MOSL: ANNUAL REPORT THREADBARE (ART) | INDIAN HOTELS FY19-Superior operating performance driving return ratios
ANNUAL REPORT THREADBARE (ART) | INDIAN HOTELS FY19: Superior operating performance driving return ratios
Indian Hotels’ (IHCL) FY19 annual report highlights continued improvement in its return ratios. Over FY15-19, RoCE rose 460bp to 8.8% in FY19, led by a turnaround in operations. RoE improved to 5.9% (FY15: -11%), led by de-leveraging. Also, during past five years, robust OCF generation (INR28.5b) and rights issues (INR15b) helped IHCL to repay debt (INR25b) and fund capex (INR20b). Over the same period, EBITDA CAGR stood at 11.2% to INR8.3b (FY15: INR4.9b), with the margin expanding ~670bp to 18%, primarily led by (a) industry upcycle with a favorable demand-supply scenario (leading to higher ARRs and occupancy rates) and (b) cost-rationalization measures. Finance cost halved from a high of INR3.8b in FY16 to INR1.9b in FY19, helping IHCL to turn around its operations from a loss of INR2b in FY16 to PAT of INR2.9b in FY19. Subsidiaries continued incurring losses but improved their performance, with losses (before exceptional items) reducing to INR1b (FY18: INR1.8b). Implementation of Ind-AS 116 will result in revision in debt (INR42.3b v/s reported INR23.3b) and D/E (0.8x v/s reported 0.5x) numbers in FY19.
Indian Hotels is primarily engaged in the business of hoteliering and air catering. Co. operates under the brand "Taj Hotels Resorts and Palaces"and runs the hotels under the brands "Taj", "Gateway" and "Ginger" hotels. As of Mar 31 2010, Taj Hotels Resorts and Palaces was comprised of 66 hotels in 42 locations across India with an additional 16 international hotels in the Maldives, Malaysia, Australia, U.K., U.S., Bhutan, Sri Lanka, Africa and the Middle East. Co. also operates Taj Sats Air Catering Ltd. as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. Additionally, Co. operates the Indian Institute of Hotel Management, Aurangabad.
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