Some thoughts:

Royalty to biotools is probably clubbed into business expenses

Np details of shareholder 2BBlackBio who own 2.81%. They were undergoing liquidation, no idea what happened. Doesn’t matter IMO

Real question: 3BB listed as a distributor for Bio Tools. Are 3BB just importing and selling? Need to check

80% sales to Vivid technology (proprietorship) owned by Prateek Goel (listed under public shareholders owing 5%). Worth checking

Sami Hotels Limited Q2 FY25 Earnings Conference Call Summary

Financial Performance

• Asset income, representing revenue generated from hotels, reached INR 266 crores, a 20% year-over-year increase. This growth was driven by strong same-store sales and the inclusion of the recently acquired AIC portfolio.
• Same-store asset revenue experienced a robust 13.3% year-over-year growth, leading to a 20.2% EBITDA growth and a margin expansion of nearly 40%.
• Asset EBITDA, reflecting hotel-level profitability, reached INR 104 crores, a 28% year-over-year increase.
• Asset EBITDA margin was 39.1% for the quarter, slightly diluted by the AIC portfolio which stood at 36%. Management anticipates material margin improvement in upcoming quarters as the integration of AIC properties continues.
• Consolidated EBITDA reached INR 97 crores, marking an impressive 80% year-over-year growth. The consolidated margin also reached 36%, with potential for further expansion.
• Depreciation expense and finance costs remained stable at INR 29 crores and INR 56 crores, respectively.
• Reported profit after tax stood at INR 12.6 crores.
• Management expects material EBITDA expansion in the second half of FY25 due to higher revenue and strong flow-through, driven by average room rate (ARR) growth.

Margin Guidance

• Seasonally stronger H2 FY25 is anticipated to result in substantial margin expansion, driven by increased EBITDA, stable depreciation, and stable finance costs.
• Integration of the AIC portfolio is expected to significantly improve margins.

Segment Performance

• Same-store assets (excluding recently acquired and pre-opening properties) demonstrated strong performance, achieving 16.5% year-on-year RevPAR growth in Q2.
• Upscale hotels in Bangalore and Hyderabad showed significant potential with trailing twelve-month revenue exceeding INR 50 lakhs per room.
• The recently acquired AIC portfolio is undergoing integration and conversion to managed hotels under Marriott, leading to margin improvements.
• Two midscale AIC hotels in Pune and Jaipur are being rebranded and repositioned as upscale Courtyard by Marriott and Tribute Portfolio hotels, respectively.
• Management anticipates that the share of upscale hotels in their portfolio will increase significantly, leading to higher revenue per key.

Management Guidance for the Future

• Sami Hotels has secured three new upscale and upper upscale hotels with approximately 525 rooms in Bangalore and Hyderabad.
• These additions are expected to materially augment portfolio growth and drive incremental revenue over the next 3-4 years.
• Internal growth levers, including the integration of AIC properties, renovation, and rebranding initiatives, are expected to improve performance further.
• The company is progressing with recycling capital through the sale of non-strategic assets to maintain a strong balance sheet and reduce leverage.
• Management emphasizes their focus on capital efficient growth and finding opportunities suitable for different market cycles.

Key Risks in the Business

• Potential downward cycles in the industry, impacting demand and profitability.
• Capacity constraints in the aviation industry, limiting passenger traffic and potentially affecting hotel demand.
• Execution risks associated with new hotel projects, including delays and cost overruns.
• Competition from other hotels in key markets.

Industry Trends

• Bangalore and Hyderabad markets continue to demonstrate strong growth, absorbing significant office space and experiencing high air passenger growth.
• Office space absorption in these markets indicates robust demand and positive economic activity.
• The hotel industry is experiencing slower supply growth compared to office space additions, creating a favorable demand-supply dynamic.
• Aviation capacity constraints are impacting passenger traffic, potentially influencing hotel demand in the short term.

Disc:Invested

I received the email yesterday.

Reversion-to-mean and operating leverage playing out superbly here! Revenue growth at 8%, but EBITDA/PAT has grown 20%/70% respectively (YoY).

Gross margin up from ~54% to ~60% and the prior front-loading of expenses which had been depressing profits is reversing (Interest + depreciation has stabilized over the last 4 quarters, while revenue is growing).

Business momentum looking good (personal care and recyclable tubes).

PS: Invested