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Hotel Leelaventure Limited
F3Q11: Improvement Visible in Operating Trends
Quick Comment – Impact on our views: Hotel
Leelaventure reported F3Q11 revenue of Rs1.4bn (up
11% YoY), EBITDA of Rs556mn (up 9% YoY) and
reported profit of Rs220mn (down 24% YoY). This
compares with our estimates of Rs1.3bn, Rs511mn, and
Rs192mn, respectively. We believe improvement in
RevPARs across key destinations was the primary
reason for the improved performance. During the
quarter, the company has also entered into a scheme of
arrangement with its promoter company wherein it will
issue 79mn equity shares (17% of post diluted equity
shares) at Rs51/share to acquire freehold rights on the
land in Mumbai, Bangalore, and Goa, where its hotels
are located.
What's new: Hotel Leelaventure reported decent
operating performance with EBITDA margin at 39%
(down 95bp YoY). Generally this quarter is seasonally
strong, which is reflected in the strong revenue numbers.
However, higher other expenses dampened the impact
on operating profit. Quarterly movements in city-wise
ARR and OR are shown in Exhibits 2-9.
In addition, the Board of Directors approved a scheme of
arrangement between the company and Leela Lace
Holdings Pvt Ltd (a promoter company), whereby the
leasing business of freehold land of Leela Lace will be
demerged into Hotel Leelaventures effective April 1,
2011. The share exchange ratio is 1,214 shares of Hotel
Leelaventures issued for every 100 shares held by Leela
Lace shareholders on the record date. The scheme is
subject to necessary approvals.
Investment thesis: While operating performance
seems to be improving, we believe the scheme of
arrangement with Leela Lace Holdings is earnings
dilutive. We maintain our Equal-weight rating on the
stock
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Hotel Leelaventure Limited
F3Q11: Improvement Visible in Operating Trends
Quick Comment – Impact on our views: Hotel
Leelaventure reported F3Q11 revenue of Rs1.4bn (up
11% YoY), EBITDA of Rs556mn (up 9% YoY) and
reported profit of Rs220mn (down 24% YoY). This
compares with our estimates of Rs1.3bn, Rs511mn, and
Rs192mn, respectively. We believe improvement in
RevPARs across key destinations was the primary
reason for the improved performance. During the
quarter, the company has also entered into a scheme of
arrangement with its promoter company wherein it will
issue 79mn equity shares (17% of post diluted equity
shares) at Rs51/share to acquire freehold rights on the
land in Mumbai, Bangalore, and Goa, where its hotels
are located.
What's new: Hotel Leelaventure reported decent
operating performance with EBITDA margin at 39%
(down 95bp YoY). Generally this quarter is seasonally
strong, which is reflected in the strong revenue numbers.
However, higher other expenses dampened the impact
on operating profit. Quarterly movements in city-wise
ARR and OR are shown in Exhibits 2-9.
In addition, the Board of Directors approved a scheme of
arrangement between the company and Leela Lace
Holdings Pvt Ltd (a promoter company), whereby the
leasing business of freehold land of Leela Lace will be
demerged into Hotel Leelaventures effective April 1,
2011. The share exchange ratio is 1,214 shares of Hotel
Leelaventures issued for every 100 shares held by Leela
Lace shareholders on the record date. The scheme is
subject to necessary approvals.
Investment thesis: While operating performance
seems to be improving, we believe the scheme of
arrangement with Leela Lace Holdings is earnings
dilutive. We maintain our Equal-weight rating on the
stock
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