SINCLAIRS HOTELS 2021-22 Annual Report Analysis

Wed, 29 Jun

SINCLAIRS 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.

SINCLAIRS HOTELS Income Statement Analysis

• Operating income during the year rose 75.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 149.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 36.5% in FY22 as against 25.6% in FY21.
• Depreciation charges decreased by 16.7% and finance costs increased by 94.3% YoY, respectively.
• Other income declined by 31.7% YoY.
• Net profit for the year grew by 103.0% YoY.
• Net profit margins during the year grew from 20.3% in FY21 to 23.5% in FY22.

SINCLAIRS HOTELS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	173	303	75.6%
Other income	Rs m	59	40	-31.7%
Total Revenues	Rs m	231	343	48.4%
Gross profit	Rs m	44	111	149.9%
Depreciation	Rs m	54	45	-16.7%
Interest	Rs m	6	12	94.3%
Profit before tax	Rs m	42	93	120.7%
Tax	Rs m	7	22	207.6%
Profit after tax	Rs m	35	71	103.0%
Gross profit margin	%	25.6	36.5
Effective tax rate	%	17.0	23.7
Net profit margin	%	20.3	23.5

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SINCLAIRS HOTELS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 65 million as compared to Rs 47 million in FY21, thereby witnessing an increase of 39.4%.
• Current assets fell 5% and stood at Rs 579 million, while fixed assets rose 12% and stood at Rs 963 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 2 billion as against Rs 1 billion during FY21, thereby witnessing a growth of 5%.

SINCLAIRS HOTELS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,076	1,125	4.6
Current Liabilities	Rs m	47	65	39.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,467	1,541	5.1
Current assets	Rs m	609	579	-4.9
Fixed Assets	Rs m	858	963	12.1
Total Assets	Rs m	1,467	1,541	5.1

SINCLAIRS HOTELS Cash Flow Statement Analysis

• SINCLAIRS HOTELS's cash flow from operating activities (CFO) during FY22 stood at Rs 84 million, an improvement of 152.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -51 million, an improvement of 489.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -33 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 0 million from the Rs -2 million net cash flows seen during FY21.

SINCLAIRS 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	33	84	152.7%
Cash Flow from Investing Activities	Rs m	-9	-51	-
Cash Flow from Financing Activities	Rs m	-27	-33	-
Net Cash Flow	Rs m	-2	0	-

Current Valuations for SINCLAIRS HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.6, an improvement from the EPS of Rs 1.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 81.9, stands at 34.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 7.5 times.
• The company's price to cash flow (P/CF) ratio stood at 17.2 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	6.2	10.9
TTM Earnings per share	Rs	1.3	2.6
Diluted earnings per share	Rs	1.3	2.6
Price to Cash Flow	x	15.6	17.2
TTM P/E ratio	x	39.8	34.1
Price / Book Value ratio	x	3.3	1.8
Market Cap	Rs m	3,570	2,005
Dividends per share (Unadj.)	Rs	0.8	1.0

Ratio Analysis for SINCLAIRS HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 8.9x during FY22, from 13.0x 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 8.8x during FY22, from 7.9x 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 6.3% during FY22, from 3.3% 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 9.4% during FY22, from 4.5% 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 5.4% during FY22, from 2.8% 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	13.0	8.9
Debtors’ Days	Days	108	85
Interest coverage	x	7.9	8.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.8	5.4
Return on equity	%	3.3	6.3
Return on capital employed	%	4.5	9.4

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

SINCLAIRS HOTELS Share Price Performance

Over the last one year, SINCLAIRS HOTELS share price has moved up from Rs 74.4 to Rs 81.9, registering a gain of Rs 7.6 or around 10.2%.

Overall, the S&P BSE SENSEX is up 0.6% over the year.

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

Read: Latest Annual Report Analysis of SINCLAIRS HOTELS