Why Did Prestige Hospitality Ventures Report an 18% Profit Decline?
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Synopsis
Prestige Hospitality Ventures Limited (PHVL) faces an 18% profit decline despite a surge in operational revenue as they prepare for their IPO. Discover the factors at play and what this means for the company's future.
Key Takeaways
- PHVL's profit dropped by 17.9%.
- Operational revenue increased by 49.2%.
- SEBI approved the IPO proposal.
- Strategic focus on luxury hospitality assets.
- Largest keys share in Marriott's portfolio in South India.
Mumbai, Aug 6 (NationPress) Prestige Hospitality Ventures Limited (PHVL) has disclosed a 17.9% decrease in its restated profits for the period concluding on December 31, 2024, as it prepares for its initial public offering (IPO).
The company’s profits dropped to Rs 67.7 crore from Rs 82.4 crore in the same period last year (December 31, 2023), according to the draft red herring prospectus (DRHP) submitted to the Securities and Exchange Board of India (SEBI).
Despite the profit decline, the hospitality segment of the Prestige Group experienced a 49.2% increase in operational revenue, climbing to Rs 995.6 crore from Rs 667.5 crore a year prior.
Total income rose by 47% to Rs 1,012.9 crore, while total expenses escalated by 58.5% to Rs 909.8 crore.
SEBI has sanctioned PHVL’s IPO, which includes a fresh share issue worth Rs 1,700 crore and an offer for sale (OFS) amounting to Rs 1,000 crore from its promoter Prestige Estates Projects Limited.
The company intends to allocate Rs 1,121.28 crore from the proceeds to pay off or prepay borrowings incurred by itself and its significant subsidiaries, Sai Chakra Hotels and Northland Holding Company.
Additional funds will be directed towards acquisitions, strategic initiatives, and general corporate needs.
PHVL specializes in luxury, upper upscale, and upper midscale hospitality offerings catering to both business and leisure travelers.
As of December 31, 2024, it operated seven properties with a total of 1,445 keys, including one hotel under renovation, three ongoing projects with 951 expected keys, and nine upcoming projects projected to have 1,558 keys.
The company’s portfolio is spread across cities such as Bengaluru, Delhi-NCR, Mumbai, Goa, Hyderabad, and Chennai.
PHVL collaborates with renowned global hospitality brands, including St. Regis, JW Marriott, Sheraton, W Hotels, Conrad by Hilton, and Angsana Resorts & Spa.
Notably, PHVL possesses the largest share of keys in Marriott’s managed portfolio in South India, representing 9% of the total.
The IPO will be overseen by JM Financial, CLSA India, J.P. Morgan India, and Kotak Mahindra Capital.
Point of View
It's crucial to recognize that while Prestige Hospitality Ventures faces challenges with its profit margins, the growth in operational revenue signifies resilience. The strategic focus on luxury assets will likely position them for recovery post-IPO, aligning with market demands.
NationPress
20/08/2025
Frequently Asked Questions
What caused the profit decline at PHVL?
The decline in profit was primarily driven by increased total expenses, which surged by 58.5%, overshadowing a significant rise in operational revenue.
How is PHVL planning to use the funds from the IPO?
PHVL plans to utilize a significant portion of the IPO proceeds to repay or prepay borrowings and for acquisitions and strategic initiatives.
