INDIAN HOTEL

This company, which operates hotels all across India and abroad under the ‘Taj’ brand of hotels, not surprisingly, posted a consolidated loss in this quarter too, the third consecutive quarter. In Q1FY14, the only saving grace is that its net loss came in at Rs.19 crore, down from loss of Rs.33 crore in Q1FY13 and loss of Rs.389 crore in Q4FY13. Despite higher topline, interest outgo, exchange loss of Rs.8 crore and provision for tax at Rs.12 crore pushed the company into the red. Its operating costs also rose 6% (YoY). 38% of the total cost comprises of employee benefit expenses.

In FY13, the company had a total interest outgo of Rs.171 crore. Its total debt at end of FY13 stood at Rs.3818 crore and this is indeed eating away a major portion of the earnings. The company is said to be working on a restructuring plan to move all its overseas assets into a step-down subsidiary. But that was the plan at end of FY13; now we hear that the company is looking to sell stakes in its overseas assets to bring down the debt. Indian Hotels has opened two new hotels with 175 rooms in India since April and plans to add 1,575 rooms across 12 domestic properties by March next year. And by the end of March 2015, it has planned another 1553 rooms. With the rupee depreciating, there is hope that travel to India will become lucrative for foreign tourists and Indian Hotels could see a jump in occupancy.