India’s Mahindra Holidays’ Q2 profit nearly halves

BENGALURU (Reuters) – Mahindra Holidays and Resorts India posted a 47.8% drop in second-quarter profit on Monday, dragged down by its European business and higher expenses.

The hospitality chain, which runs the ‘Club Mahindra’ brand of resorts, said its consolidated net profit fell to 213.4 million rupees ($2.57 million) for the quarter ended Sept. 30, from 408.6 million rupees a year earlier.

Its European segment – called Holiday Club Resorts Oy (HCR), comprising nearly half of the topline – reported a loss before tax of 23.1 million rupees, compared with a profit of 10.2 million rupees a year earlier.

This compares to a loss before tax of 365.2 million rupees in its European operations in the first quarter.

The European business took a hit during the September-quarter as people cut back on leisure travel amid rising costs of living and higher inflation.

Total expenditure jumped 10.7%, which outpaced a 9.5% rise in revenue to 6.55 billion rupees. The company also flagged a one-off expense of 68 million rupees.

Additionally, heavy rains and landslides in the states of Himachal Pradesh and Uttarakhand affected resort occupancy, which fell to 77% from 79% a year ago, the company said.

Shares of the hospitality firm fell as much as 10.8% after the results. The stock advanced 32% in the September-quarter.

($1 = 83.1380 Indian rupees)

(Reporting by Anisha Ajith in Bengaluru; Editing by Sonia Cheema)