INDIAN HOTELS 2019-20 Annual Report Analysis

Tue, 31 Mar

INDIAN HOTELS has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

INDIAN HOTELS Income Statement Analysis

• Operating income during the year fell 1.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.6% in FY20 as against 18.5% in FY19.
• Depreciation charges increased by 23.3% and finance costs increased by 76.1% YoY, respectively.
• Other income grew by 52.2% YoY.
• Net profit for the year grew by 43.4% YoY.
• Net profit margins during the year grew from 5.4% in FY19 to 7.9% in FY20.

INDIAN HOTELS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	45,120	44,631	-1.1%
Other income	Rs m	870	1,324	52.2%
Total Revenues	Rs m	45,990	45,956	-0.1%
Gross profit	Rs m	8,363	10,085	20.6%
Depreciation	Rs m	3,279	4,042	23.3%
Interest	Rs m	1,937	3,411	76.1%
Profit before tax	Rs m	4,017	3,955	-1.5%
Tax	Rs m	1,571	448	-71.5%
Profit after tax	Rs m	2,446	3,508	43.4%
Gross profit margin	%	18.5	22.6
Effective tax rate	%	39.1	11.3
Net profit margin	%	5.4	7.9

INDIAN HOTELS Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 19 billion as compared to Rs 21 billion in FY19, thereby witnessing an decrease of -9.0%.
• Long-term debt stood at Rs 21 billion as compared to Rs 17 billion during FY19, a growth of 26.0%.
• Current assets rose 24% and stood at Rs 14 billion, while fixed assets rose 20% and stood at Rs 100 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 114 billion as against Rs 95 billion during FY19, thereby witnessing a growth of 20%.

INDIAN HOTELS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	43,480	43,568	0.2
Current Liabilities	Rs m	20,895	19,008	-9.0
Long-term Debt	Rs m	16,875	21,258	26.0
Total Liabilities	Rs m	95,143	114,418	20.3
Current assets	Rs m	11,588	14,373	24.0
Fixed Assets	Rs m	83,555	100,045	19.7
Total Assets	Rs m	95,143	114,418	20.3

INDIAN HOTELS Cash Flow Statement Analysis

• INDIAN HOTELS's cash flow from operating activities (CFO) during FY20 stood at Rs 8 billion, an improvement of 15.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -5 billion, an improvement of 29.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -3 billion, an improvement of 23% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 615 million from the Rs -186 million net cash flows seen during FY19.

INDIAN HOTELS Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	7,114	8,235	15.7%
Cash Flow from Investing Activities	Rs m	-3,882	-5,019	-
Cash Flow from Financing Activities	Rs m	-3,433	-2,654	-
Net Cash Flow	Rs m	-186	615	-

Current Valuations for INDIAN HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.9, an improvement from the EPS of Rs 2.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 74.9, stands at 30.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 18.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	37.9	37.5
TTM Earnings per share	Rs	2.1	2.9
Diluted earnings per share	Rs	1.7	2.5
Price to Cash Flow	x	38.3	18.6
TTM P/E ratio	x	89.6	30.3
Price / Book Value ratio	x	3.6	3.2
Market Cap	Rs m	158,445	140,332
Dividends per share (Unadj.)	Rs	0.5	0.5

Ratio Analysis for INDIAN HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY20, from 0.6x during FY19. 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 deteriorated and stood at 2.2x during FY20, from 3.1x during FY19. 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 8.1% during FY20, from 5.6% during FY20. 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 11.4% during FY20, from 9.9% during FY19. 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 6.0% during FY20, from 4.6% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	0.6	0.8
Debtors’ Days	Days	3	2
Interest coverage	x	3.1	2.2
Debt to equity ratio	x	0.4	0.5
Return on assets	%	4.6	6.0
Return on equity	%	5.6	8.1
Return on capital employed	%	9.9	11.4

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 down from Rs 154.4 to Rs 74.9, registering a loss of Rs 79.5 or around 51.5%.

Overall, the S&P BSE SENSEX is down 24.2% 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