The Indian Hotels Company (INDHOTEL) Q4 06/07 earnings summary

Executive summary

• FY2006/07 delivered strong reported growth: standalone income rose 40%, PBT and PAT each increased 75%; results include the merger of five entities, limiting comparability with FY2005/06.

• The hotel portfolio expanded to 82 owned or managed properties and 9,400 rooms; strategy spans luxury, business, leisure and economy hotels, alongside serviced apartments and wildlife lodges.

Financial highlights

• Standalone total income was ₹1,618.83 crore vs ₹1,154.80 crore; EBITDA ₹637.97 crore vs ₹358.26 crore, PBT ₹474.64 crore vs ₹272.00 crore, and PAT ₹322.39 crore vs ₹183.78 crore.

• Standalone room revenue rose 50% to ₹845.10 crore, including ₹88.59 crore from merged entities; ARR increased 29% to ₹9,234 from ₹7,186.

• F&B revenue increased 28% to ₹521.20 crore, including ₹41.90 crore from merged entities; operating expenses rose 22% to ₹983.14 crore.

• Consolidated income was ₹2,601.13 crore vs ₹1,874.73 crore; PBT ₹532.55 crore vs ₹314.07 crore and PAT after minority interest and associate earnings ₹370.31 crore vs ₹248.74 crore.

• Consolidated diluted EPS increased to ₹6.14 from ₹4.24; standalone basic and diluted EPS were ₹5.35, vs ₹3.15 and ₹3.14, respectively, on split-adjusted prior-year figures.

Outlook and guidance

• FY2007/08 outlook was bullish, supported by forecast Indian GDP growth near 9%, GDCF of 33.8% and rising tourism and business travel.

• Tourist arrivals in India were expected to reach 10 million by 2010; the Commonwealth Games in Delhi were expected to drive hotel room demand.

• Expansion plans target sustainable, profitable growth across price points, from Ginger smart-basic hotels to luxury properties, in domestic and international markets.

• Langkawi and Thimphu hotels were expected to launch in FY2007/08; two additional wildlife lodges were also expected to open during the year.