EIH lifts capex guidance 40%, flags Kolkata hotel delays
The Oberoi Hotels parent will spend ₹600-700 cr annually on expansion, up from ₹400-500 cr. Q4 margins slipped as flight services ate into profitability.
— 1 earlier story on EIH Ltd. →What's new
- EIH raised its two-year capex guidance to ₹600-700 cr annually, up from a prior ₹400-500 cr estimate.
- The Oberoi Grand Kolkata renovation has hit unforeseen structural problems that may delay its 2027 partial opening.
- Q4 margins compressed on higher maintenance costs and a bigger contribution from the lower-margin flight services business.
Why this matters
A 40% jump in capex without a clearer cost breakdown is a red flag for free-cash-flow forecasts. Add the Kolkata renovation uncertainty and Q4 margin slip, and the gap between record headline EBITDA and underlying profitability is widening.
What we're watching
- Management's explanation for the capex increase.
- Any revised timeline for the Oberoi Grand Kolkata reopening.
- How flight-services mix affects FY25-26 margins.
The full read
EIH's annual capex is jumping to ₹600-700 cr from a prior ₹400-500 cr guidance, a 40% increase over the next two years. The company is funding expansion in Goa and Bangalore but offered little detail on the cost inflation driving the rise. The spending comes even as Q4 margins came under pressure. A shift toward the lower-margin flight services segment, combined with higher maintenance expenses, weighed on profitability even as the company posted record full-year EBITDA. Meanwhile, the flagship Oberoi Grand Kolkata renovation has uncovered unforeseen structural problems that could delay its 2027 partial opening. Management also quietly revised how it discusses the Mashobra legal issue, moving from a one-time-loss framing to a normalization against past gains. There is no FY27 revenue guidance yet. The headline EBITDA is strong. The trajectory of margins and the capex bill are not.
Questions answered
- Why did EIH increase its annual capex guidance so sharply?
- Management cited ongoing expansion projects in Goa and Bangalore but gave no specific breakdown for the increase. The revision from ₹400-500 cr to ₹600-700 cr was announced on the recent conference call without detailed justification.
- What structural issues were found at the Oberoi Grand Kolkata?
- During the ongoing major renovation, the company discovered unforeseen remedial requirements. Management flagged this as a structural risk that could impact the hotel's partial opening planned for 2027.
- How did flight services affect Q4 profitability?
- The segment has lower margins than the core hotel business. Its higher contribution to Q4 revenue, combined with increased maintenance costs, pressured overall EBITDA margins despite the company reporting record full-year EBITDA.
- What was the change in narrative around the Mashobra legal issue?
- Management shifted from calling it a one-time loss to framing it as a normalization against prior fair value gains. This change affects how historical performance should be modeled.
Story so far
All notes on EIHOTEL →- 29 May 2026 · 1:56 PM IST EIH lifts capex guidance 40%, flags Kolkata hotel delays
- 4d ago EIH profit drops 14.6% as one-time charges hit FY26 results