The luxury hotel operator saw consolidated revenue reach INR 910 crore, supported by RevPAR leadership across its “The Oberoi” and “Trident” brands, despite exceptional non-recurring expenses related to new legislative labour codes.
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EIH Ltd (NSE: EIHOTEL), the flagship company of the Oberoi Group, reported a 9% year-on-year increase in consolidated revenue for the third quarter ended December 31, 2025. The company maintained its Revenue Per Available Room (RevPAR) leadership within its competitive set, though consolidated net profit was impacted by exceptional charges related to national legislative changes. The stock’s performance remains anchored by strong Average Room Rates (ARR), despite a moderation in domestic travel demand toward the end of the calendar year.
Key Development
The primary driver for the quarter was the resilient performance of the luxury and upper-upscale segments, alongside a significant regulatory milestone involving the adjustment for new national Labour Codes. Additionally, EIH concluded a long-standing legal matter regarding Mashobra Resort Limited (MRL). Following an order from the Hon’ble High Court of Himachal Pradesh, the company transferred its shares in MRL to the State Government upon receipt of compensation, effectively closing the execution petitions as of January 5, 2026.
Financial Performance
For Q3 FY26, consolidated revenue stood at INR 910 crore, up from INR 831 crore in the prior-year period. EBITDA rose 7% to INR 413.4 crore. However, Profit After Tax (PAT) declined to INR 254.8 crore from INR 278.8 crore in the same quarter last year. This decrease is primarily attributed to a non-recurring exceptional item of INR 30.0 crore (consolidated) recognized as an incremental obligation due to the enactment of the Code on Wages, 2019, and other related Labour Codes. On a standalone basis, the company reported a total income of INR 810.06 crore and a profit of INR 198.51 crore for the quarter.
Business Model and Market Situation
EIH Ltd operates a premium hospitality model focused on high-margin luxury and upper-upscale segments through “The Oberoi” and “Trident” brands. The company currently maintains a global footprint of 30 properties with 3,801 keys. The business model prioritizes RevPAR leadership; internal data indicates that 13 out of 15 benchmarked hotels ranked first or second in their respective competitive sets during the quarter.
Segment Updates and Regulatory Milestones
• The Oberoi (Luxury): RevPAR grew 5.4% YoY in Q3, reaching INR 28,368, driven by a 5.4% increase in ARR to INR 35,909.
• Trident (Upper Upscale): This segment saw a stronger RevPAR increase of 12.5% YoY, reaching INR 13,865.
• Occupancy Trends: Average quarterly occupancy for domestic hotels remained stable at 79%, with November peaking at 84%.
• Regulatory Milestone: The company successfully assessed and accounted for the financial implications of the unified Labour Codes framework, which consolidated existing laws into a single framework governing employment benefits.
Business Outlook & Strategy
Management’s strategy is centered on a robust expansion pipeline of 30 properties totaling 2,448 keys. The development plan includes a mix of owned and managed properties, with notable international projects in London (expected 2028), Egypt (2026), and Saudi Arabia (2026). Domestically, expansion is targeted in leisure and religious destinations such as Goa, Rishikesh, and Tirupati. To fund these plans, EIH maintains a strong liquidity position with consolidated funds of INR 1,426 crore as of December 31, 2025.
Sector and Macro Context
The broader Indian hospitality sector faced headwinds as domestic air traffic growth slowed to 2.5% YoY in Q3 FY26, with December recording a 3.9% decline due to operational disruptions and weather. While corporate and festive demand supported performance in October and November, the absence of last year’s general election-driven spike and fewer auspicious wedding dates contributed to flat year-to-date occupancy across the industry.
Analyst Commentary and Market Perspective
Industry data suggests reasons for a cautious market stance on the stock in the short term. While revenue continues to grow, year-to-date occupancy has remained flat at 61-64% compared to the previous fiscal year. Analysts note that the non-recurring labour code charges and the high base effect from the previous year’s election-related demand may lead the stock to pass immediate growth expectations. However, the company’s continued RevPAR premium and award-winning service excellence—with “The Oberoi” ranked as a top brand globally—provide a long-term competitive moat.
Where Does EIH Ltd Stand Today?
As of the end of 2025, EIH Ltd remains a dominant player in the luxury hospitality market, successfully navigating legal closures and legislative changes. With a total comprehensive income of INR 460.9 crore for the nine-month period ended December 31, 2025, the company is leveraging its high liquidity and premier brand positioning to execute a significant global expansion phase.