Indian Hotels net up 75% at Rs 46 cr

MUMBAI: Indian hotels (IHCL), which owns the Taj hotels, resorts and palaces on Tuesday reported an increase of 75% in quarterly net profit to Rs 46 crore backed by better occupancies, room rates, costs control and improved operating efficiencies.

Total income was up 30% at Rs 293 crore. It reported a turnover of Rs 563 crore up 30% and net profit of Rs 84 crore up 95% for the six months ended September ’06.

“The growth has been driven by an improvement in average room rates across the portfolio, backed by a steady growth in its food and beverage business,” said Raymond Bickson, MD, IHCL.

During the quarter, IHCL launched two new Ginger hotels in Trivandrum and Mysore and signed a management contract for a Taj Residency hotel in Goa.

In addition, new Ginger hotels were under construction at six locations. The company also continues to scout for opportunities for growth in key source markets in international destinations like UK, south Asia and East Asia.
IHCL has executed a letter of intent with the owners of Boston-based Ritz Carlton for the outright purchase of the hotel for $170m. The sale and purchase agreement is scheduled to be executed in early November ’06 with deal closure targeted for early January ’07.

The company will finance the equity component required for funding this deal from its unutilised FCCB proceeds, which is around $90m, officials said.

Of the total issue, FCCB amounting to $147m have been converted to equity shares on September ’06. Further, IHCL recently acquired 80.1% of the share capital of Taj Lands End, effectively making TLEL a wholly-owned subsidiary.