Indian Hotels Company Ltd (IHCL), India’s largest hospitality company, is confident of sustaining double-digit revenue growth in FY27, backed by a robust pipeline of hotel openings, higher management fee income, improved performance from renovated properties and an asset-light expansion strategy.
Speaking to analysts after the company’s Q1 FY27 earnings, IHCL Managing Director and Chief Executive Officer Puneet Chhatwal said the company had started the second quarter on a strong note and remained optimistic about maintaining its growth trajectory.
“We remain confident of delivering what we have promised and guided for, which is double-digit revenue growth with sustained margins, strong cash generation and improved quality of earnings,” he said.
Strong start to Q2
Chhatwal said the momentum witnessed in the first quarter has continued into the current quarter.
“Building on this strong foundation and sustained momentum, we remain confident of delivering double-digit growth in the year ahead. The way Q2 has started makes us optimistic about delivering similar or even better top-line performance this quarter,” he said.
Renovated hotels boosting profitability
IHCL’s strategy of investing in marquee hotel assets is beginning to deliver higher returns.
During the previous financial year, the company completed major renovations at several flagship properties, including Taj Palace, New Delhi, The President, Mumbai, Taj West End, Bengaluru, and Taj Fort Aguada, Goa, refurbishing over 300 rooms.
According to Chhatwal, these investments are translating into stronger pricing power and improved operating performance across key markets.
Another standout performer has been Taj Ganges, Varanasi, where a newly commissioned 100-room wing became profit-before-tax (PBT) positive in its very first quarter of operations.
The expansion helped the property deliver 44% year-on-year revenue growth while posting an EBITDA margin of 40% during Q1 FY27.
“This underscores our ability to deploy capital in a disciplined manner, unlock value from our existing assets and generate strong returns with a relatively short payback period,” Chhatwal said.
Portfolio nears 650 hotels
IHCL continued its rapid expansion during the quarter by signing 20 hotels and opening 11 new properties.
Significantly, 17 of the 20 signings were under the Gateway, Ginger and Tree of Life brands, reflecting the company’s focus on expanding in emerging and high-growth markets through an asset-light strategy.
The company currently operates 382 hotels, with nearly 265 hotels in the pipeline, taking the overall portfolio to 645 hotels.
“We remain confident of crossing the 650-hotel milestone during the current month itself,” Chhatwal said.
Asset-light model driving management fees
IHCL’s asset-light strategy is also delivering higher management fee income. Management fee revenue rose 26% year-on-year to ₹168 crore during the quarter from ₹133 crore in the corresponding period last year.
While temporary headwinds affected fee income from hotels in Dubai, Sri Lanka and the Maldives, Chhatwal said the company expects management fee income to continue growing at a high-teens compound annual growth rate (CAGR), supported by a strong pipeline of new hotel openings.
Acquisitions add new growth engines
The company’s recent acquisitions are beginning to contribute meaningfully to earnings.
Following the acquisition of Brij Hotels in April, the portfolio of 11 operational properties generated ₹11 crore in revenue during the quarter, registering 42% year-on-year growth. Four additional Brij hotels are expected to open during the current financial year.
Meanwhile, wellness resort operator Atmantan posted consolidated revenue of ₹19 crore, up 19% from a year earlier.
IHCL also strengthened Atmantan’s growth pipeline by signing a managed wellness resort in Hyderabad, reinforcing its presence in the premium wellness hospitality segment.
Global expansion without buying assets
On overseas expansion, Chhatwal reiterated that IHCL would continue pursuing a capital-light international strategy, avoiding expensive hotel acquisitions.
Instead, the company plans to partner with institutional property owners, invest selectively in branding and renovations where required, and operate hotels through management contracts or revenue-sharing arrangements.
“It’s not our strategy to start buying hotels whether in Southeast Asia or Europe,” he said.
He added that IHCL remains keen to establish a presence in markets such as Singapore, Switzerland and London, while continuing to expand in Southeast Asia.
The company has also opened the first of its three planned luxury lodges at Kruger National Park in South Africa, with two more expected over the next 12 months.