Indian Hotels Company - Q2FY13 Result First Cut - Microsec

Indian Hotels Company Ltd, announced its Q2FY13 on 6th November, 2012.

The company's standalone sales arrived at INR379.01 crore, which was up by 6% on YoY basis, but down by 4.40% on QoQ basis due to slowdown in tourist arrivals. Over April-Sep, tourist arrivals in India rose just 3 percent to 2.6 million, compared with near 10 percent growth in the same period a year ago. The EBITDA for the quarter was INR20.17 crore, which was down drastically by 47.54% and 69.46% on YoY and QoQ basis. The EBITDA Margin was down by 543bps and 1134bps on YoY basis and QoQ basis. The company posted a net loss of INR6.36 crore as compared to a net profit of INR8.35 crore on YoY basis and INR4.03 crore on QoQ basis. It has a consolidated debt of around Rs 3,800 crore.

Company's Guidance:

- Indian Hotels currently has 115 hotels with 13,887 rooms. It has added 5 hotels with 509 rooms so far this financial year and has 8 more hotels (995 rooms) scheduled to open by March.

- In 2013-14, it plans to add 13 hotels (1,521 rooms). Most of the new hotels opening over next 1.5-2 years will either be management contracts or through subsidiaries like Taj GVK and Roots Corp and so the company has not earmarked significant capex for its growth.

- The company wants to reduce its dependence on the Indian market and expand its footprint overseas to generate at least 40 percent revenue from outside the country in the future.

- Indian Hotels is expecting a pickup in occupancies in the second half, and plans to raise room rates by 5-8 percent.

Hence, keeping in view the current subdued scenario and assuming the tourist arrivals and occupancy rates to improve in future, we still recommend a "BUY" on IHCL with the target price of INR81.

Source : Equity Bulls

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