The Indian Hotels Company (INDHOTEL) Q4 03/04 earnings summary

Executive summary

• FY04 recovery in travel demand drove higher occupancy, room rates and earnings; total income rose 18% YoY to Rs.696.07 crore.

• Reported PAT increased 50% to Rs.60.65 crore; results included Rs.27.54 crore profit on hotel and property sales.

Financial highlights

• Total income Rs.696.07 crore, up 18% YoY; hotel operations income Rs.665.23 crore, up 17%, or 24% excluding the FY03 sale of Taj Residency Lucknow and Taj Blue Diamond Pune.

• Gross profit before depreciation, interest, extraordinary items, prior-period adjustments and tax rose 21% to Rs.133.23 crore.

• Profit before extraordinary items and prior-period adjustments rose 57% to Rs.54.25 crore; reported PBT Rs.80.20 crore and PAT Rs.60.65 crore.

• Room income increased 19%; F&B and related banquet income rose 14%.

• Basic EPS Rs.13.44 vs Rs.8.97; diluted EPS Rs.13.07 vs Rs.8.97.

Outlook and guidance

• Demand was expected to remain strong in FY05, with business and leisure travel supported by economic growth, tourism promotion and improved infrastructure.

• Favorable hotel supply-demand conditions and rising average room rates were expected to continue; no major new supply was anticipated over the following two years, except in North Mumbai and Gurgaon.

• Taj Wellington Mews’ 80 serviced apartments were slated to launch in September 2004; indiOne’s first value hotel was planned to open in Bangalore in June 2004.

• Planned capacity additions over two years included rooms at Taj Lands End and ~175 rooms at Taj West End; 500-room capacity at Taj Lands End was a longer-term target.

• Management contracts in Mauritius and Kovalam were under construction and expected to open in FY05.