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SINCLAIRS HOTELS 2022-23 Annual Report Analysis

Thu, 15 Jun

SINCLAIRS 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.

SINCLAIRS HOTELS Income Statement Analysis

• Operating income during the year rose 77.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 270.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 76.2% in FY23 as against 36.5% in FY22.
• Depreciation charges increased by 3.8% and finance costs increased by 13.6% YoY, respectively.
• Other income declined by 11.4% YoY.
• Net profit for the year grew by 338.2% YoY.
• Net profit margins during the year grew from 23.5% in FY22 to 58.1% in FY23.

SINCLAIRS HOTELS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	303	538	77.4%
Other income	Rs m	40	36	-11.4%
Total Revenues	Rs m	343	573	67.0%
Gross profit	Rs m	111	410	270.1%
Depreciation	Rs m	45	47	3.8%
Interest	Rs m	12	14	13.6%
Profit before tax	Rs m	93	384	311.5%
Tax	Rs m	22	72	225.6%
Profit after tax	Rs m	71	312	338.2%
Gross profit margin	%	36.5	76.2
Effective tax rate	%	23.7	18.8
Net profit margin	%	23.5	58.1

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SINCLAIRS HOTELS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 73 million as compared to Rs 65 million in FY22, thereby witnessing an increase of 11.4%.
• Current assets rose 40% and stood at Rs 810 million, while fixed assets fell 4% and stood at Rs 924 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2 billion as against Rs 2 billion during FY22, thereby witnessing a growth of 12%.

SINCLAIRS HOTELS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,125	1,285	14.2
Current Liabilities	Rs m	65	73	11.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,541	1,733	12.5
Current assets	Rs m	579	810	39.9
Fixed Assets	Rs m	963	924	-4.0
Total Assets	Rs m	1,541	1,733	12.5

SINCLAIRS HOTELS Cash Flow Statement Analysis

• SINCLAIRS HOTELS's cash flow from operating activities (CFO) during FY23 stood at Rs 178 million, an improvement of 112.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -7 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -170 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 million from the Rs 0 million net cash flows seen during FY22.

SINCLAIRS 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	84	178	112.9%
Cash Flow from Investing Activities	Rs m	-51	-7	-
Cash Flow from Financing Activities	Rs m	-33	-170	-
Net Cash Flow	Rs m	0	2	409.4%

Current Valuations for SINCLAIRS HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.5, an improvement from the EPS of Rs 2.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 124.1, stands at 10.8 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 6.3 times.
• The company's price to cash flow (P/CF) ratio stood at 7.9 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	10.9	19.8
TTM Earnings per share	Rs	2.6	11.5
Diluted earnings per share	Rs	2.6	11.5
Price to Cash Flow	x	21.3	7.9
TTM P/E ratio	x	37.1	10.8
Price / Book Value ratio	x	1.8	2.2
Market Cap	Rs m	2,005	2,849
Dividends per share (Unadj.)	Rs	1.0	1.5

Ratio Analysis for SINCLAIRS HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 11.1x during FY23, from 8.9x 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 29.3x during FY23, from 8.8x 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 24.3% during FY23, from 6.3% 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 31.0% during FY23, from 9.4% 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 18.8% during FY23, from 5.4% 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	8.9	11.1
Debtors’ Days	Days	85	92
Interest coverage	x	8.8	29.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.4	18.8
Return on equity	%	6.3	24.3
Return on capital employed	%	9.4	31.0

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 89.6 to Rs 124.1, registering a gain of Rs 34.5 or around 38.5%.

Overall, the S&P BSE SENSEX is up 19.4% over the year.

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