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

My point was the number of retail shareholders have jumped… so typically institutions start booking profits… and reenter at lower levels…
for my holding… I sold some at 260… but stopped as it was shooting up… just exited fully at 390. When i had invested 4-5 yrs back at 45 my target was 200 based on expected earnings and lower multiple… not to say 400+ is the wrong price… just that its multiple has gone up… the whole market has gone that way…

IDFC Ltd will be suspended with effect from October 10th. Last day it will trade is on October 9th.

It’s because of the illogical ESM framework. Has it not been ESM, the upside would have been adjusted in 2-3 days max.