INDIAN HOTELS 2017-18 Annual Report Analysis

Sat, 31 Mar

INDIAN HOTELS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

INDIAN HOTELS Income Statement Analysis

• Operating income during the year rose 2.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.9% in FY18 as against 14.9% in FY17.
• Depreciation charges increased by 0.6% and finance costs decreased by 16.0% YoY, respectively.
• Other income grew by 13.3% YoY.
• Net profit for the year declined by 176.0% YoY.
• Net profit margins during the year grew from 2.1% in FY17 to 1.5% in FY18.

INDIAN HOTELS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	40,206	41,036	2.1%
Other income	Rs m	629	713	13.3%
Total Revenues	Rs m	40,835	41,748	2.2%
Gross profit	Rs m	5,988	6,928	15.7%
Depreciation	Rs m	2,994	3,012	0.6%
Interest	Rs m	3,318	2,786	-16.0%
Profit before tax	Rs m	306	1,843	502.6%
Tax	Rs m	1,137	1,211	6.4%
Profit after tax	Rs m	-832	632	-176.0%
Gross profit margin	%	14.9	16.9
Effective tax rate	%	371.9	65.7
Net profit margin	%	-2.1	1.5

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INDIAN HOTELS Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 14 billion as compared to Rs 18 billion in FY17, thereby witnessing an decrease of -24.2%.
• Long-term debt down at Rs 23 billion as compared to Rs 28 billion during FY17, a fall of 16.5%.
• Current assets rose 32% and stood at Rs 12 billion, while fixed assets rose 6% and stood at Rs 81 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 93 billion as against Rs 86 billion during FY17, thereby witnessing a growth of 8%.

INDIAN HOTELS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	25,177	41,811	66.1
Current Liabilities	Rs m	18,393	13,934	-24.2
Long-term Debt	Rs m	27,899	23,292	-16.5
Total Liabilities	Rs m	85,991	93,144	8.3
Current assets	Rs m	9,263	12,195	31.7
Fixed Assets	Rs m	76,727	80,949	5.5
Total Assets	Rs m	85,991	93,144	8.3

INDIAN HOTELS Cash Flow Statement Analysis

• INDIAN HOTELS's cash flow from operating activities (CFO) during FY18 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 957 million, an improvement of 107% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 665 million from the Rs 15 million net cash flows seen during FY17.

INDIAN HOTELS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	5,345	4,921	-7.9%
Cash Flow from Investing Activities	Rs m	8,550	-5,287	-
Cash Flow from Financing Activities	Rs m	-13,814	957	-
Net Cash Flow	Rs m	15	665	4,395.3%

Current Valuations for INDIAN HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.5, an improvement from the EPS of Rs -0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 127.4, stands at 286.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.3 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 43.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	40.6	34.5
TTM Earnings per share	Rs	-0.8	0.5
Diluted earnings per share	Rs	-0.6	0.4
Price to Cash Flow	x	83.4	43.0
TTM P/E ratio	x	-216.9	286.1
Price / Book Value ratio	x	4.6	3.7
Market Cap	Rs m	114,657	156,751
Dividends per share (Unadj.)	Rs	0.4	0.4

Ratio Analysis for INDIAN HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.5x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 1.7x during FY18, from 1.1x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 1.5% during FY18, from -3.3% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 7.1% during FY18, from 6.8% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 3.7% during FY18, from 2.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.5	0.9
Debtors’ Days	Days	2	3
Interest coverage	x	1.1	1.7
Debt to equity ratio	x	1.1	0.6
Return on assets	%	2.9	3.7
Return on equity	%	-3.3	1.5
Return on capital employed	%	6.8	7.1

To see how INDIAN HOTELS has performed over the last 5 years, please visit here.

INDIAN HOTELS Share Price Performance

Over the last one year, INDIAN HOTELS share price has moved up from Rs 127.0 to Rs 127.4, registering a gain of Rs 0.4 or around 0.3%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for INDIAN HOTELS and quarterly results for INDIAN HOTELS)

Read: Latest Annual Report Analysis of INDIAN HOTELS