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EIH Ltd

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BSE Code : 500840 | NSE Symbol : EIHOTEL | ISIN : INE230A01023 | Industry : Hotels & Restaurants |


Chairman's Speech

Carrying the legacy forward

Dear Shareholders,

The year 2023 stood out as a time of triumphs and tests. While we strengthened our resolve, we also grappled with the loss of our Chairman Emeritus, Mr. Prithvi Raj Singh Oberoi. His visionary leadership and transformative contributions continue to be our guiding lights. The solid foundations he established are the bedrock of our success today.

Mr. P.R.S. Oberoi redefined the concept of luxury, not only for us but for the entire hospitality sector in the subcontinent, placing India on the global stage. Embracing his vision and values, we continue to strive for excellence in our upcoming endeavours. We believe, as he did, that people are the most valuable asset of any organisation. With this principle at heart, we continue to nurture ourteam and uphold these high standards.

GLOBAL LANDSCAPE

In 2023, the global economy showed resilience despite ongoing conflicts. As the year unfolded, the world sustained growth, assisted by receding inflation, increased investment, technological advancements and supportive fiscal policies. This was supported by employment and income growth due to higher government spending and household consumption. However, there exist risks from potential geopolitical tensions, regional conflicts, slower-than-expected deceleration in core inflation and persistently high interest rates.

THE INDIA STORY

India's growth story stayed steady this year. We climbed the ranks to become the world's fifth-largest economy by nominal GDP and third-largest by purchasing power parity. India grew at a rate of 7.6% during the year, up from 7.0% in FY 2022-23, with consumption growing at a modest 3 percent. Significant focus has been placed on infrastructure investment which is a crucial driver of overal economic growth. Initiatives like the National Infrastructure Pipeline (NIP), introduced in 2019, emphasise projects in energy, roads, railways and urban development worth 711.11 Lakh Crores.

The year ahead looks promising, with the Reserve Bank of India (RBI) forecasting momentum in manufacturing and services sectors, strengthened private consumption, rising discretionary spending and improved income levels. Credit growth and private investment are expected to rise, fuelled by optimistic business and consumer sentiments. Robust corporate and bank balance sheets are also prompting renewed confidence in private capital expenditure.

RESURGENCE OF THE INDIAN HOSPITALITY SECTOR

With the global hospitality industry continuing to grow, international tourist arrivals are on the rise, indicating a strong demand for quality hospitality services. This trend holds for the Indian hospitality and tourism sectors, which have experienced a significant increase in international arrivals.

The Indian government has extended its support through several initiatives, including easing visa restrictions, providing financial aid, and launching promotiona campaigns such as 'Swadesh Darshan' and 'Dekho Apna Desh'to improve tourism infrastructure and accessibility. The electronic visa system now covers almost every country, boosting tourism further.

The domestic hospitality industry anticipates an exceptional period as premium hotel occupancy rates are expected to reach decadal highs of 70-72% in FY 2023-24 and FY 2024-25, with Average Room Rates (ARRs) rising to 77,200-7,400 in FY 2023-24 and 77,800-8,000 in FY 2024-25. Digitisation has played a pivotal role in the industry's recovery with technology adoption, including contactless check-ins and digital payments.

The sector's future looks bright, driven by improved connectivity, increasing middle-income households, demand for premium products and services and the rise of niche tourism segments of wildlife, spirituality and the ever growing wedding segment. Ongoing infrastructure projects and a rise in demand suggest a long, sustained growth period for Indian hospitality, with branded rooms' demand outpacing supply.

With a distinctive and impressive collection of hotels, resorts and cruisers, we are poised to capitalise on India's burgeoning luxury market. Our reputation for delivering superior quality and unforgettable experiences for our guests, combined with strong returns for our shareholders, will enable us to achieve continued success in the sector.

SUSTAINABILITY

As a leader in the Indian hospitality industry, we take pride in collaborating with leading consultants to develop sustainability targets that will drive improvements across ESG metrics, through initiatives such as energy recovery systems and renewable energy use. We have created a safe and encouraging environment for our employees to ensure their personal and professional development. Furthermore, our engagement with charitable causes across the country has led to numerous tangible outcomes, generating positive results for local communities. Guided by our governance framework, we ensure continuous stakeholder engagement and long term success by promoting responsible practices and inclusive decision making.

I would like to express my sincerest gratitude to every member of our organisation for their dedication and commitment to the pursuit excellence. Our efforts have delivered an exceptional and authentic hospitality experience for our guests that is synonymous with our company's unique history and reputation. With India's thriving economy presenting a promising backdrop for our expansion, our company is well placed to achieve growth, success and leadership as a premium hospitality player.

Thank you for your continued support and trust.

Yours sincerely,

Arjun Singh Oberoi