Mahindra Holidays & Resorts India reports 97.2% revenue growth in FY2016 and 1.3 pp EBITDA Margin decline from 16.1% to 14.8%
17-05-2016 • About Mahindra Holidays & Resorts India (
$MHRIL) • By InTwits
Mahindra Holidays & Resorts India reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mahindra Holidays & Resorts India is a fast growth stock: FY2016 revenue growth was 97.2%, 5 year revenue CAGR was 24.2% at FY2016 ROIC 10.0%
- EBITDA Margin is declining: 14.8% in FY2016 vs. 16.1% in FY2015 vs. 17.4% in FY2012
- Mahindra Holidays & Resorts India has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.7%. At the same time it's a lot of higher than industry average of 11.1%.
- CAPEX is quite volatile: ₹273m in FY2016, ₹261m in FY2015, ₹80m in FY2014, ₹252m in FY2013, ₹729m in FY2012
- The company has business model with average profitability: ROIC is 10.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Mahindra Holidays & Resorts India's Revenue surged on 97.2%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 16.1% to 14.8% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2013 at 22.9% and was declining since that time.
Net Income margin decreased on 4.1 pp from 10.8% to 6.7% in FY2016. Net Income margin stuck to a declining trend at -2.4 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Mahindra Holidays & Resorts India had CAPEX/Revenue of 12.6%. Mahindra Holidays & Resorts India's CAPEX/Revenue dropped on 13.9 pp from 26.5% in FY2013 to 12.6% in FY2016. Average CAPEX/Revenue for the last three years was 15.3%. Mahindra Holidays & Resorts India invested a big chunk of EBITDA (85.2%) to CAPEX to fuel its growth. CAPEX as a % of Revenue stuck to a declining trend at -3.5 pp per annum in FY2012-FY2016.
Return on investment
The company operates at good ROE (14.2%) while ROIC is low (10.0%). ROIC increased on 3.7 pp from 6.3% to 10.0% in FY2016. ROE increased on 3.3 pp from 10.9% to 14.2% in FY2016. During the last 5 years ROE bottomed in FY2015 at 10.9%.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA jumped on 1.8x from 0.9x to 2.7x in FY2016. Debt jumped on 469% while cash jumped on 487%. During the last 5 years Net Debt/EBITDA bottomed in FY2014 at -0.3x and was growing since that time.
Mahindra Holidays & Resorts India has no short term refinancing risk: cash is higher than short term debt (151.2%).
Valuation and dividends
The company's trades at EV/EBITDA 19.6x and P/E 37.3x while industy averages are 17.8x and 21.9x. Mahindra Holidays & Resorts India's EV/(EBITDA-CAPEX) is 132.2x with the industry average at 22.8x.
Management team
The company's CEO is Kavinder Singh. Kavinder Singh has 5 years tenure with the company. Mahindra Holidays & Resorts India's CFO is S Krishnan. S Krishnan has 5 years tenure at the company.
Financial and operational results
Mahindra Holidays & Resorts India ($MHRIL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,781 | 7,386 | 8,164 | 7,509 | 14,808 | 97.2% |
| EBITDA | 1,005 | 1,688 | 1,605 | 1,209 | 2,195 | 81.5% |
| Net Income | 1,023 | 909 | 870 | 812 | 991 | 22.0% |
Balance Sheet
|
|---|
| Cash | 150 | 421 | 451 | 187 | 1,096 | 486.6% |
| Short Term Debt | 23 | 36 | 29 | 64 | 725 | 1,030.4% |
| Long Term Debt | 66 | 54 | 0 | 1,174 | 6,321 | 438.5% |
Cash flow
|
|---|
| Capex | 1,501 | 1,957 | 1,256 | 1,350 | 1,870 | 38.6% |
Ratios
|
|---|
| Revenue growth | 15.5% | 27.8% | 10.5% | -8.0% | 97.2% | |
| EBITDA growth | -20.4% | 67.9% | -4.9% | -24.7% | 81.5% | |
|
|---|
| EBITDA Margin | 17.4% | 22.9% | 19.7% | 16.1% | 14.8% | -1.3% |
| Net Income Margin | 17.7% | 12.3% | 10.7% | 10.8% | 6.7% | -4.1% |
| CAPEX, % of revenue | 26.0% | 26.5% | 15.4% | 18.0% | 12.6% | -5.3% |
|
|---|
| ROIC | 13.4% | 22.2% | 16.3% | 6.3% | 10.0% | 3.7% |
| ROE | 19.2% | 15.5% | 12.7% | 10.9% | 14.2% | 3.3% |
| Net Debt/EBITDA | -0.1x | -0.2x | -0.3x | 0.9x | 2.7x | 1.8x |
Peers in Hotels
Below you can find Mahindra Holidays & Resorts India 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 ($RAYALEMA) | - | 2.2% | 5.5% | 18.9% | -16.0% |
| The Byke Hospitality ($THEBYKE) | 47.6% | 105.7% | 54.3% | 16.5% | - |
| Eih ($EIHOTEL) | - | 4.4% | 5.3% | 7.9% | -0.6% |
| |
|---|
| Median (15 companies) | 17.0% | 8.6% | 5.5% | 3.4% | -0.6% |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | - | 27.8% | 10.5% | -8.0% | 97.2% |
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) ($COUNCLB) | 34.2% | 32.3% | 24.2% | 23.7% | - |
| |
|---|
| Median (20 companies) | 21.9% | 22.6% | 21.0% | 20.8% | 15.8% |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | 17.4% | 22.9% | 19.7% | 16.1% | 14.8% |
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) ($COUNCLB) | 58.7% | 36.6% | 49.6% | 28.5% | - |
| Eih ($EIHOTEL) | 13.6% | 12.0% | 7.1% | 9.0% | 5.5% |
| Oriental Hotels ($ORIENTHOT) | 24.3% | 17.7% | 13.1% | 7.5% | 6.5% |
| |
|---|
| Median (11 companies) | 30.8% | 17.6% | 8.8% | 4.9% | 5.5% |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | 26.0% | 26.5% | 15.4% | 18.0% | 12.6% |
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% | 19.6% |
| Eih ($EIHOTEL) | 5.5% | 4.5% | 5.8% | 6.3% | 6.6% |
| Country Club (India) ($COUNCLB) | 8.8% | 8.9% | 5.4% | 5.3% | - |
| Oriental Hotels ($ORIENTHOT) | 6.4% | 4.3% | 2.7% | 3.8% | 2.5% |
| |
|---|
| Median (29 companies) | 5.4% | 4.7% | 2.8% | 2.3% | 4.6% |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | 13.4% | 22.2% | 16.3% | 6.3% | 10.0% |
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) ($AHLEAST) | -0.0x | 9.8x | 8.9x | 7.1x | - |
| Oriental Hotels ($ORIENTHOT) | 4.3x | 4.6x | 6.0x | 5.5x | 6.5x |
| Tgb Banquets And Hotels ($TGBHOTELS) | 3.7x | 3.0x | 2.7x | 4.0x | - |
| |
|---|
| Median (19 companies) | 2.0x | 2.3x | 1.0x | 0.3x | 0.3x |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | -0.1x | -0.2x | -0.3x | 0.9x | 2.7x |
