LEMON TREE HOTELS 2021-22 Annual Report Analysis

Wed, 24 Aug

LEMON TREE HOTELS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

LEMON TREE HOTELS Income Statement Analysis

• Operating income during the year rose 59.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 86.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.4% in FY22 as against 24.3% in FY21.
• Depreciation charges decreased by 3.0% and finance costs decreased by 5.0% YoY, respectively.
• Other income grew by 16.5% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 72.5% in FY21 to 34.4% in FY22.

LEMON TREE HOTELS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,517	4,022	59.8%
Other income	Rs m	220	256	16.5%
Total Revenues	Rs m	2,737	4,279	56.3%
Gross profit	Rs m	613	1,140	86.1%
Depreciation	Rs m	1,076	1,043	-3.0%
Interest	Rs m	1,905	1,809	-5.0%
Profit before tax	Rs m	-2,147	-1,456	NA
Tax	Rs m	-322	-72	NA
Profit after tax	Rs m	-1,825	-1,384	NA
Gross profit margin	%	24.3	28.4
Effective tax rate	%	15.0	5.0
Net profit margin	%	-72.5	-34.4

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LEMON TREE HOTELS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 3 billion as compared to Rs 3 billion in FY21, thereby witnessing an decrease of -14.5%.
• Long-term debt stood at Rs 16 billion as compared to Rs 15 billion during FY21, a growth of 2.6%.
• Current assets fell 43% and stood at Rs 1 billion, while fixed assets fell 3% and stood at Rs 35 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 36 billion as against Rs 38 billion during FY21, thereby witnessing a fall of 5%.

LEMON TREE HOTELS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	9,176	8,312	-9.4
Current Liabilities	Rs m	2,963	2,533	-14.5
Long-term Debt	Rs m	15,135	15,535	2.6
Total Liabilities	Rs m	37,782	35,890	-5.0
Current assets	Rs m	2,302	1,310	-43.1
Fixed Assets	Rs m	35,479	34,580	-2.5
Total Assets	Rs m	37,782	35,890	-5.0

LEMON TREE HOTELS Cash Flow Statement Analysis

• LEMON TREE HOTELS's cash flow from operating activities (CFO) during FY22 stood at Rs 1 billion, an improvement of 229.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -454 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -732 million from the Rs 866 million net cash flows seen during FY21.

LEMON TREE HOTELS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	410	1,353	229.9%
Cash Flow from Investing Activities	Rs m	-656	-454	-
Cash Flow from Financing Activities	Rs m	1,112	-1,630	-
Net Cash Flow	Rs m	866	-732	-

Current Valuations for LEMON TREE HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.8, an improvement from the EPS of Rs -2.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 68.0, stands at -82.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 13.4 times.
• The company's price to cash flow (P/CF) ratio stood at -114.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	3.2	5.1
TTM Earnings per share	Rs	-2.3	-1.8
Diluted earnings per share	Rs	-2.3	-1.7
Price to Cash Flow	x	-39.2	-114.7
TTM P/E ratio	x	-16.1	-82.4
Price / Book Value ratio	x	2.7	4.7
Market Cap	Rs m	24,997	39,046
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for LEMON TREE HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.5x during FY22, from 0.8x during FY21. 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 0.2x during FY22, from -0.1x during FY21. 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 -16.6% during FY22, from -19.9% during FY22. 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 1.5% during FY22, from -1.0% during FY21. 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 1.2% during FY22, from 0.2% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.8	0.5
Debtors’ Days	Days	447	264
Interest coverage	x	-0.1	0.2
Debt to equity ratio	x	1.6	1.9
Return on assets	%	0.2	1.2
Return on equity	%	-19.9	-16.6
Return on capital employed	%	-1.0	1.5

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 38.7 to Rs 68.0, registering a gain of Rs 29.3 or around 75.7%.

Overall, the S&P BSE SENSEX is up 6.4% 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