THE INDIAN HOTELS 2019-20 Annual Report Analysis

Tue, 1 Dec

THE 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.

THE 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 16.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.7% in FY20 as against 18.4% in FY19.
• Depreciation charges increased by 23.3% and finance costs increased by 79.4% YoY, respectively.
• Other income grew by 58.8% YoY.
• Net profit for the year grew by 22.8% YoY.
• Net profit margins during the year grew from 6.4% in FY19 to 7.9% in FY20.

THE 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	834	1,324	58.8%
Total Revenues	Rs m	45,954	45,956	0.0%
Gross profit	Rs m	8,297	9,675	16.6%
Depreciation	Rs m	3,279	4,042	23.3%
Interest	Rs m	1,901	3,411	79.4%
Profit before tax	Rs m	3,951	3,546	-10.3%
Tax	Rs m	1,571	448	-71.5%
Profit after tax	Rs m	2,961	3,637	22.8%
Gross profit margin	%	18.4	21.7
Effective tax rate	%	39.8	12.6
Net profit margin	%	6.4	7.9

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THE 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 27% and stood at Rs 83 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 115 billion as against Rs 96 billion during FY19, thereby witnessing a growth of 20%.

THE 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	95,838	115,183	20.2
Current assets	Rs m	11,588	14,373	24.0
Fixed Assets	Rs m	65,384	83,029	27.0
Total Assets	Rs m	95,838	115,183	20.2

THE INDIAN HOTELS Cash Flow Statement Analysis

• THE 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.

THE 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 THE INDIAN HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.1, an improvement from the EPS of Rs 2.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 120.0, stands at -42.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 3.1 times.
• The company's price to cash flow (P/CF) ratio stood at 12.8 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	2.5	3.1
Diluted earnings per share	Rs	3.7	4.5
Price to Cash Flow	x	24.9	12.8
TTM P/E ratio	x	-63.1	-42.8
Price / Book Value ratio	x	3.6	3.2
Market Cap	Rs m	142,652	96,856
Dividends per share (Unadj.)	Rs	0.5	0.5

Ratio Analysis for THE 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 2.0x 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 8.3% during FY20, from 6.8% 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 11.6% during FY20, from 10.7% 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 6.1% during FY20, from 5.1% 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	26	24
Interest coverage	x	3.1	2.0
Debt to equity ratio	x	0.4	0.5
Return on assets	%	5.1	6.1
Return on equity	%	6.8	8.3
Return on capital employed	%	10.7	11.6

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

THE INDIAN HOTELS Share Price Performance

Over the last one year, THE INDIAN HOTELS share price has moved down from Rs 149.6 to Rs 120.0, registering a loss of Rs 29.7 or around 19.8%.

Overall, the S&P BSE SENSEX is up 9.1% over the year.

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