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 analyst meet update - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 30, 2001

    Indian Hotels analyst meet update

    Indian Hotels Company Ltd (IHCL) held an analyst meet yesterday shortly after the results. The analyst meet dealt primarily with the company's results and its ongoing renovations and future planned projects.

    The highlights of the meeting are:

    • The main drivers to the company's rise in operating profits in the 3QFY01 was higher occupancy rates and higher room rates at its luxury metro based hotels and its leisure hotels division. However, the business hotels division which consists of first class business hotels in secondary cities saw lower occupancy and average room rates during this period.

    • For 3QFY01, IHCL reported an occupancy rate of 70% for itís luxury hotel division an improvement of 400 basis points YoY. The encouraging factor here is that finally average room rates at its luxury hotels have showed a positive growth after a period of 5 years. This change in trend highlights the improvement in the hotel sector, as these hotels account for 85% of the company's bottomline.

    • The company's operating margins dipped by 100 basis points in 3QFY01 to 29.7%. This was primarily due to higher staff costs and higher lease fees for its hotel in Delhi, the Taj Mahal. Staff costs are up primarily due to a wage settlement in the current financial year at its key properties in Mumbai, Delhi and Calcutta. Besides the company's bonus settlement of the previous year as well as for the current year to the tune of Rs 30 m was paid in the current financial year itself.

    • The company's tax outgo has reduced in 3QFY01 as the company is getting the tax benefit of its VRS expense of Rs 360 m in the current financial year. The company will however be amortising the cost of the VRS over a period of 72 months. The company will gain from annual pre-tax savings of Rs 180 m per annum from this VRS due to reduction in staff costs.

    • The company has managed to control its food and beverage costs due to lower raw material expenses in the 3QFY01. Food and beverage costs as a percentage of food and beverage income has reduced by 1% in this quarter.

    • The company's other income went up primarily due to sale of its idle assets. This idle asset is a piece of land at Andheri, Mumbai. The company realised Rs 46.7 m from the sale of this asset. The company clarified that it has not sold off its 17 acre plot in Sahar, Mumbai near the international airport. It however stated that it had dropped plans of opening a hotel on this plot as North Mumbai would face a lot of competition. The company has stated that it will continuously try and sell off idle assets in the subsequent quarters too.

    • The company has budgeted a Rs 380 m renovation programme for the current financial year. Of this Rs 120 m would be spent for Mumbai, Rs 110 m for its Delhi hotel and Rs 120 m for its Calcutta hotel.

    • The company is in the process of consolidating its accounts, which is expected to substantially add to its bottomline. The company is also restructuring its international operations so as to increase accountability to shareholders of IHCL.

    On the whole, though IHCL's results maybe lower than market expectations, we feel that the company has shown considerable improvement in its topline. The benefits of this is not being felt primarily due to higher expenses related to renovation and operations. We feel that in FY2002 the company's margins will be considerably better as some of the costs would stand reduced.

    On the current price of Rs 247 it is trading at 9.5x FY01 EPS of Rs 26.1.



    Equitymaster requests your view! Post a comment on "Indian Hotels analyst meet update". 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 16, 2017 (Close)


    • 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



    Compare Company With Charts