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The Byke Hospitality demonstrated fast growth over the last few years. Will the growth continue?

27-05-2016 • About The Byke Hospitality ($THEBYKE) • By InTwits

Pay attention to The Byke Hospitality as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


The Byke Hospitality showed fast growth in the last financial year. The company's revenue surged on 27.6% in FY2016. At the same time the company well managed its profitability and showed even faster growth in EBITDA of 41.3% for the same period.

In the longer period The Byke Hospitality showed fast revenue growth of 31.9% from FY2013 to FY2016 annually. EBITDA surged on 44.2% from FY2013 to FY2016 annually.

The Byke Hospitality ($THEBYKE) financials for the last 5 years

mln. INR FY2012 FY2013 FY2014 FY2015 FY2016
Revenue4911,0091,5571,8142,315
Revenue growth, %105.7%54.3%16.5%27.6%
SG&A, %
EBITDA51175286372526
EBITDA growth, %241.4%62.8%30.3%41.3%
EBITDA margin, %10.5%17.4%18.3%20.5%22.7%
Net Income2478159200259
Net Income margin, % 4.89%7.69%10.2%11.0%11.2%
 
CAPEX1641589088183
CAPEX/Revenue, %33.3%15.7%5.76%4.86%7.92%
Debt15819914512482
Cash2010192229
Net Debt/EBITDA2.7x1.1x0.4x0.3x0.1x
 
ROIC, %5.3%14.5%22.6%24.1%32.0%
ROE, %3.7%11.1%20.2%21.7%23.4%

Profitability and return on investment


Margin expansion supported EBITDA growth. The company showed fast EBITDA margin growth of 2.20 pp from 20.5% to 22.7% in FY2016. In the last 3 years the company showed fast EBITDA margin growth of 5.30 pp from 17.4% in FY2013 to 22.7% in FY2016.

The Byke Hospitality shows attractive ROIC at 32.0% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 14.5%. It's average ROIC for the last three years was 26.2%.

Net Income margin increased slightly on 0.200 pp from 11% to 11.2% in FY2016. If we look for the longer period Net Income margin surged on 3.50 pp from 7.70% in FY2013 to 11.2% in FY2016.

The Byke Hospitality operates at ROE of 23.4%. It's average ROE for the last three years was 21.8%.

Capital expenditures (CAPEX)


To this fast growth the company had to invest in CAPEX.In FY2016 The Byke Hospitality had CAPEX/Revenue of 7.92%. CAPEX/Revenue dropped on 7.77 pp from 15.7% in FY2013 to 7.92% in FY2016. Average CAPEX/Revenue for the last three years was 6.18%.

Leverage (Debt)


The Byke Hospitality has low debt level at 0.1x Net Debt/EBITDA - at the same time with high growth. In the longer period The Byke Hospitality showed big decline in leverage of 0.97x from 1.07x in FY2013 to 0.10x in FY2016.

Valuation vs. comparable companies


The company trades at 13.2x EV/EBITDA which is 46.1% lower than 24.5x Hotels industry avearge calculated based on 65 companies. The company trades at 26.6x P/E which is 33.2% lower than 39.8x Hotels industry avearge calculated based on 5 companies.

For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today The Byke Hospitality traded at 20.3x EV/(EBITDA-CAPEX) which is 32.8% lower than 30.2x Hotels peer group avearge calculated on the basis of 6 companies.

Peers in Hotels


Below we provide The Byke Hospitality benchmarking against other companies in Hotels industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
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 ($RAYALEMA)2.2%5.5%18.9%-16.0%
Eih ($EIHOTEL)12.4%4.4%5.3%7.9%
India Tourism Development Corporation ($ITDC)6.9%3.2%7.1%7.2%
 
Median (15 companies)15.2%8.6%5.5%3.1%3.7%
The Byke Hospitality ($THEBYKE)105.7%54.3%16.5%27.6%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
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%20.3%14.8%
The Byke Hospitality ($THEBYKE)10.5%17.4%18.3%20.5%22.7%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
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%12.6%
Eih ($EIHOTEL)13.6%12.0%7.1%9.0%
 
Median (11 companies)26.0%22.1%11.4%7.5%9.6%
The Byke Hospitality ($THEBYKE)33.3%15.7%5.8%4.9%7.9%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Advani Hotels & Resorts (India) ($ADVANIHOTR)15.9%19.6%
Eih ($EIHOTEL)5.5%4.5%5.8%6.3%
Mahindra Holidays & Resorts India ($MHRIL)13.4%22.2%16.3%6.3%10.0%
Country Club (India) ($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)5.9%4.7%2.8%2.3%10.0%
The Byke Hospitality ($THEBYKE)5.3%14.5%22.6%24.1%32.0%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Hotel Leelaventure ($HOTELEELA)62.5x40.2x33.5x46.7x
Asian Hotels (North) ($ASIANHOTNR)28.4x11.0x15.4x24.8x
Asian Hotels (East) ($AHLEAST)-0.0x9.8x8.9x7.1x
Oriental Hotels ($ORIENTHOT)4.3x4.6x6.0x5.5x6.5x
Tgb Banquets And Hotels ($TGBHOTELS)3.7x3.0x2.7x4.0x
 
Median (19 companies)1.8x2.3x1.0x0.7x0.2x
The Byke Hospitality ($THEBYKE)2.7x1.1x0.4x0.3x0.1x


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