ROYAL ORCHID HOTELS 2022-23 Annual Report Analysis

Fri, 31 Mar

ROYAL ORCHID 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.

ROYAL ORCHID HOTELS Income Statement Analysis

• Operating income during the year rose 90.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 68.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.1% in FY23 as against 35.2% in FY22.
• Depreciation charges decreased by 5.5% and finance costs decreased by 4.6% YoY, respectively.
• Other income declined by 7.3% YoY.
• Net profit for the year grew by 75.2% YoY.
• Net profit margins during the year declined from 19.3% in FY22 to 17.8% in FY23.

ROYAL ORCHID HOTELS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,385	2,635	90.3%
Other income	Rs m	174	161	-7.3%
Total Revenues	Rs m	1,559	2,797	79.4%
Gross profit	Rs m	488	819	68.0%
Depreciation	Rs m	194	184	-5.5%
Interest	Rs m	169	161	-4.6%
Profit before tax	Rs m	299	636	112.9%
Tax	Rs m	31	167	439.8%
Profit after tax	Rs m	268	469	75.2%
Gross profit margin	%	35.2	31.1
Effective tax rate	%	10.3	26.2
Net profit margin	%	19.3	17.8

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ROYAL ORCHID HOTELS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 799 million as compared to Rs 773 million in FY22, thereby witnessing an increase of 3.4%.
• Long-term debt down at Rs 655 million as compared to Rs 721 million during FY22, a fall of 9.2%.
• Current assets rose 42% and stood at Rs 1 billion, while fixed assets rose 10% and stood at Rs 3 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 18%.

ROYAL ORCHID HOTELS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,252	1,730	38.2
Current Liabilities	Rs m	773	799	3.4
Long-term Debt	Rs m	721	655	-9.2
Total Liabilities	Rs m	3,543	4,167	17.6
Current assets	Rs m	821	1,163	41.6
Fixed Assets	Rs m	2,573	2,836	10.2
Total Assets	Rs m	3,543	4,167	17.6

ROYAL ORCHID HOTELS Cash Flow Statement Analysis

• ROYAL ORCHID HOTELS's cash flow from operating activities (CFO) during FY23 stood at Rs 555 million, an improvement of 154.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -89 million, an improvement of 206.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -252 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 215 million from the Rs 56 million net cash flows seen during FY22.

ROYAL ORCHID 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	218	555	154.4%
Cash Flow from Investing Activities	Rs m	-29	-89	-
Cash Flow from Financing Activities	Rs m	-133	-252	-
Net Cash Flow	Rs m	56	215	284.3%

Current Valuations for ROYAL ORCHID HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.1, an improvement from the EPS of Rs 9.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 270.7, stands at 15.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.3 times, while the price to sales ratio stands at 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 9.0 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	50.5	96.1
TTM Earnings per share	Rs	9.8	17.1
Diluted earnings per share	Rs	9.8	17.1
Price to Cash Flow	x	7.3	9.0
TTM P/E ratio	x	12.5	15.8
Price / Book Value ratio	x	2.1	3.4
Market Cap	Rs m	2,614	5,901
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ROYAL ORCHID HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY23, from 1.1x 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 5.0x during FY23, from 2.8x 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 27.1% during FY23, from 21.4% 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 33.4% during FY23, from 23.7% 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 15.1% during FY23, from 12.3% 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	1.1	1.5
Debtors’ Days	Days	549	444
Interest coverage	x	2.8	5.0
Debt to equity ratio	x	0.6	0.4
Return on assets	%	12.3	15.1
Return on equity	%	21.4	27.1
Return on capital employed	%	23.7	33.4

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 122.3 to Rs 270.7, registering a gain of Rs 148.5 or around 121.4%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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