Indian Hotels - Q4FY20 First Cut - ICICI Securities

(CMP: Rs. 93; Mcap: Rs. 11,036 crore)

IHCL's revenues and profits are lower compared to previous year; however the results are better than our estimates mainly led by a beat in revenues and profit on sale of assets leading to a beat on the PAT front. EBITDA is broadly in-line with our estimates.

Q4FY20 Earnings Summary

- The company registered a 14.6% decline in revenues to Rs. 1,063 crore (vs. I-direct estimates of Rs. 995 crore), with similar drop seen in its international as well as standalone business. For FY20, the company's revenues dipped marginally by 1% YoY to Rs. 4,463 crore, reversing the 4% growth seen on 9mFY20 basis.

- From the profitability front, during the quarter, its consolidated EBITDA margins declined 330bps YoY to 19.6% (I-direct estimate of 20.5%), with a sharper decline seen in its standalone (domestic) business by 522bps YoY. Absolute EBITDA for the quarter dropped 27% YoY to Rs. 207.9 crore (vs. I-direct estimate of Rs. 203.7 crore).

- For the year, while domestic business reported a stable performance, its international business saw a healthy turnaround, supporting the profitability. In FY20, consolidated EBITDA margins improved 330bps, standalone (pure domestic) business saw EBITDA margin improvement by 150bps. International business staged a healthy recovery and saw an improvement in profitability, with EBITDA margins improving from 5.8% in FY19 to 12% in FY20. Consolidated EBITDA for FY20, saw a 16.6% growth YoY to Rs. 968 crore, driven by international business

- PBT for Q4FY20, saw a 52% decline led by lower EBITDA and higher interest and depreciation charges (lease expense reclassification). On the PAT front, the company reported a 36% decline to Rs. 74.3 crore (I-direct estimate of Rs. 38.9 crore). The decline on the PBT and PAT front was restricted by exceptional gains coming from profit on sale of land & building and hotel assets, partly offset by certain valuation adjustments for its derivatives instruments.

IHCL was improving its performance and was on-track to meet the targets of 'Aspiration 2022', the ongoing pandemic situation has caused significant disruption in the tourism space, de-railing the company's plans as well. We would seek management's outlook and plans (demand, status of operations, costs, balance sheet) for the future, from the conference call and will come up with a detailed report soon.

Shares of INDIAN HOTELS CO.LTD. was last trading in BSE at Rs.92.8 as compared to the previous close of Rs. 89.35. The total number of shares traded during the day was 383884 in over 3317 trades.

The stock hit an intraday high of Rs. 95 and intraday low of 89.15. The net turnover during the day was Rs. 35276926.

Source : Equity Bulls

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