Indian Hotels - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 78; MCap: Rs. 9,258 crore)

With hotels business almost shut for the entire quarter, IHCL reported very weak set of numbers for Q1FY21. However, significant fixed cost reduction helped the company to reduce the losses for the quarter.

Q1FY21 Earnings Summary

- The company registered sharp decline of 86% YoY in revenues to Rs. 143.6 crore (vs. I-direct est: Rs. 244.8 crore). Average occupancy declined to 20.5% vs 63.4% LY, ARR also dropped sharply by 47% YoY to Rs. 4848 for the quarter. Out of total revenue of Rs. 143.6 cr, Rs. 55 crore of revenue generated through quarantine facilities, stay for medical professionals and via online F&B initiatives like Qmin & H&H services

- Total expenditure also declined by 51.6% YoY to Rs. 409 crore vs Rs. 847 crore LY. EBITDA loss came in at Rs. 266 crore (vs I-direct estimate: EBITDA loss of Rs. 117 crore)

- The company secured significant lease rental waivers that led to cost saving of Rs. 52 crore for the quarter. Overall, the company reduced fixed costs by Rs. 90 crore, while variable expenses declined by Rs. 365 crore (in line with reduction in the revenues)

- Net loss came in at Rs. 279.9 crore (vs. net profit of Rs. 5.7 crore last year) after adjusting for exceptional gain of Rs. 86 crore (arising out of acquiring full control of Taj Captown hotel)

- The company raised Rs. 500 crore of long term debt. The gross debt now stands at Rs. 2967 crore with D/E ratio of 0.48x

The travel and tourism industry was at a virtual standstill in the last three months, which had a big impact on the hospitality sector. While over 50% of IHCL hotels were closed for most part of Q1 due to government lockdowns, cost optimisation strategy initiated during the quarter helped mitigate losses to some extent. This would also help the company achieve better margins and profitability once economy comes back to normalcy. We would be coming up with a detailed report soon.

Shares of INDIAN HOTELS CO.LTD. was last trading in BSE at Rs.78 as compared to the previous close of Rs. 77.7. The total number of shares traded during the day was 94239 in over 918 trades.

The stock hit an intraday high of Rs. 78.35 and intraday low of 77.3. The net turnover during the day was Rs. 7326664.

Source : Equity Bulls

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