Taj hotels owner IHCL reports 80 per cent profit slump
31 July 2010
The Ratan Tata-led Indian Hotel Co Ltd, which runs Asia's largest chain of hotels under the Taj Hotels brand, on Friday reported an almost 80 per cent drop in standalone profit, its biggest drop in profit in almost eight years, as costs rose and it kept part of its terrorist-hit flagship Taj Mahal Hotel & Towers in Mumbai closed for renovation.
Net income of the company plunged to 3.33 crore ($716,000) in the quarter months ended 30 June from Rs16.44 million in the same period last year, the company said in a statement to the Bombay Stock Exchange. That's the biggest drop in profit since the quarter ended 30 September 2002, according to data from Bloomberg.
The heritage wing of the Mumbai hotel built in 1903 was gutted when militants armed with guns and explosives killed 166 in attacks across Mumbai in 2008.
Sales at the company, which plans to open the renovated heritage wing on 15 August, rose 25 per cent in the quarter.
Indian Hotels has spent Rs180 crore renovating its flagship hotel, managing director Raymond Bickson told reporters in Mumbai.
The company's insurance for business interruption expired in November, and costs increased 9 per cent.