Indian Hotels: Bucks industry trend - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Indian Hotels: Bucks industry trend

Jul 27, 2001

The Indian Hotels Company Ltd (IHCL), India's largest hotel chain has reported a 31% YoY decline in its 1QFY02 net profit to Rs 121 m, which was driven down mainly by higher provisions and amortisation expenses. However, the company’s sales during this period grew by 12.5% YoY and its operating profit was up by 15.7% YoY.

(Rs m)1QFY011QFY02Change
Sales 1,404 1,580 12.5%
Other Income 41 52 26.2%
Expenditure 1,065 1,188 11.6%
Operating Profit (EBDIT) 339 392 15.7%
Operating Profit Margin (%)24.2%24.8% 
Interest 72 123 71.2%
Depreciation 108 123 13.8%
Profit before Tax200 198 -1.2%
Extraordinary items- 58 -
Tax 26 20 -25.2%
Profit after Tax/(Loss) 174 121 -30.6%
Net profit margin (%)12.4%7.6% 
No. of Shares (eoy) (m) 45.1 45.1  
Diluted number of shares 45.1 45.1  
Diluted Earnings per share*15.410.7 
*(annualised)   

The growth in sales is the beneficial impact of the company's renovations at its prime hotels in FY01, resulting in higher revenues. As a result, IHCL has managed to buck the industry trend of declining sales due to occupancy rates being under pressure. The 1QFY02 has been tough for the hotel industry due to the domestic economic slowdown as well as slowdown in traffic from the US. To add to this, new room supply in the metro cities is catching up. In the light of the above this performance is creditable.

Despite better operating margins, the company's profit before tax declined by 1% YoY in 1QFY02 mainly due to the impact of higher interest and depreciation costs. The interest costs rose sharply by 71% YoY and depreciation costs by 13.8% YoY, as IHCL spent substantial amount on renovations, strategic investments and financial restructuring of few of its associate companies.

IHCL's net profit would have declined marginally had it not been for the extraordinary expenses in relation to provisions and contingencies on account of deferred taxes to the tune of Rs 33.2 m and amortisation of VRS expenses of Rs 24.3 m. As a result the company's profit after tax fell by 31% YoY.

Due to regrouping of certain figures in 1QFY01, IHCL has now reported a net profit of Rs 148 m for 1QFY01, as compared to Rs 174 m reported previously for 1QFY01. However as the detailed break up is not available we continue to give their previously reported figures in the table above.

On the current price of Rs 199, it is trading at 7.7x FY01 EPS of Rs 25.9. This is low compared to its past price to earnings multiple of 20-25x.

Equitymaster requests your view! Post a comment on "Indian Hotels: Bucks industry trend". Click here!

  

More Views on News

INDIAN HOTELS 2020-21 Annual Report Analysis (Annual Result Update)

Sep 6, 2021 | Updated on Sep 6, 2021

Here's an analysis of the annual report of INDIAN HOTELS for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of INDIAN HOTELS. Also includes updates on the valuation of INDIAN HOTELS.

Revenge Travel is Here. 9 Stocks Likely to Benefit (Views On News)

Sep 4, 2021

The term 'revenge travel' refers to the desire of going on a vacation after an extended period of lockdown.

Indian Hotels Q4 Review: Reports Net Loss, Revenue from Operations Decline (Views On News)

May 3, 2021

Key takeaways from Indian Hotels Q4FY21 results.

Why Did Shares of Jubilant FoodWorks Rally Today? (Views On News)

Jun 16, 2021

The company sees a 90% recovery despite minimal dine-ins.

Why Did Burger King India Shares Plunge 7% Yesterday? (Views On News)

May 28, 2021

Key takeaways from Burger King India Q4FY21 results.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

INDIAN HOTELS SHARE PRICE


Nov 30, 2021 (Close)

TRACK INDIAN HOTELS

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

INDIAN HOTELS 8-QTR ANALYSIS

COMPARE INDIAN HOTELS WITH

MARKET STATS