LEMON TREE HOTELS 2020-21 Annual Report Analysis

Wed, 31 Mar

LEMON TREE HOTELS has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

LEMON TREE HOTELS Income Statement Analysis

• Operating income during the year fell 62.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 74.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.3% in FY21 as against 36.4% in FY20.
• Depreciation charges increased by 16.6% and finance costs increased by 17.9% YoY, respectively.
• Other income grew by 102.4% YoY.
• Net profit for the year grew by 1657.3% YoY.
• Net profit margins during the year declined from 1.6% in FY20 to 72.5% in FY21.

LEMON TREE HOTELS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	6,694	2,517	-62.4%
Other income	Rs m	109	220	102.4%
Total Revenues	Rs m	6,803	2,737	-59.8%
Gross profit	Rs m	2,434	613	-74.8%
Depreciation	Rs m	922	1,076	16.6%
Interest	Rs m	1,616	1,905	17.9%
Profit before tax	Rs m	5	-2,147	-43,926.3%
Tax	Rs m	109	-322	-396.0%
Profit after tax	Rs m	-104	-1,825	1,657.3%
Gross profit margin	%	36.4	24.3
Effective tax rate	%	2,220.0	15.0
Net profit margin	%	-1.6	-72.5

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LEMON TREE HOTELS Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 3 billion as compared to Rs 3 billion in FY20, thereby witnessing an decrease of -2.1%.
• Long-term debt stood at Rs 15 billion as compared to Rs 15 billion during FY20, a growth of 4.3%.
• Current assets rose 56% and stood at Rs 2 billion, while fixed assets fell 2% and stood at Rs 35 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 38 billion as against Rs 38 billion during FY20, thereby witnessing a growth of 1%.

LEMON TREE HOTELS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	9,889	9,176	-7.2
Current Liabilities	Rs m	3,028	2,963	-2.1
Long-term Debt	Rs m	14,509	15,135	4.3
Total Liabilities	Rs m	37,584	37,782	0.5
Current assets	Rs m	1,473	2,302	56.3
Fixed Assets	Rs m	36,055	35,413	-1.8
Total Assets	Rs m	37,584	37,782	0.5

LEMON TREE HOTELS Cash Flow Statement Analysis

• LEMON TREE HOTELS's cash flow from operating activities (CFO) during FY21 stood at Rs 410 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -656 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 1 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 866 million from the Rs 94 million net cash flows seen during FY20.

LEMON TREE HOTELS Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	1,510	410	-72.8%
Cash Flow from Investing Activities	Rs m	-6,082	-656	-
Cash Flow from Financing Activities	Rs m	4,567	1,112	-75.6%
Net Cash Flow	Rs m	94	866	819.7%

Current Valuations for LEMON TREE HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -2.3, an decline from the EPS of Rs -0.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 37.1, stands at -16.1 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 11.6 times.
• The company's price to cash flow (P/CF) ratio stood at -33.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	8.5	3.2
TTM Earnings per share	Rs	-0.1	-2.3
Diluted earnings per share	Rs	-0.1	-2.3
Price to Cash Flow	x	21.3	-33.3
TTM P/E ratio	x	-167.8	-16.1
Price / Book Value ratio	x	4.5	2.7
Market Cap	Rs m	44,356	24,997
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for LEMON TREE HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY21, from 0.5x during FY20. 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 -0.1x during FY21, from 1.0x during FY20. 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 declined and down at -19.9% during FY21, from -1.1% during FY21. 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 declined and down at -1.0% during FY21, from 6.6% during FY20. 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 declined and down at 0.2% during FY21, from 4.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	0.5	0.8
Debtors’ Days	Days	274	447
Interest coverage	x	1.0	-0.1
Debt to equity ratio	x	1.5	1.6
Return on assets	%	4.0	0.2
Return on equity	%	-1.1	-19.9
Return on capital employed	%	6.6	-1.0

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

LEMON TREE HOTELS Share Price Performance

Over the last one year, LEMON TREE HOTELS share price has moved up from Rs 22.0 to Rs 37.1, registering a gain of Rs 15.1 or around 68.6%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of LEMON TREE HOTELS