X

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 Company - always ahead - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jul 8, 2000

    Indian Hotels Company - always ahead

    Indian Hotels Company Ltd (IHCL) has always been way ahead of its peers. While all other hotel companies had mainly concentrated on opening hotels in metro cities, this company thought way ahead of others. They were the first to open hotels in leisure destinations like in Goa and Rajasthan and also the first to introduce the concept of " business hotels", a rung lower than the upmarket luxury metro hotels.

    IHCL, India's largest hotel chain reported an operating income of Rs 5,913 m in FY2000. It currently operates 48 hotels in India under the "Taj" brand. The company's operations have been regrouped under five strategic business units: Luxury Hotels Division, Business Hotels Division, Leisure Hotels Division, Air Catering Services and the International Operations Division.

    For a developing country like India they realised years ago that secondary cities too would expand and leisure holidays would pick up, hence they were proactive in setting up hotels here. This strategy has paid off, as with room tariffs hitting the roof in metro city hotels travellers are looking for "value for money" alternatives.

    The hotels set up in these destinations 15-20 years ago may not have been profitable for the company in the past. However as they have low capital costs, and demand is currently very strong for these segments these hotels could turn into profitable money spinners.

    To further its presence in the business hotel segment the company has recently acquired hotels and entered into management tie-ups in Pune, Hyderabad and Ahmedabad. Its future strategy entails maximum expansion in this segment. For its luxury hotels in metro cities the company is undertaking a major refurbishment exercise. Through this they plan to give the hotels a new look and introduce trendy and innovative dining concepts. The company's thrust is also going to be on food and beverage in future. Though this business commands lower margins than room revenues, it protects the company's bottomline when occupancy rates are weak in metro hotels.

    India's second largest hotel chain EIH Ltd too has started following in IHCL's footsteps. They too are planning to open business hotels in secondary cities and have also become aggressive on the leisure hotel market. However IHCL will continue to enjoy the benefits of lower capital costs, established brand and a larger hotel network across the country.

    Occupancy rates are accepted to pick up in the current year due to improvement in the economic scenario and the political stability. Infact the trend for the last few months shows that occupancy rates are improving in the metro hotels.

    IHCL will benefit from this and its bottomline is expected to show an improvement from the current year. On valuation terms, Indian Hotels Company Ltd is trading at a price to earnings multiple of 8.8x on FY2000 earnings. This is low as compared to multiples of 20x-25x it traded at few years ago and negativity's facing the hotel industry all seem to be in the price.

     

     

    Equitymaster requests your view! Post a comment on "Indian Hotels Company - always ahead". 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.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    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...

    More
    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

    THE INDIAN HOTELS SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK THE INDIAN HOTELS

    • 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

    MORE ON THE INDIAN HOTELS

    THE INDIAN HOTELS 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE THE INDIAN HOTELS WITH

    MARKET STATS