Net Profit Margin, Return on Capital Employed and Return on Equity in comparison with the previous year.

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.

Acquisition of Subsidiaries:

a) The Company has executed an amendment to the

Shareholders Agreement with SATS Limited and TajSATS Air Catering Limited (TajSATS) on July 23, 2024. Resultantly, TajSATS has become a subsidiary of the Company from a joint venture from that date and has been consolidated, as a subsidiary, on a line-by-line basis instead of equity accounting.

The brief results of TajSATS (from the acquisition date) included in the consolidated results is as under:

Particulars	March 31, 2025
	Rs. crores
Total Revenue	724.20
Total Expenses	568.83
Profit before tax	155.37
PAT	115.44

b) The Company has acquired 55% in Rajscape Hotels Private Limited (RHPL) on Jan 13, 2025. RHPL operates and manages properties under the brand name Tree of Life in different locations of India. The results of RHPL has been consolidated with IHCL from the date of acquisition. The results for the post acquisition period are not material.

Consolidated Results

The following table sets forth the Consolidated Financial results for the year ended March 31,2025.

		(Rs. crores)
	Year Ended
Particulars	March 31, 2025	March 31, 2024
Income
Revenue from Operations	8,334.54	6,768.75
Other Income	230.46	182.92
Total Income	8,565.00	6,951.67
Expenses
Food and Beverages Consumed	773.75	520.83
Employee Benefits Expenses	2,150.68	1,805.21
Depreciation and Amortisation Expenses	518.16	454.30
Other Operating and General Expenses	2,640.78	2,285.58
Total Expenses	6,083.37	5,065.92
Profit before Finance Costs and Tax	2,481.63	1,885.75
Finance Costs	208.38	220.22
Profit before Exceptional Items, Tax, and Share of Profit of Equity Accounted Investees	2,273.25	1,665.53
Exceptional Items	304.80	-
Profit before Tax, before Share of Profit of Equity Accounted Investees and Non-controlling Interests	2,578.05	1,665.53
Tax expense	616.80	463.94
Profit after Tax, before Share of Profit of Equity Accounted Investees and Non-controlling Interests	1,961.25	1,201.59
Add: Share of Profit of Associates and Joint Ventures (net of tax)	76.84	128.65
Profit for the Year	2,038.09	1,330.24
Less: Non-controlling Interest in Subsidiaries	130.50	71.17
Profit after Tax Attributable to Owners of the Company	1,907.59	1,259.07

Income

Revenue from Hotel Operations increased by 13% to Rs.7,623.24 crores from Rs.6,768.75 crores in the previous year. Among key Indian subsidiaries, Piem Hotels Limited registered a turnover of Rs.628.15 crores, a growth of 10% over the previous year and Roots Corporation Limited registered a turnover of Rs.483.75 crores, a growth of 29% over the previous year. Among key international subsidiaries, St. James Court Hotel Ltd. owning UK hotels posted a turnover of Rs.495.89 crores growing 0.3% over previous year due to ongoing renovations while UOH Inc owning US hotels registered a turnover of ^816.03 crores growing 22% over the previous year. Fees from managed properties increased to Rs.562.39 crores in the current year by 20% over the previous year due to increase in turnover and profitability of managed properties as well as opening of new hotels on management contracts. Other Income increased by Rs.47.54 crores to T230.46 crores from T182.92 crores in the previous year on account of higher treasury income generated from higher surplus liquidity.

Expenditure

Total Expenditure from hotel operations increased by 9% to Rs.5,522.41 crores in the current year from ^5,065.92 crores in the previous year. Increase in expenditure was in line with increases in business activity across the Group as revenue from hotel operations increased by 13%. In comparison with the previous year employee benefit costs increased by 10% for hotel operations. Depreciation and Amortisation for the year was higher due to completed renovations at hotels, the full year impact of addition of a new hotel property viz. Ginger Mumbai Airport on IHCLs standalone books and additional amortisation on right-of-use assets. Operating expenses increased in line with increase in business volumes. Variable costs of maintenance, linen, room and catering supplies, transportation, distribution costs of commissions to travel agencies, credit card charges and costs of hosting banqueting events, all increased in line with business activity and business mix. General expenses increased mainly due to variable lease costs linked to turnover of leased properties, advertising and promotion costs, loyalty programme costs, insurance, rates, taxes and higher general administration costs including professional fees, travel and rent.

Finance Costs

Finance Costs, including interest on lease liabilities of Rs.188.06 crores for the year ended March 31, 2025 at Rs.208.38 crores was lower than the previous year by Rs.11.84 crores due to repayment of borrowings during the previous year.

Exceptional Items

Exceptional Items for the year include the following items:

		(Rs. crores)
	Year Ended
Particulars	March 31, 2025	March 31, 2024
Gain on Fair value of equity investment due to business combination on account of subsidiarisation of TajSATS	307.36
Impairment of asset in a subsidiary	(2.56)	-
Total	304.80	-

Profit after Tax Attributable to Owners of the Company

Profit after Tax, including Share of Profit of Equity Accounted I nvestees Attributable to Owners of the Company for the year was Tl,907.59 crores (Rs. 1,602.79 crores excluding exceptional items) as compared to a profit of ^1,259.07 crores in the previous year. Higher operating profits of the Group on account of improved business, higher margins and lower finance costs as well as increased business volumes and margins of joint ventures and associates contributed to the increase in profits. The subsidiary companies Roots Corporation Limited, managing the Ginger brand and TajSATS Air Catering Ltd., in the business of airline catering recorded exceptional growth in turnover and profitability during the year.

Consolidated Cash Flow

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

		crores)
	Year Ended
	March 31, 2025	March 31,2024
Net Cash from/(used in) Operating Activities	2,194.37	1,935.14
Net Cash from/(used) in Investing Activities	(1,892.48)	(1,210.01)
Net Cash from/(used) in Financing Activities	(547.34)	(984.65)
Net lncrease/(Decrease) in Cash and Cash Equivalents	(245.45)	(259.52)

Operating Activities

Net Cash generated from Operating Activities for the current year was Rs.2,194.37 crores as against Rs.1,935.14 crores in the previous year. The increase in Cash from Operating Activities was mainly due to improvement in business of the Group.

Investing Activities

Net Cash used for Investing Activities was Rs.1,892.48 crores in the current year as against Rs.1,210.01 crores in the previous year. During the year, the Group utilised cash for capital expenditure amounting to Rs.1,074.12 crores. The group also utilised T17.66 crores for acquisition of 55% in Rajscape Hotels Private Limited. Further the group invested T811.62 crores for investment in bank deposits.

Financing Activities

Net Cash used for Financing Activities across the Group was ^547.34 crores for the current year as against T984.65 crores in the previous year. In the current year, cash was used for repayment of borrowings, payment of lease liabilities, interest and dividends.

Closing Cash Position, Debt and Liquidity

The Group registered a very strong free cash flow of Rs.1,099 crores during the year. The cash position of the Group at the end of March 31, 2025 was Rs.3,073.22 crores comprising cash and cash equivalents of Rs.256.91 crores, current investments of ^898.87 crores and balances with banks in call and short-term deposit accounts of Rs.1,917.44 crores. As against this, the gross debt of the Group was Rs.224.70 crores. Consequently, the net cash position of the Group was Rs.2,848.52 crores.

Key Financial Ratios for Consolidated Financials

Key financial ratios for consolidated financial statements and their definitions are given below:

	Year Ended
Sr No	March 31,2025	March 31,2024
1 Debt-Equity Ratio (in times)	0.02	0.03
2 Debt Service Coverage Ratio (in times)	22.89	4.39
3 Interest Service Coverage Ratio (in times) - {a}	n/m	n/m
4 Current Ratio (in times)	2.11	1.72
5 Net Capital Turnover Ratio (in times)	4.79	6.13
6 Trade Receivables Turnover Ratio (in days)	25	25
7 Inventory Turnover Ratio - {b}	NA	NA
8 Operating Profit Margin (in %) - {c}	33.23	31.87
9 Net Profit Margin (in %)	18.71	18.11
10 Return on Capital Employed (in %)	17.32	15.12
11 Return on Equity (in %)	15.55	14.44

* Net Profit Margin and Return on Equity is calculated on Profit after Tax attributable to the owners of the Company net of Exceptional Items and Equity attributable to the owners of the Company. Accordingly previous numbers have been reinstated for comparability.

a) Interest Service Coverage Ratio equals Profit before Tax + Interest on Borrowings (Net) + Provision for Impairment of Investments + Depreciation and Amortisation divided by Interest on Borrowings (Net).

b) Inventory Turnover Ratio has not been presented since the Company holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to Total Assets

c) Operating Profit Margin equals Profit/(Loss) before depreciation and amortisation expenses, Interest Tax and Exceptional Items less Other Income divided by Revenue from Operations.

d) The definitions of other ratios are given in Note 46 of the Notes to Standalone Financial Statements.

The Group maintained a healthy capital structure evident from the Debt-Equity ratio at 0.02 times as compared to 0.03 times for the previous year. The Group remained net cash positive. Reduction in debt and improvement in earnings improved the Debt Service Coverage ratio substantially. Current Ratio improved to 2.11 times and Net Capital Turnover Ratio was 4.79 times. Growth in Revenue from Operations and operating profits improved the Operating Profit Margin, Net Profit Margin, Return on Capital Employed and Return on Equity in comparison with the previous year.