Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Hotels: Idle assets sale drives 3QFY01 net - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 29, 2001

    Indian Hotels: Idle assets sale drives 3QFY01 net

    Indian Hotels Company Ltd (IHCL), India's largest hotel chain has reported a 21% growth in its net profit for 3QFY01 to Rs 402 m as compared to Rs 333 m for 3QFY00. This was driven by a 10% increase in operating profits and a large jump in other income for the quarter.

    (Rs m) 3QFY00 3QFY01 Change 9m FY00 9m FY01 Change
    Sales 1,712 1,946 13.7% 4,167 4,779 14.7%
    Other Income 7 55 701.5% 188 159 -15.4%
    Expenditure 1,187 1,369 15.3% 3,150 3,560 13.0%
    Operating Profit (EBDIT) 525 577 9.9% 1,017 1,219 19.9%
    Operating Profit Margin (%) 30.7% 29.7%   24.4% 25.5%  
    Interest 54 67 23.2% 102 225 119.5%
    Depreciation 86 113 32.2% 270 331 22.3%
    Profit before Tax 392 452 15.2% 832 823 -1.1%
    Other Adjustments 0 10   0 14  
    Tax 59 40 -32.9% 100 47 -52.9%
    Profit after Tax/(Loss) 333 402 20.7% 732 762 4.1%
    Net profit margin (%) 19.4% 20.6%   17.6% 15.9%  
    No. of Shares (eoy) (m) 45.1 45.1        
    Diluted number of shares 45.1 45.1        
    Diluted Earnings per share* 29.5 35.6        

    IHCL's sales grew by 13.7% YoY during the 3QFY01 due to higher occupancy rates in its metro city hotels. The company's average room rates for this period are also likely to be up as the company had revised its room tariffs by 5%-10% at its metro based hotels in October 2000.

    Its other income for the 3QFY01 includes profit on sale of idle assets to the tune of Rs 46.7 m. The company was keen to sell of a part of its 17-acre plot of vacant land in North Mumbai. The company had purchased this property around 20 years back. We assume the company has sold part of this plot in the 3QFY01.

    As IHCL has no intention of opening a hotel in North Mumbai due to the oversupply gaining momentum there, the gains from the sale of this property will definitely boost the company's cash flows and help the company pump in funds for future expansions elsewhere.

    On the operating level the company has not reported a large jump YoY mainly due to ongoing renovations at its hotels in Mumbai, Delhi and Calcutta in 3QFY01. This has resulted in a drop in its margins by 100 basis points to 29.7% in 3QFY01.

    Though this may not seem very encouraging we feel the company's newly renovated hotel in Mumbai (which contributes to 36% of IHCL's profits) will drive its future earnings growth and is well equipped to meet the increasing competition in Mumbai city. This strategy of renovations in the current year will pay off in the long run, though it has strained its short-term profits.

    On the whole IHCL's profit is slightly lower than our expectations. This is mainly due to lower numbers on the operating level in the 3QFY01. For the full year (FY01E) we have forecast a net of Rs 1,177 m.. However we will maintain our full year numbers at the same level as IHCL has gained through profit on sale of assets.

    On the current price of Rs 255 it is trading at 9.8x FY01 EPS of Rs 26.1.



    Equitymaster requests your view! Post a comment on "Indian Hotels: Idle assets sale drives 3QFY01 net ". Click here!


    More Views on News

    Indian Hotels: Domestic Operations Performs Well (Quarterly Results Update - Detailed)

    Oct 17, 2016

    Indian Hotels has reported a 5.6% YoY increase in the consolidated topline and a consolidated loss of Rs 1,695 m for 1QFY17.

    Indian Hotels: On the Slow Road to Recovery (Quarterly Results Update - Detailed)

    Jul 4, 2016

    Indian Hotels has reported a 9.6% YoY increase in the consolidated topline and a consolidated loss of Rs 605 m for FY2016.

    Indian Hotels: Recovery Still Far Away (Quarterly Results Update - Detailed)

    Mar 28, 2016

    Indian Hotels has reported a 13.2% YoY increase in the consolidated topline and a standalone net profit of Rs 1.2 m for the quarter ended December 2015.

    Indian Hotels: A good operating performance (Quarterly Results Update - Detailed)

    Nov 24, 2015

    Indian Hotels has reported a 13.2% YoY increase in the standalone topline and a standalone net profit of Rs 1.2 m for the quarter ended September 2015.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 17, 2017 03:37 PM


    • Track your investment in THE INDIAN HOTELS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Detailed Quarterly Results With Charts