EIH hit by general slowdown, high GST

Hospitality major EIH Ltd is hit by general slowdown and high Goods and Services Tax (GST), a top company official said on Wednesday.

The company which comes under The Oberoi Group said it has Rs 84.5 crore dues from the grounded Jet Airways.

"The drop in revenue and profitability in the first quarter of the current year is attributable to a general slowdown in business activity, decline in air travel and a reduction in the airline catering business," EIH executive vice-chairman S S Mukherjee said at the company's 69th AGM here.

He chaired the AGM in absence of EIH executive chairman PRS Oberoi.

 

In the Q1FY'20, the company posted consolidated revenue of Rs 358.22 crore as compared to Rs 400.35 crore registered in the same quarter last year.

Voicing concern on GST, Mukherjee said, "We continue to be impacted adversely by GST for published tariffs for hotel rooms charging Rs 7,500 and above. Much lower rates between 6 per cent to 10 per cent in other Asian countries such as China, Thailand and Malaysia will take leisure away from India."

He hoped the government will ease GST rate to at least 12 per cent from existing 18 per cent and called for immediate steps to attract travellers from China that accounts for 20 per cent of tourism proceeds worldwide.

EIH MD & CEO Vikram Oberoi said credit to corporates is a normal practice and they had long-standing business relationship with Jet Airways.

The company has dues of Rs 84.5 crore from Jet and the hotels major was following it up for recovery of the dues, Oberoi said.

"We have reduced our debt from Rs 527 crore to Rs 432 crore and will reduce it further," he said replying to a question from the shareholders.

Reliance Industries non-executive director Nita Ambani was present at the AGM as a director of the EIH.

Reliance holds about 18.5 per cent stake in EIH Ltd and there is speculation that the company may hike its shareholding.

Ambani did not take any question after the AGM to clear the air.