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Royal Orchid Hotels Net Income dropped on 58.9% and Revenue increased slightly on 0.59%

14-09-2020 • About Royal Orchid Hotels ($ROHLTD) • By InTwits

Royal Orchid Hotels reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
  • Royal Orchid Hotels has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's in pair with industry average of 6.8%
  • CAPEX is quite volatile: ₹617m in FY2020, ₹1,262m in FY2019, ₹317m in FY2018, ₹389m in FY2017, ₹227m in FY2016
  • The company has potentially unprofitable business model: ROIC is 3.4%
  • It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Royal Orchid Hotels's Revenue increased slightly on 0.59%. During FY2016-FY2020 Revenue growth topped in FY2017 at 10.3% and was decelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 16.5% to 14.9% in FY2020.

Net Income margin decreased on 3.5 pp from 5.9% to 2.4% in FY2020.

Investments (CAPEX, working capital and M&A)


In FY2020 the company had CAPEX/Revenue of 2.4%. The company showed decline in CAPEX/Revenue of 2.1 pp from 4.5% in FY2017 to 2.4% in FY2020. Average CAPEX/Revenue for the last three years was 2.1%.

Return on investment


The company operates at low ROIC (3.4%) and ROE (2.8%). ROIC decreased on 2.7 pp from 6.1% to 3.4% in FY2020. ROE decreased on 4.1 pp from 6.9% to 2.8% in FY2020.

Leverage (Debt)


Debt level is 3.6x Net Debt / EBITDA and 5.0x Debt / EBITDA. Net Debt / EBITDA surged on 2.2x from 1.5x to 3.6x in FY2020. Debt surged on 66.0% while cash decreased on 3.5%.

Royal Orchid Hotels has no short term refinancing risk: cash is higher than short term debt (249.0%).

Financial and operational results


FY ended 31-03-2020

Royal Orchid Hotels ($ROHLTD) key annual financial indicators

mln. INR201620172018201920202020/2019
P&L
Revenue1,5851,7491,8952,0382,0500.6%
EBITDA206206295336306-8.9%
Net Income-13-353411949-58.9%
Balance Sheet
Cash136225264415400-3.5%
Short Term Debt102333327161500.9%
Long Term Debt5951,0099618871,35652.9%
Cash flow
Capex687935435016.2%
Ratios
Revenue growth7.3%10.3%8.3%7.6%0.6%
EBITDA growth3.6%0.0%43.1%13.9%-8.9%

EBITDA Margin13.0%11.8%15.6%16.5%14.9%-1.6%
Net Income Margin-0.8%-2.0%1.8%5.9%2.4%-3.5%
CAPEX, % of revenue4.3%4.5%1.8%2.1%2.4%0.3%

ROIC2.5%1.5%4.3%6.1%3.4%-2.7%
ROE-0.8%-2.1%2.0%6.9%2.8%-4.1%
Net Debt/EBITDA2.7x4.0x2.5x1.5x3.6x2.2x

Royal Orchid Hotels ($ROHLTD) key quoterly financial indicators

mln. INRFY20Q1FY20Q2FY20Q3FY20Q4 YoY change
P&L
Revenue485469613483 ----
EBITDA664614840 ----
Net Income8-457-9 ----
Balance Sheet
Ratios
EBITDA Margin 13.6% 9.8% 24.1% 8.3% ----
Net Income Margin 1.6% -0.9% 9.2% -1.9% ----

Peers in Hotels


Below you can find Royal Orchid 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.