Oriental Hotels EBITDA dropped on 16.6% while Revenue increased on 3.7%
12-05-2016 • About Oriental Hotels (
$ORIENTHOT) • By InTwits
Oriental Hotels reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Oriental Hotels has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.8%. At the same time it's a lot of higher than industry average of 11.0%.
- CAPEX is quite volatile: ₹248m in FY2016, ₹274m in FY2015, ₹467m in FY2014, ₹612m in FY2013, ₹772m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.5%
- It operates with high leverage: Net Debt/EBITDA is 6.5x while industry average is 5.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Oriental Hotels's Revenue increased on 3.7%. During the last 5 years Revenue growth bottomed in FY2015 at 3.1%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.3 pp from 16.7% to 13.4% in FY2016. EBITDA Margin stuck to a declining trend at -1.9 pp per annum in FY2012-FY2016.
Net Income margin decreased slightly on 0.77 pp from 0.45% to -0.33% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 6.5% in FY2016. CAPEX/Revenue dropped on 11.2 pp from 17.7% in FY2013 to 6.5% in FY2016. It's average CAPEX/Revenue for the last three years was 9.1%. CAPEX as a % of Revenue followed a declining trend at -4.6 pp per annum in the last 5 years.
Return on investment
The company operates at low but positive ROIC (2.5%) and negative ROE (-0.4%). ROIC decreased slightly on 1.3 pp from 3.8% to 2.5% in FY2016. ROE decreased slightly on 0.81 pp from 0.45% to -0.36% in FY2016.
Leverage (Debt)
Debt level is 6.5x Net Debt / EBITDA and 6.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.0x from 5.5x to 6.5x in FY2016. Debt showed almost no change in FY2016 while cash jumped on 34.5%. Net Debt/EBITDA followed a growing trend at 0.5x per annum in the last 5 years.
Oriental Hotels has short term refinancing risk: cash is only 14.9% of short term debt.
Financial and operational results
Oriental Hotels ($ORIENTHOT) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,172 | 3,446 | 3,554 | 3,664 | 3,798 | 3.7% |
| EBITDA | 689 | 639 | 551 | 610 | 509 | -16.6% |
| Net Income | 225 | 156 | -226 | 16 | -12 | -175.7% |
Balance Sheet
|
|---|
| Cash | 267 | 191 | 172 | 121 | 163 | 34.5% |
| Short Term Debt | 574 | 1,039 | 1,711 | 876 | 1,095 | 25.0% |
| Long Term Debt | 2,646 | 2,066 | 1,762 | 2,606 | 2,394 | -8.1% |
Cash flow
|
|---|
| Capex | 772 | 612 | 467 | 274 | 248 | -9.4% |
Ratios
|
|---|
| Revenue growth | 14.9% | 8.6% | 3.1% | 3.1% | 3.7% | |
| EBITDA growth | -1.3% | -7.3% | -13.7% | 10.7% | -16.6% | |
|
|---|
| EBITDA Margin | 21.7% | 18.5% | 15.5% | 16.7% | 13.4% | -3.3% |
| Net Income Margin | 7.1% | 4.5% | -6.4% | 0.4% | -0.3% | -0.8% |
| CAPEX, % of revenue | 24.3% | 17.7% | 13.1% | 7.5% | 6.5% | -0.9% |
|
|---|
| ROIC | 6.4% | 4.3% | 2.7% | 3.8% | 2.5% | -1.3% |
| ROE | 5.9% | 3.9% | -5.7% | 0.4% | -0.4% | -0.8% |
| Net Debt/EBITDA | 4.3x | 4.6x | 6.0x | 5.5x | 6.5x | 1.0x |
Peers in Hotels
Below you can find Oriental Hotels benchmarking vs. other companies in Hotels industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asian Hotels (West) ($AHLWEST) | 0.8% | -0.2% | 3.1% | 96.5% | - |
| Sterling Holiday Resorts (India) ($STERLINH) | 69.9% | 50.6% | 21.3% | 26.2% | - |
| Royale Manor Hotels & Industries ($RAYALEMA) | 0.9% | 2.2% | 5.5% | 18.9% | - |
| The Byke Hospitality ($THEBYKE) | 47.6% | 105.7% | 54.3% | 16.5% | - |
| Eih ($EIHOTEL) | - | 4.4% | 5.3% | 7.9% | -0.6% |
| |
|---|
| Median (15 companies) | 15.6% | 12.7% | 5.9% | 3.4% | -0.6% |
|---|
| Oriental Hotels ($ORIENTHOT) | - | 8.6% | 3.1% | 3.1% | 3.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jindal Hotels ($JINDHOT) | - | - | - | 37.6% | - |
| Benares Hotels ($BENARAS) | - | - | - | 33.6% | - |
| Fomento Resorts & Hotels ($FOMEHOT) | - | - | - | 27.9% | - |
| Advani Hotels & Resorts (India) ($ADVANIHOTR) | - | - | - | 25.9% | - |
| Country Club (India) ($COUNCLB) | 34.2% | 32.3% | 24.2% | 23.7% | - |
| |
|---|
| Median (20 companies) | 21.9% | 22.9% | 21.0% | 20.8% | 16.9% |
|---|
| Oriental Hotels ($ORIENTHOT) | 21.7% | 18.5% | 15.5% | 16.7% | 13.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asian Hotels (North) ($ASIANHOTNR) | 30.8% | 60.2% | 37.2% | 36.1% | - |
| Sayaji Hotels ($SAYAJIHOTL) | 18.9% | 17.5% | 12.4% | 30.3% | - |
| Country Club (India) ($COUNCLB) | 58.7% | 36.6% | 49.6% | 28.5% | - |
| Mahindra Holidays & Resorts India ($MHRIL) | 26.0% | 26.5% | 15.4% | 18.0% | - |
| Eih ($EIHOTEL) | 13.6% | 12.0% | 7.1% | 9.0% | 5.5% |
| |
|---|
| Median (11 companies) | 30.8% | 22.0% | 8.8% | 4.9% | 4.9% |
|---|
| Oriental Hotels ($ORIENTHOT) | 24.3% | 17.7% | 13.1% | 7.5% | 6.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| The Byke Hospitality ($THEBYKE) | 5.3% | 14.5% | 22.6% | 24.1% | - |
| Advani Hotels & Resorts (India) ($ADVANIHOTR) | - | - | - | 15.9% | - |
| Eih ($EIHOTEL) | 5.5% | 4.5% | 5.8% | 6.3% | 6.6% |
| Mahindra Holidays & Resorts India ($MHRIL) | 13.4% | 22.2% | 16.3% | 6.3% | - |
| Country Club (India) ($COUNCLB) | 8.8% | 8.9% | 5.4% | 5.3% | - |
| |
|---|
| Median (29 companies) | 5.4% | 5.0% | 4.1% | 2.3% | 4.5% |
|---|
| Oriental Hotels ($ORIENTHOT) | 6.4% | 4.3% | 2.7% | 3.8% | 2.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hotel Leelaventure ($HOTELEELA) | 62.5x | 40.2x | 33.5x | 46.7x | - |
| Asian Hotels (North) ($ASIANHOTNR) | 28.4x | 11.0x | 15.4x | 24.8x | - |
| Asian Hotels (East) ($AHLEAST) | -0.0x | 9.8x | 8.9x | 7.1x | - |
| Tgb Banquets And Hotels ($TGBHOTELS) | 3.7x | 3.0x | 2.7x | 4.0x | - |
| Country Club (India) ($COUNCLB) | 2.0x | 1.8x | 3.2x | 3.5x | - |
| |
|---|
| Median (19 companies) | 1.8x | 2.0x | 0.9x | 0.3x | 1.5x |
|---|
| Oriental Hotels ($ORIENTHOT) | 4.3x | 4.6x | 6.0x | 5.5x | 6.5x |
