Oriental Hotels Reports 7% YoY Increase in PAT for Q2 FY25

Introduction:

  • Net Profit Growth: Oriental Hotels’ consolidated net earnings for Q2 FY25 rose by means of 6.Sixty two% 12 months-on-12 months to ₹8.38 crore, in comparison to ₹7.86 crore in Q2 FY24.
  • Revenue Increase: Revenue from operations reached ₹103.30 crore, reflecting a robust 13.48% growth from the previous yr.

Profit Before Tax: The company reported a profit before tax of ₹12.62 crore, marking a 10.41% increase from ₹11.43 crore in the same quarter last year.

Expenses Rise: Total expenses climbed 11.59% to ₹91.16 crore, driven by increased costs in materials and employee benefits.

Detailed Analysis:

Oriental Hotels demonstrated resilience in the second quarter of FY25, with net profit growing despite an overall challenging economic environment. The solid revenue growth can be attributed to a recovery in the hospitality sector, as travel and tourism continue to rebound post-pandemic.

Oriental Hotels Q2 FY25: Strong Growth Amid Rising Expenses:

Expense Management:

Materials and Labor Costs: The cost of materials consumed increased by 11.3% to ₹10.64 crore, while employee benefits expenses rose by 8.87% to ₹23.94 crore. This reflects the ongoing investment in quality and service, crucial for maintaining competitive advantage in the hospitality market.

  • Interestingly, other employee benefits showed a decline of 4.04%, indicating effective management in some operational areas.

Half-Year Performance:

On a half-year basis, net profit declined by 40.02% year-on-year to ₹10.01 crore for H1 FY25, although revenue slightly improved to ₹185.27 crore from ₹183.62 crore in H1 FY24. This dip in profit highlights the volatility in the sector and suggests that while

the company is performing well in the short term, it faces challenges in sustaining long-term profitability.

Market Reaction:

Following the earnings release, shares of Oriental Hotels rose by 0.67% to trade at ₹179.90 on the BSE, indicating a positive reception from investors.

Conclusion:

Oriental Hotels is showing signs of recovery with a notable increase in quarterly revenue and profits. However, the substantial drop in half-year profits underscores the importance of continued focus on cost management and operational efficiency.

As the hospitality sector continues to evolve, the company will need to navigate these challenges to maintain growth momentum in the future.

Frequently Asked Questions FAQ:

1. What was the net profit for Oriental Hotels in Q2 FY25?
Oriental Hotels reported a consolidated net profit of ₹8.38 crore for Q2 FY25, representing a 6.62% increase compared to ₹7.86 crore in Q2 FY24.

2. How did revenue from operations perform in Q2 FY25?
Revenue from operations reached ₹103.30 crore in Q2 FY25, reflecting a year-on-year growth of 13.48%.

3. What were the expenses incurred by Oriental Hotels in Q2 FY25?
Total expenses increased by 11.59% to ₹91.16 crore in Q2 FY25, driven primarily by higher costs in materials and employee benefits.

4. How did profit before tax change compared to the previous year?
Profit before tax rose by 10.41% to ₹12.62 crore in Q2 FY25, up from ₹11.43 crore in Q2 FY24.

5. What challenges did Oriental Hotels face in H1 FY25?
In H1 FY25, the company experienced a 40.02% decline in net profit, which fell to ₹10.01 crore compared to the previous year. This highlights the challenges in sustaining profitability despite a slight increase in revenue.

6. What are the main cost contributors for Oriental Hotels?
The main cost contributors include the cost of materials consumed, which increased by 11.3% to ₹10.64 crore, and employee benefits expenses, which rose by 8.87% to ₹23.94 crore.

7. How did the market react to the Q2 FY25 results?
Following the announcement, shares of Oriental Hotels increased by 0.67%, trading at ₹179.90 on the BSE, indicating a positive sentiment among investors.

8. What is the outlook for Oriental Hotels moving forward?
While the company has shown solid quarterly performance, the significant decline in half-year profits suggests that careful management of costs and operational efficiencies will be crucial for sustained growth.

9. Where can I find more detailed financial information about Oriental Hotels?
Detailed financial reports and updates can be found on the official Oriental Hotels website or through financial news platforms and regulatory filings.

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