Eih CAPEX surged on 182% while Revenue decreased on 8.0%
30-05-2017 • About Eih (
$EIHOTEL) • By InTwits
Eih reported FY2017 financial results today. Here are the key drivers of the company's long term financial model:
- Eih has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.1%. At the same time it's in pair with industry average of 12.1%
- CAPEX is quite volatile: ₹2,592m in FY2017, ₹919m in FY2016, ₹1,498m in FY2015, ₹1,094m in FY2014, ₹1,767m in FY2013
- The company has potentially unprofitable business model: ROIC is 4.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 8.0%. During FY2013-FY2017 Revenue growth topped in FY2015 at 7.9% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.7 pp from 20.8% to 17.1% in FY2017. During FY2013-FY2017 EBITDA Margin topped in FY2015 at 22.7% and was declining since that time.
Net Income margin decreased slightly on 1.1 pp from 7.9% to 6.8% in FY2017.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 17.0% in FY2017. CAPEX/Revenue increased on 9.9 pp from 7.1% in FY2014 to 17.0% in FY2017. For the last three years the average CAPEX/Revenue was 10.5%. Battling declining revenue the company invested a large share of EBITDA (99.2%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (4.0%) and ROE (3.7%). ROIC decreased on 2.7 pp from 6.6% to 4.0% in FY2017. ROE decreased slightly on 1.2 pp from 4.9% to 3.7% in FY2017. During FY2013-FY2017 ROIC topped in FY2016 at 6.6%.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 1.4x. Net Debt / EBITDA jumped on 0.5x from 0.3x to 0.8x in FY2017. Debt surged on 30.5% while cash decreased on 7.0%. During FY2013-FY2017 Net Debt/EBITDA bottomed in FY2016 at 0.3x.
Eih has no short term refinancing risk: cash is higher than short term debt (108.0%).
Financial and operational results
FY ended 31-03-2017
Eih ($EIHOTEL) key annual financial indicators| mln. INR | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 14,685 | 15,466 | 16,683 | 16,589 | 15,268 | -8.0% |
| SG&A | | | | 424 | | |
| EBITDA | 2,967 | 3,358 | 3,779 | 3,451 | 2,611 | -24.3% |
| Net Income | 418 | 1,071 | 631 | 1,311 | 1,031 | -21.3% |
Balance Sheet
|
|---|
| Cash | 1,164 | 1,213 | 1,369 | 1,681 | 1,563 | -7.0% |
| Short Term Debt | 3,621 | 1,987 | 1,985 | 1,849 | 1,447 | -21.7% |
| Long Term Debt | 3,819 | 2,531 | 2,196 | 902 | 2,142 | 137.6% |
Cash flow
|
|---|
| Capex | 1,767 | 1,094 | 1,498 | 919 | 2,592 | 182.1% |
Ratios
|
|---|
| Revenue growth | 4.4% | 5.3% | 7.9% | -0.6% | -8.0% | |
| EBITDA growth | -8.9% | 13.2% | 12.5% | -8.7% | -24.3% | |
|
|---|
| EBITDA Margin | 20.2% | 21.7% | 22.7% | 20.8% | 17.1% | -3.7% |
| SG&A, % of revenue | | | | 2.6% | | |
| Net Income Margin | 2.8% | 6.9% | 3.8% | 7.9% | 6.8% | -1.1% |
| CAPEX, % of revenue | 12.0% | 7.1% | 9.0% | 5.5% | 17.0% | 11.4% |
|
|---|
| ROIC | 4.5% | 5.8% | 6.3% | 6.6% | 4.0% | -2.7% |
| ROE | 1.6% | 4.1% | 2.4% | 4.9% | 3.7% | -1.2% |
| Net Debt/EBITDA | 2.1x | 1.0x | 0.7x | 0.3x | 0.8x | 0.5x |
Peers in Hotels
Below we provide Eih 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, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mahindra Holidays & Resorts India ($MHRIL) | 27.8% | 10.5% | -8.0% | 97.2% | - |
| The Byke Hospitality ($THEBYKE) | 105.7% | 54.3% | 16.5% | 27.6% | - |
| Sayaji Hotels ($SAYAJIHOTL) | 24.5% | 29.4% | -63.4% | 26.4% | - |
| Asian Hotels (West) ($AHLWEST) | -0.2% | 3.1% | 96.5% | 16.3% | - |
| Kamat Hotels (India) ($KAMATHOTEL) | 14.1% | -4.9% | -3.6% | 11.6% | - |
| |
|---|
| Median (15 companies) | 12.7% | 5.9% | 3.1% | 4.3% | 10.3% |
|---|
| Eih ($EIHOTEL) | - | 5.3% | 7.9% | -0.6% | -8.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Asian Hotels (North) ($ASIANHOTNR) | 22.9% | 26.9% | 18.5% | 29.4% | - |
| Asian Hotels (East) ($AHLEAST) | 23.7% | 21.8% | 23.5% | 28.2% | - |
| Hotel Leelaventure ($HOTELEELA) | 17.9% | 20.3% | 16.9% | 23.4% | - |
| Kamat Hotels (India) ($KAMATHOTEL) | 22.1% | 26.7% | 21.1% | 22.9% | - |
| The Byke Hospitality ($THEBYKE) | 17.4% | 18.3% | 20.5% | 22.7% | - |
| |
|---|
| Median (13 companies) | 22.9% | 20.0% | 20.0% | 20.7% | 11.8% |
|---|
| Eih ($EIHOTEL) | 20.2% | 21.7% | 22.7% | 20.8% | 17.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Country Club (India) ($COUNCLB) | 36.6% | 49.6% | 28.5% | 37.1% | - |
| Asian Hotels (North) ($ASIANHOTNR) | 60.2% | 37.2% | 36.1% | 26.8% | - |
| Sayaji Hotels ($SAYAJIHOTL) | 17.5% | 12.4% | 30.3% | 25.5% | - |
| Mahindra Holidays & Resorts India ($MHRIL) | 26.5% | 15.4% | 18.0% | 12.6% | - |
| The Byke Hospitality ($THEBYKE) | 15.7% | 5.8% | 4.9% | 7.9% | - |
| |
|---|
| Median (11 companies) | 22.1% | 11.4% | 4.9% | 6.5% | 4.5% |
|---|
| Eih ($EIHOTEL) | 12.0% | 7.1% | 9.0% | 5.5% | 17.0% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| The Byke Hospitality ($THEBYKE) | 14.5% | 22.6% | 24.1% | 32.0% | - |
| Advani Hotels & Resorts (India) ($ADVANIHOTR) | - | - | 15.9% | 19.6% | - |
| Mahindra Holidays & Resorts India ($MHRIL) | 22.2% | 16.3% | 6.3% | 10.0% | - |
| Country Club (India) ($COUNCLB) | 8.9% | 5.4% | 5.3% | 4.8% | - |
| Sayaji Hotels ($SAYAJIHOTL) | 9.4% | 14.2% | 1.3% | 3.6% | - |
| |
|---|
| Median (27 companies) | 5.0% | 2.8% | 2.3% | 2.8% | 1.5% |
|---|
| Eih ($EIHOTEL) | 4.5% | 5.8% | 6.3% | 6.6% | 4.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Hotel Leelaventure ($HOTELEELA) | 40.2x | 33.5x | 46.7x | 27.7x | - |
| Asian Hotels (North) ($ASIANHOTNR) | 11.0x | 15.4x | 24.8x | 15.9x | - |
| Oriental Hotels ($ORIENTHOT) | 4.6x | 6.0x | 5.5x | 6.5x | - |
| Tgb Banquets And Hotels ($TGBHOTELS) | 3.0x | 2.7x | 4.0x | 3.7x | - |
| Country Club (India) ($COUNCLB) | 1.8x | 3.2x | 3.5x | 3.6x | - |
| |
|---|
| Median (18 companies) | 2.2x | 0.9x | 0.3x | 1.5x | 4.0x |
|---|
| Eih ($EIHOTEL) | 2.1x | 1.0x | 0.7x | 0.3x | 0.8x |
