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Indian Hotels Company Ltd
F1Q12: Operational
Numbers below Expectation
Quick Comment – Impact on our views: IHCL
reported standalone revenue of Rs3.7bn (up 12% YoY),
EBITDA of Rs681mn (up 28% YoY) and adjusted profit
of Rs217mn (against a loss of Rs9mn in F1Q11). This
compares with our estimates of revenue of Rs4.1bn,
EBITDA of Rs1bn, and profit of Rs232mn. Operational
profit was disappointing given weak revenue growth,
which we believe was primarily due to slower growth in
room rates. Hence, while EBITDA margin expanded
218bp YoY, we believe it was muted.
What's new: We were expecting a stronger quarter as
F1Q11 numbers were affected by non-availability of
rooms in the heritage wing of the Taj Mahal Palace &
Tower following the November 2008 terrorist attacks.
However, while those rooms were back in operation, we
believe overall operational trends in the country
remained weak, as average room rates continued to be
under pressure while occupancy rates showed a
reasonably stronger trend.
The company however, recorded higher other income
and lower interest expense resulting in a lower miss on
PBT.
Conclusion: While improving domestic industry trends
could aid performance, we believe the company
continues to face pressure on RevPARs. Further,
earnings from international operations too could remain
weak given the current macro condition globally, thus
posing challenges for consolidated earnings. 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 �� ��
Indian Hotels Company Ltd
F1Q12: Operational
Numbers below Expectation
Quick Comment – Impact on our views: IHCL
reported standalone revenue of Rs3.7bn (up 12% YoY),
EBITDA of Rs681mn (up 28% YoY) and adjusted profit
of Rs217mn (against a loss of Rs9mn in F1Q11). This
compares with our estimates of revenue of Rs4.1bn,
EBITDA of Rs1bn, and profit of Rs232mn. Operational
profit was disappointing given weak revenue growth,
which we believe was primarily due to slower growth in
room rates. Hence, while EBITDA margin expanded
218bp YoY, we believe it was muted.
What's new: We were expecting a stronger quarter as
F1Q11 numbers were affected by non-availability of
rooms in the heritage wing of the Taj Mahal Palace &
Tower following the November 2008 terrorist attacks.
However, while those rooms were back in operation, we
believe overall operational trends in the country
remained weak, as average room rates continued to be
under pressure while occupancy rates showed a
reasonably stronger trend.
The company however, recorded higher other income
and lower interest expense resulting in a lower miss on
PBT.
Conclusion: While improving domestic industry trends
could aid performance, we believe the company
continues to face pressure on RevPARs. Further,
earnings from international operations too could remain
weak given the current macro condition globally, thus
posing challenges for consolidated earnings. We
maintain our Equal-weight rating on the stock.
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