ROYAL ORCHID HOTELS 2017-18 Annual Report Analysis

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ROYAL ORCHID HOTELS 2017-18 Annual Report Analysis
Mon, 7 Jan

ROYAL ORCHID HOTELS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

ROYAL ORCHID HOTELS Income Statement Analysis

  • Operating income during the year rose 8.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 55.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.5% in FY18 as against 10.8% in FY17.
  • Depreciation charges decreased by 1.9% and finance costs decreased by 5.0% YoY, respectively.
  • Other income declined by 30.0% YoY.
  • Net profit for the year declined by 152.9% YoY.
  • Net profit margins during the year grew from 2.4% in FY17 to 1.2% in FY18.

ROYAL ORCHID HOTELS Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 1,749 1,895 8.3%
Other income Rs m 128 89 -30.0%
Total Revenues Rs m 1,876 1,984 5.7%
Gross profit Rs m 189 294 55.0%
Depreciation Rs m 161 158 -1.9%
Interest Rs m 155 147 -5.0%
Profit before tax Rs m 1 78 6,963.6%
Tax Rs m 47 68 45.8%
Profit after tax Rs m -46 24 -152.9%
Gross profit margin % 10.8 15.5
Effective tax rate % 4,245.5 87.6
Net profit margin % -2.4 1.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ROYAL ORCHID HOTELS Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 836 million as compared to Rs 825 million in FY17, thereby witnessing an increase of 1.4%.
  • Long-term debt down at Rs 961 million as compared to Rs 1 billion during FY17, a fall of 4.8%.
  • Current assets rose 14% and stood at Rs 623 million, while fixed assets fell 5% and stood at Rs 3 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 4 billion as against Rs 4 billion during FY17, thereby witnessing a fall of 1%.

ROYAL ORCHID HOTELS Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 1,664 1,691 1.7
 
Current Liabilities Rs m 825 836 1.4
Long-term Debt Rs m 1,009 961 -4.8
Total Liabilities Rs m 4,078 4,021 -1.4
 
Current assets Rs m 547 623 13.8
Fixed Assets Rs m 3,079 2,939 -4.5
Total Assets Rs m 4,078 4,021 -1.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ROYAL ORCHID HOTELS Cash Flow Statement Analysis

  • ROYAL ORCHID HOTELS's cash flow from operating activities (CFO) during FY18 stood at Rs 249 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -7 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -185 million on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 58 million from the Rs 65 million net cash flows seen during FY17.

ROYAL ORCHID HOTELS Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 267 249 -6.4%
Cash Flow from Investing Activities Rs m -90 -7 -
Cash Flow from Financing Activities Rs m -112 -185 -
Net Cash Flow Rs m 65 58 -11.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for ROYAL ORCHID HOTELS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.9, 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 127.0, stands at 29.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 2.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 19.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 64.2 69.4
TTM Earnings per share Rs -1.7 0.9
Diluted earnings per share Rs -1.7 0.9
Price to Cash Flow x 29.9 19.0
TTM P/E ratio x 29.4 29.5
Price / Book Value ratio x 1.3 2.6
Market Cap Rs m 3,458 3,467
Dividends per share (Unadj.) Rs 1.0 1.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for ROYAL ORCHID HOTELS

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.7x during FY18, from 0.7x during FY17. 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 1.5x during FY18, from 1.0x during FY17. 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 1.4% during FY18, from -2.7% during FY18. 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 9.0% during FY18, from 5.8% during FY17. 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 4.3% during FY18, from 2.7% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.7 0.7
Debtors’ Days Days 39 45
Interest coverage x 1.0 1.5
Debt to equity ratio x 0.6 0.6
Return on assets % 2.7 4.3
Return on equity % -2.7 1.4
Return on capital employed % 5.8 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

ROYAL ORCHID HOTELS Share Price Performance

Over the last one year, ROYAL ORCHID HOTELS share price has moved up from Rs 172.9 to Rs 127.0, registering a loss of Rs 45.9 or around 26.5%.

Overall, the S&P BSE SENSEX is up 6.1% over the year.

(To know more, check out historical annual results for ROYAL ORCHID HOTELS and quarterly results for ROYAL ORCHID HOTELS)

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