SAMHI Hotels –
Q1 FY 25 results and concall highlights –
Company profile – Operate a total of 31 Hotels, 4800 rooms in 13 cities under 8 brand names
Upscale Hotel rooms – 1074. These include properties like –
Hyatt @ Gurugram and Pune
Sheraton @ Hyderabad
Renaissance @ Ahemdabad
Courtyard @ Bengaluru
Total – 5 hotels
Upper Midscale Hotel rooms – 2163. These include properties like –
Four Points @ Pune, Vizag, Jaipur, Chennai
Fairfield by Marriot @ Bengaluru (03 hotels), Coimbatore, Chennai (02 hotels), Hyderabad, Goa, Ahmedabad
Caspia @ Delhi
Total – 14 hotels
Midscale hotel rooms – 1564. These include properties like –
Holiday Inn Express @ Pune (02 hotels), Ahmedabad, Bengaluru, Nasik, Hyderabad ( 02 Hotels ), Gurugram, Chennai, Nahsik
Caspia Pro @ Noida
Total – 12 hotels
Q1 FY 25 outcomes –
Revenues – 256 vs 191 cr, up 33 pc YoY
EBITDA – 89 vs 47 cr ( margins @ 35 vs 25 pc – huge margin expansion, ESOP costs fell from 11 cr to 4.5 cr YoY )
PAT – 4 vs (-) 83 cr ( finance costs fell from 107 cr to 55 cr YoY )
Net Debt stands @ 1862 as on 30 Jun 24 vs 2938 cr as on 30 Jun 24. Cost of debt @ 9.7 pc vs 13 pc YoY – basically a massive improvement on this particular aspect
Q1 RevPar @ Rs 4276 vs Rs 3662, up 13 pc YoY
Breakdown of revenues ( segment wise ) –
Upscale – 43 pc ( RevPar growth @ 21 pc, Occupancy @ 79 vs 74 pc, 32 pc of revenues from F&B )
Upper Midscale – 43 pc ( Rev Par growth @ 9 pc, Occupancy @ 72 vs 72 pc, 23 pc of revenues from F&B )
Midscale – 14 pc ( Rev Par growth @ 4 pc, occupancy @ 74 vs 72 pc, 9 pc of revenues from F&B )
Schedule to be operationalised by Q3 FY 25 ( a total of 302 additional rooms with an annual revenue potential of 25-30 cr ) –
Opening of Holiday Inn express – Kolkata ( will add 110 rooms )
Addition of rooms in Holiday Inn express – Bengaluru ( will add 54 rooms )
Renovation and rebranding of Caspia Pro greater Noida to Holiday Inn Express ( will add 137 rooms )
Addition of 22 rooms @ Hayatt regency Pune
Addition of 12 rooms @ Sheraton Hyderabad
Company believes their EBITDA margins have a material scope for improvement as Q1 is generally the weakest Qtr ( seasonally )
Rapid expansion of Office spaces and Aviation Industry augurs well for the company ( as they primarily run Business hotels in Tier-1,2 cities )
India added 9 million Sq Ft of office space in Q1 out of which, 67 pc came up in Hyderabad, Pune, Bengaluru and Delhi NCR – which are all company’s core markets
Expect EBITDA margins to go to 40 pc levels in Q3, Q4
Expect the cost of debt to fall further to 9.5 pc in next 6-9 months
Not seeing speedy supply build up in the markets like – Hyderabad, Pune, Delhi NCR – should augur well for company’s ARRs and occupancies. Only significant supply addition ( ie new hotels ) that’s happening right now is at Gurugram – Aerocity area
In any case, supply addition in the Industry is unlikely to be > 4-5 pc ( avg across all major markets ) where as the demand growth is much higher than this
Over and above the 302 new rooms that the company intends to operationalise by Q3, they also intend to add another 200-300 rooms via inorganic route. They ll announce the same when they strike a deal. They aim to keep adding inventory @ 10-15 CAGR for foreseeable future
Confident of generating 225 – 250 cr of free cash in current FY. Plus they are holding a cash surplus of Rs 300 cr. So – the liquidity position going forward should be comfortable to fund inorganic growth and deleveraging the balance sheet at the same time
Total capex expected for FY 24 @ 140 cr
Seeing improved occupancies in July, Aug vs Q1. Also expecting a further ramp up in F&B sales wef Q2 as Q1 was muted wrt Conferences, Meetings, Seminars etc because of general elections
Disc: holding, biased, added recently, not SEBI registered, not a buy/sell recommendation
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