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Indian Hotels: A good operating performance - Views on News from Equitymaster
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Indian Hotels: A good operating performance
Nov 24, 2015

The Indian Hotels Company Limited (IHCL) has announced its results for the second quarter of FY16. On a standalone basis, the company has reported 13.2% YoY increase in net sales and a net profit of Rs 1.2 m. Here is our analysis of the results.

Performance summary

  • Net sales for 2QFY16 increased 13.2% YoY. The topline increased 9.6% YoY on a consolidated basis.
  • The standalone operating profit increased 35% YoY. Savings in SG&A costs led to the improved operating margins. The consolidated operating profit was up 77% YoY.
  • The exceptional item relates to certain projects that are no longer being pursued by the company across various geographies.
  • The company reported a net profit of Rs 1.2 m for 2QFY16 on a standalone basis and a loss of Rs 189 m for 1HFY16 on a consolidated basis.

Standalone and Consolidated financials

  Standalone Consolidated
(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 4,157 4,704 13.2% 18,745 20,535 9.6%
Expenditure 3,952 4,427 12.0% 17,794 18,853 5.9%
Operating profit (EBDITA) 205 276 35.0% 950 1,682 77.0%
Operating profit margin (%) 4.9% 5.9%   5.1% 8.2%  
Other income 254 350 37.7% 382 665 74.0%
Finance cost 250 219 -12.2% 905 909 0.4%
Depreciation 295 301 2.2% 1,446 1,500 3.7%
Exceptional Item (47) (103)   (130) 327  
Profit before tax (132) 3   (1,149) 265  
Tax (57) 2   5 247  
Profit after tax/(loss) (76) 1   (1,153) 19  
Minority interest - -   (118) (172)  
Share of profit of associates - -   (54) (36)  
PAT after minority and sh. of assoc. profit (76) 1   (1,325) (189)  
Net profit margin (%) -1.8% 0.0%   -7.1% -0.9%  
No. of shares (m)         807.5  
Diluted earnings per share (Rs)         (14.1)  
P/E ratio (x)*         N.A  

(* On a trailing 12 months basis)

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