LEMON TREE HOTELS 2022-23 Annual Report Analysis

Thu, 7 Sep

LEMON TREE HOTELS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

LEMON TREE HOTELS Income Statement Analysis

• Operating income during the year rose 117.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 274.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 51.3% in FY23 as against 29.8% in FY22.
• Depreciation charges decreased by 7.4% and finance costs increased by 0.8% YoY, respectively.
• Other income declined by 58.3% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 34.1% in FY22 to 16.1% in FY23.

LEMON TREE HOTELS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,022	8,750	117.5%
Other income	Rs m	210	88	-58.3%
Total Revenues	Rs m	4,232	8,837	108.8%
Gross profit	Rs m	1,197	4,484	274.6%
Depreciation	Rs m	1,043	966	-7.4%
Interest	Rs m	1,809	1,823	0.8%
Profit before tax	Rs m	-1,446	1,782	NA
Tax	Rs m	-72	377	NA
Profit after tax	Rs m	-1,374	1,405	NA
Gross profit margin	%	29.8	51.3
Effective tax rate	%	5.0	21.2
Net profit margin	%	-34.1	16.1

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LEMON TREE HOTELS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 4 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 46.1%.
• Long-term debt down at Rs 15 billion as compared to Rs 16 billion during FY22, a fall of 2.3%.
• Current assets rose 4% and stood at Rs 1 billion, while fixed assets rose 3% and stood at Rs 36 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 37 billion as against Rs 36 billion during FY22, thereby witnessing a growth of 3%.

LEMON TREE HOTELS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	8,312	8,537	2.7
Current Liabilities	Rs m	2,533	3,701	46.1
Long-term Debt	Rs m	15,535	15,174	-2.3
Total Liabilities	Rs m	35,890	36,958	3.0
Current assets	Rs m	1,310	1,360	3.9
Fixed Assets	Rs m	34,580	35,598	2.9
Total Assets	Rs m	35,890	36,958	3.0

LEMON TREE HOTELS Cash Flow Statement Analysis

• LEMON TREE HOTELS's cash flow from operating activities (CFO) during FY23 stood at Rs 4 billion, an improvement of 184.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 523.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion, an improvement of 19% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -306 million from the Rs -732 million net cash flows seen during FY22.

LEMON TREE HOTELS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	1,353	3,849	184.4%
Cash Flow from Investing Activities	Rs m	-454	-2,832	-
Cash Flow from Financing Activities	Rs m	-1,630	-1,323	-
Net Cash Flow	Rs m	-732	-306	-

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 -1.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 110.7, stands at 57.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.3 times, while the price to sales ratio stands at 10.0 times.
• The company's price to cash flow (P/CF) ratio stood at 26.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	5.1	11.1
TTM Earnings per share	Rs	-1.7	1.8
Diluted earnings per share	Rs	-1.7	1.8
Price to Cash Flow	x	-152.4	26.0
TTM P/E ratio	x	-36.3	57.1
Price / Book Value ratio	x	4.7	7.2
Market Cap	Rs m	39,046	61,547
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 0.4x during FY23, from 0.5x during FY22. 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 2.0x during FY23, from 0.2x during FY22. 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 16.5% during FY23, from -16.5% during FY23. 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 15.2% during FY23, from 1.5% during FY22. 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 8.7% during FY23, from 1.2% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	0.5	0.4
Debtors’ Days	Days	264	234
Interest coverage	x	0.2	2.0
Debt to equity ratio	x	1.9	1.8
Return on assets	%	1.2	8.7
Return on equity	%	-16.5	16.5
Return on capital employed	%	1.5	15.2

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 76.2 to Rs 110.7, registering a gain of Rs 34.5 or around 45.3%.

Overall, the S&P BSE SENSEX is up 11.2% over the year.

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