EIH Associated Hotels shares slide 5% after Q3 results

Shares of EIH Associated Hotels fell as much as 5.1% on Tuesday to Rs 355.15 on the BSE amid a broader market selloff, as weak global sentiment weighed on investor confidence. The decline came despite the company reporting a modest rise in quarterly earnings.

The hospitality firm, part of The Oberoi Group, posted a 5.4% year-on-year increase in net profit for the December quarter, reaching Rs 39.91 crore, compared to Rs 37.87 crore in the same period last year. Revenue rose 5% for the third quarter to Rs 133 crore from Rs 126.65 crore, reflecting steady demand in the premium hospitality sector.

Earnings before interest, tax, depreciation, and amortization (Ebitda) climbed 3% to Rs 53.8 crore from Rs 52.3 crore a year earlier. However, margins contracted slightly in the December quarter to 40.5% from 41.3%, signaling pressure on profitability despite revenue growth.

Earnings per share (EPS) for the quarter stood at Rs 6.55, marking the highest level in the last five quarters. The company also reported an improvement in cash and cash equivalents to Rs 47.40 crore, bolstering its short-term liquidity position. Additionally, its debtors turnover ratio rose to 31.68 times, indicating improved efficiency in managing receivables.

Despite the earnings growth, EIH Associated Hotels’ stock performance has remained under pressure. The stock has declined 3.3% over the past year and has lost 18.8% in the last six months. In the past week alone, shares have fallen 11.6%, reflecting bearish sentiment toward the hospitality sector.

EIH Associated Hotels operates as the flagship company of The Oberoi Group, which owns and manages 20 luxury hotels under the Oberoi brand and 10 five-star properties under the Trident brand. The group also has businesses in flight catering, airport restaurants, travel services, and corporate air charters.Also read | Can Asian Paints shares tumble to Rs 2,000? Brokerages weigh in

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