INDIAN HOTEL
 
  

 
 

SHARETIPSINFO >>Research Reports >> INDIAN HOTEL (12-12-2008)

 

LISTING
BSE
CMP
Rs 40
52 WEEK HIGH/LOW
Rs177/Rs38
FACE VALUE
Rs1
PE RATIO
7.2
P/BV
1.25
Market Cap
Rs2748 CRORE
DIV%
190%
DIV YIELD
5%

COMPANY OVERVEIW:
The Company was incorporated on 1st April 1902 by Jamsetji Tata and till 1965 owned and managed two hotel, they are Taj Mahal Hotel and the Green`s Hotel.
The company focuses and operates in three divisions namely luxury division, business hotel division and leisure division.
Indian Hotel has chalked out ambitious expansion plans. It is also readying up strategy to scale up its presence significantly in international arena.
Along with its associates and subsidiary, IHCL has targeted the commissioning of 9 thousand rooms by FY2011.This would take the total number of rooms under its management to 19 thousand from the current 10 thousand.
Indian hotel has outlined a capital expenditure of Rs 20 billion for over next four years.


NEW PROPERTY LAUNCHES:


PROPERTIES

ROOMS

WITHIN IHCL(Indian Hotel)

 

TAJ ITPL,BANGLORE

199

LANDS`END EXPANSION

142

TAJ RESIDENCY,YESHWANTPUR,BANGLORE

350

TAJ LAKE END,UDAIPUR

80

TAJ FALAKNUMA PALACE,HYDERABAD

60

TAJ SURYA,COIMBATORE

200

TAJ SANTA CRUZ,MUMBAI

175

TAJ RESIDENCY NOIDA

450

MOTI MAHAL,BHARATPUR

40

SUB TOTAL

1696

GROUP EXPANSION

 

TAJ MOUNT ROAD,CHENNAI

215

NADESAR PALACE,VARANASI

10

FISHERMAN COVE

64

TAJ EXOTICA RESORT & SPA ,PHUKET

79

TAJ PALACE,CAPE TOWN

152

GATEWAY,BENARGHATTA RD.BANGLORE

225

GINGER

3500

TAJ SAFARIS

30

SUB TOTAL

4275

MANAGEMENT CONTRACT

 

TAJ RESIDENCY,TRIVANDRUM

134

GATEWAY,CHENNAI

159

GATEWAY,GONDIA

35

TAJ RESIDENCY,NAGPUR

300

TAJ RESIDENCY,PANJIM

154

GATEWAY,JALANDHAR

100

GATEWAY,RAIPUR

125

GATEWAY RESORT,BEKAL

75

GATEWAY, KOLKATA

200

GATEWAY.PUNE

156

TAJ EXOTICA PALMS,JUMEIRAH,DUBAI

262

TAJ EXOTICA,DOHA

150

TAJ RESIDENCY,GURGAON

200

TAJ RESORT,PONDICHERRY

60

TAJ EXOTICA,SARAYA ISLAND,UAE

60

TAJ SERVICED RESIDENCES

700

SUB TOTAL

2870

TOTAL ROOM

1696+4275+2870=8841

RECENT DEVELOPMENT:
ORIENT EXPRESS HOTEL: IHCL acquired a 11% stake in Orient Express Hotel Ltd, a NYSE listed company , for $233 in sep 07.This was followed by an additional purchase of 0.6% stake for $14mn.OEHL owns/operates 49 properties across 25 countries and also operates 6 luxury trains services and 2 river canal cruises. It also has interest in real estate development.


INDUSTRY OUTLOOK:
Tourist inflow is seeing a growth of 10% YoY.
Improving infrastructure and marketing thrust. Government is committed for improvement of airports through public private participation.
Encouraging air travel.


KEY RISK:
Slow down in the global economy will see toll on tourism.
Recent terrorist attack on Taj hotel Mumbai and other places Mumbai  in will take some time to heal. Tourists were specially targeted.
This is the peak season, if things go bad it will hit the whole year balance sheet.
Company is on massive expansion plan; it may create over capacity in short term. But long term outlook is intact.


SHAREHOLDING PATTERN:

 

 

 

NO.OF SHARES

% OF TOTAL

 

PROMOTERS

213613999

 

29.55%

 

 

INSTITUTION

314152386

 

43.35%

 

 

GENERAL PUBLIC

192189133

 

26.60%

 

SHARE HELD BY CUSTODIAN

3449770

 

0.50%

 

 

GRAND TOTAL

723405288

 

100.00%

 

FINANCIAL:

 

 

 

31/03/05

31/03/06

31/03/07

31/03/08

 

TOTAL INCOME

873.24

1127.57

1618.71

1823.13

 

EXPENDITURE

-665.94

-769.31

-980.78

-1062.94

 

OPERATING PROFIT

207.3

358.26

637.93

760.19

 

DEPRECIATION

-56.77

-65.9

-91.4

-85.44

 

PBIT

 

150.53

292.36

546.53

674.75

 

INTEREST

 

-31.84

-20.36

-71.89

-94.28

 

PBT

 

118.69

272

474.64

580.47

EXCEPTIONAL ITEM

 

0

0

0

0

 

TAX

 

-35.82

-88.22

-152.25

-203.01

 

PAT

 

82.87

183.78

322.39

377.46

 CHANGE IN TOTAL INCOME: TOTAL INCOME CHANGED AT CAGR OF 27.64%.



CHANGE IN OPERATING PROFIT: OPERATING PROFIT INCREASED AT CAGR OF 54.2%.



CHANGE IN NET PROFIT: NET PROFIT INCREASED AT CAGR OF 65.68%.


 RATIO:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

 

EPS

1.145563

2.540503

4.456594

5.21786

 

NPM

9.489945

16.29877

19.91648

20.70395

 

OPM

23.73918

31.77275

39.40978

41.69697

INTEREST COVERAGE

4.727701

14.35953

7.602309

7.156873


EPS showed consistent increase.
NPM and OPM have shown YoY increase.
Interest coverage is stabilized at 7.


COMPARISON OF Q2FY2009 WITH Q2 FY2008:

 

 

30/09/07

% CHG

30/09/08

TOTAL INCOME

366.61

8.90%

399.44

EXPENDITURE

-242.94

14%

-277.94

OPERATING INCOME

123.67

-1.17%

121.5

DEPRECIATION

-20.7

8.01%

-22.63

PBIT

 

102.97

-3.97%

98.87

INTEREST

 

-25.67

-12.31%

-22.51

PBT

 

77.3

-1.21%

76.36

TAX

 

-24.46

5.06%

-25.7

PAT

 

52.84

-4.01%

50.66

Marginal fall in operating income seen as compared to last year second quarter due to slow down in the global economy in the second quarter of 2008-09.


MEDIAN PE RATIO:



VALUATION:
At current price of Rs 39-40 range, it is trading at 7.2X of trailing twelve month earning. At this price all the negative news are discounted. There cannot be anything worst than this for Indian Hotel company. Slow down in tourism and terrorist attack in Mumbai. Historically the company has  traded at PE multiple of 18.On conservative basis even if we take into account the bearish sentiment in the market the PE multiple should be around 14.This multiple translate the price at around Rs72.We expect the fair value of the companies share at Rs 72.


CONCLUSION:
Risk adverse investor could take position on this counter for at least 50% return in medium to long term. The downside in the stock is very limited.

 

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