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Y e t t o s e e a h e a l t h y r e c o v e r y…
Indian Hotels (IHCL) reported Q1FY12 standalone net revenues of | 369.5
crore (up 12% YoY) and PAT of | 20.2 crore against |3.3 crore in Q1FY11
below our estimate of | 414.1 crore, and | 55.1 crore, respectively. We
believe, incremental revenues from re-opening of Taj Hotels, Mumbai and
marginal pick up in average occupancy levels drew topline growth, while
average room rates (ARRs) remained flat due to rising supply concern. On
the cost front, operating costs surged moderately by 9% YoY on the back
of adoption of tight cost control measures. As a result, operating margin
saw expansion of over 200bps YoY to 18.4%.
ƒ Re-opening of hotel, marginal pickup in demand drives topline
IHCL’s Q1FY12 topline grew moderately by 12% YoY to | 369.5
crore on a standalone basis mainly on the back of ~150 bps YoY
rise in occupancy and marginal growth in ARR by ~4%YoY to
|8500. The result also has impact of incremental revenue from Taj
Heritage property, which reopened on August 2010. Due to seasonal
impact performance of leisure destinations remained subdued while
among the business destinations RevPAR across Delhi and
Bangalore improved by ~2% to ~10% for the same period. We
believe the industry is still in the nascent stage of recovery and is
yet to make the transition from occupancy led cycle to the one
supported by rising average room realisations.
ƒ Jump in bottom-line on lower interest outgo, higher other income
Though the operating performance remained subdued, the bottoline
surged sharply to | 20.3 crore (up ~510% YoY) due to rise in other
income (up by 122% YoY to | 13 crore) and lower interest outgo
(down by ~38% YoY to | 21 crore).
V a l u a t i o n s
While domestic business is expected to grow moderately by 13% p.a.
international business growth is expected to remain muted in a wake of
economy slowdown. We lower our FY12E and FY13E sales forecast by
3.3% and 5% respectively. At the CMP of | 74, the stock is trading at 9.2x
and 7.6x its FY12E and FY13E EV/EBITDA, respectively. We lower our
FY13E multiple target and value the company at 9.0x FY13E EV/EBITDA
(i.e. at EV per room of | 1 crore), factoring its asset value and revise our
target price downward to | 90 with a BUY rating
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Y e t t o s e e a h e a l t h y r e c o v e r y…
Indian Hotels (IHCL) reported Q1FY12 standalone net revenues of | 369.5
crore (up 12% YoY) and PAT of | 20.2 crore against |3.3 crore in Q1FY11
below our estimate of | 414.1 crore, and | 55.1 crore, respectively. We
believe, incremental revenues from re-opening of Taj Hotels, Mumbai and
marginal pick up in average occupancy levels drew topline growth, while
average room rates (ARRs) remained flat due to rising supply concern. On
the cost front, operating costs surged moderately by 9% YoY on the back
of adoption of tight cost control measures. As a result, operating margin
saw expansion of over 200bps YoY to 18.4%.
ƒ Re-opening of hotel, marginal pickup in demand drives topline
IHCL’s Q1FY12 topline grew moderately by 12% YoY to | 369.5
crore on a standalone basis mainly on the back of ~150 bps YoY
rise in occupancy and marginal growth in ARR by ~4%YoY to
|8500. The result also has impact of incremental revenue from Taj
Heritage property, which reopened on August 2010. Due to seasonal
impact performance of leisure destinations remained subdued while
among the business destinations RevPAR across Delhi and
Bangalore improved by ~2% to ~10% for the same period. We
believe the industry is still in the nascent stage of recovery and is
yet to make the transition from occupancy led cycle to the one
supported by rising average room realisations.
ƒ Jump in bottom-line on lower interest outgo, higher other income
Though the operating performance remained subdued, the bottoline
surged sharply to | 20.3 crore (up ~510% YoY) due to rise in other
income (up by 122% YoY to | 13 crore) and lower interest outgo
(down by ~38% YoY to | 21 crore).
V a l u a t i o n s
While domestic business is expected to grow moderately by 13% p.a.
international business growth is expected to remain muted in a wake of
economy slowdown. We lower our FY12E and FY13E sales forecast by
3.3% and 5% respectively. At the CMP of | 74, the stock is trading at 9.2x
and 7.6x its FY12E and FY13E EV/EBITDA, respectively. We lower our
FY13E multiple target and value the company at 9.0x FY13E EV/EBITDA
(i.e. at EV per room of | 1 crore), factoring its asset value and revise our
target price downward to | 90 with a BUY rating
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