Overview of the Bharat Hotels

(i) They are one of the leading privately-owned domestic hotel brands in India, according to the CRISIL Report, engaged in the business of operating and managing hotels, palaces, and resorts, with a focus on the luxury segment. As at March 31, 2018, they operated 12 luxury hotels, palaces and resorts under The Lalit brand and two mid-market segment hotels under The Lalit Traveller brand across India‘s key business and leisure travel destinations, offering 2,261 rooms.

(ii) In addition, they hold the exclusive rights to provide management consultancy services in connection with the operation and management of a hotel in London, The Lalit London, which offered 70 rooms as of March 31, 2018.

(iii) The luxury hotels operating across India under The Lalit brand are grouped into the following three categories:

a) City hotels: The LaLiT New Delhi, The LaLiT Mumbai, The LaLiT Ashok Bangalore, The LaLiT Great Eastern Kolkata, The LaLiT Jaipur, and The LaLiT Chandigarh.

b) Palaces: The Lalit Laxmi Vilas Palace Udaipur and The LaLiT Grand Palace Srinagar.

c) Resorts: The LaLiT Golf & Spa Resort Goa, The LaLiT Resort & Spa Bekal (Kerala), The LaLiT Mangar, and The LaLiT Temple View Khajuraho.

Future Plans of Bharat Hotels

(i) Going forward, they intend to develop three new hotels under The LaLiT brand in Ahmedabad, Mangalore, and Dehradun which will, in aggregate, offer 290 rooms and 115 cottages, when completed.

(ii) They also intend to develop 50 additional rooms at The LaLiT Laxmi Vilas Palace Udaipur.

(iii) They also operate two hotels in the mid-market segment under The LaLiT Traveller brand, which are The LaLiT Traveller Jaipur and The LaLiT Traveller Khajuraho. They intend to develop four new hotels under The LaLiT Traveller brand in Ahmedabad, Pune, Amritsar, and Chitrakoot which will, in the aggregate, offer 308 rooms, when completed.

(iv) Further, in the F&B segment, they operate 45 restaurants, bars, and bakery outlets as of March 31, 2018, across our hotels in India. They have developed their own brands, such as 24/7, Baluchi, OKO, The LaLiT Boulangerie, Kitty Su, and The LaLiT Food Truck Company.

Business Performance Bharat Hotel FY19-20

1. The Lalit Suri Hospitality Group was recording a steady growth in its revenues in the last financial year until the set-back in the last quarter from January 2020 onwards due to the COVID-19 pandemic. Because of almost negligible business from January onwards, Bharat Hotel came in the loss in FY19-20.

2. Due to COVID-19, the hospitality sector was affected quite badly. With social distancing, quarantine measures, travel bans, etc., it is expected that hospitality will take a longer time to revive. Plus the fixed cost is the same as before and with revenue declining, Bharat Hotel has faced liquidity issues in the business.

3. In order to increase the revenue during the lockdown, some of the hotels have accommodated doctors on COVID 19 duty at hospitals at fixed rates to be paid by the Government. Apart from this, Bharat Hotel has also started home delivery of bakery, confectionery, and gourmet hampers. The Company is also exploring possibilities of digital channels to make more products and services available to guests like Ayurveda doctor consultancy, wellness packages, chef at home, bartender at home, Kitty comes home, industrial catering.

Business and Operation performance of Bharat Hotel in FY20-21

1.  Bharat Hotel Unlisted Share has recorded unprecedented decline in revenue and losses on both standalone and consolidated basis during the last financial year amid the COVID-19 crisis. The business operations of the Company were severely disrupted during the first-half of last year due to lockdown, travel restrictions and other control measures implemented by the Government to contain the spread of the pandemic.

2. During this period some of the hotels were accommodating doctors on COVID-19 duty at fixed rates paid by the Government. The hotels pan-India could not fully operationalise even by the end of year 2020 and witnessed huge reduction in their operating cashflows that has put abrupt pressure on liquidity levels of the Company.

3. Bharat Hotel had put up a strong impetus on cost optimization by reviewing all expenses to ensure only the very critical expenses were incurred; the Company has been able to generate a positive EBIDTA despite substantial reduction in the revenue.

4. Several strategic initiatives have been taken to reinstate the business including consolidation of various units of the Company and discontinuation of unprofitable or onerous operations. To better manage its liquidity position, the Company has restructured its existing borrowings from various banks under the RBI guidelines on “Resolution Framework for COVID-19 related Stress”.

5. The revenue of Bharat Hotel declined from 729 Crores in FY20 to 172 Crores in FY21. 6. Bharat Hotel has incurred a loss of ~90 Crores in FY20-21.

Business and Operational Performance of Bharat Hotel in Fy22-23

Bharat Hotels Limited (BHL), a prominent player in the Indian hospitality sector, has recently released its annual financial report for the fiscal year 2022-23. The report reveals a compelling narrative of remarkable financial recovery and growth, following a challenging period due to the COVID-19 pandemic. In this blog, we will dissect the key highlights from the annual report and what they signify for investors evaluating BHL's prospects.

Financial Performance Highlights A Surge in Revenue



The first thing that stands out from the report is the phenomenal revenue growth. BHL recorded a 117% increase in its revenue from operations, climbing to Rs. 800 crore in FY 2022-23 from Rs. 369 crore in FY 2021-22. This surge can be attributed to the successful vaccination drive, reopening of international borders, and the overall economic growth in the country.

A Closer Look at Expenses and Profits

While total expenses also increased by 88% to Rs. 444 crore, the rise is considerably less than the revenue growth, indicating improved operational efficiency. More impressively, BHL's EBITDA soared by 162% to Rs. 364 crore, showcasing an enhanced ability to generate income from its operations. Profit Before Tax (PBT) and Net Profit also displayed significant improvements. PBT registered a 230% increase, reaching Rs. 134 crore, turning around from a loss of Rs. (103) crore in the previous fiscal. Net Profit rose to Rs. 50 crore, marking a 129% increase and recovering from a loss of Rs. (59) crore in FY 2021-22.

Cash Flow Insights

Strong cash flow management is crucial for any business, and BHL appears to have excelled in this area. The company generated robust net cash from operating activities, reaching Rs. 317 crore, an increase from Rs. 136 crore in the previous year. BHL also showed positive trends in cash flow from investing activities and improved cash flow from financial activities.

Strategic Financial Moves

During FY 2022-23, BHL issued 1,10,000 Non-Convertible Debentures to repay existing debt. This move not only helped the company clear its loans but also signaled strong financial management to potential investors.

The Bigger Picture

Founded in 1981 by Lalit Suri, BHL has been a leader in the Indian hospitality industry. Its portfolio includes premium properties such as The Lalit New Delhi, The Lalit Mumbai, and The Lalit Jaipur. The financials for FY 2022-23 indicate that the company has not only weathered the storm of the COVID-19 pandemic but is also well-positioned for future growth.

Conclusion

Bharat Hotels Limited's financial performance for FY 2022-23 reveals a success story of resilience and strategic financial management. The company has managed to turn the tide with impressive revenue growth, profitability, and cash flow management. For those looking to invest in the hospitality sector, BHL's recent financial performance offers compelling evidence of a company on the rise, making it a candidate worthy of consideration.

Bharat Hotel Unlisted Share Financial Analysis of FY24

a) Balance Sheet and Cash Flow Analysis

As of March 31, 2024, Bharat Hotel's total debt stands at INR 1,019 crore in long-term debt and INR 87 crore in short-term debt. This marks a significant reduction in long-term debt from INR 1,300 crore the previous year, although short-term debt has increased from INR 27 crore.

The company's gearing ratio, a key Debt/Equity metric, has improved from 59% to 51%, indicating a positive trend. To understand how Bharat Hotel has managed to reduce its debt, we turn to the Cash Flow Statement.

For FY24, the company generated INR 374 crore from operations and INR 37 crore from investing activities, primarily through the sale of some properties. This totals to INR 411 crore. Bharat Hotel used these funds to pay off INR 245 crore in long-term debt. The finance cost on loans paid during FY24 was INR 164 crore. In total, the company paid off approximately INR 410 crore in debt liabilities. This indicates that the cash generated from operations and asset sales was fully utilized to reduce debt and payment of interest. The company ended the fiscal year with INR 40 crore in cash on its books.

On the current assets front, as of March 31, 2024, Bharat Hotel has approximately INR 150 crore, while its current liabilities stand at INR 278 crore. Breaking down the liabilities, the company owes INR 80 crore to major creditors, INR 10 crore to small enterprises, INR 25 crore in statutory dues. To meet these obligations, Bharat Hotel has INR 25 crore in trade receivables and INR 75 crore in cash and bank balances. This situation suggests that the company is operating on a tight cash flow in the short term, with its current ratio indicating a "mouth-to-mouth" operating status.

In conclusion, Bharat Hotel has made commendable efforts to improve its balance sheet post-COVID. The improvements are largely due to strong operational performance and strategic asset sales, leading to a healthier financial position compared to the previous year.

b) Profit and Loss Statement (P&L)

Bharat Hotel's revenue increased from INR 800 crore to INR 870 crore in FY24, representing an 8.75% growth. The company's EBITDA also saw a slight increase from INR 364 crore last year to INR 370 crore this year, with an EBITDA margin of 42%. Profit After Tax (PAT) improved significantly, rising from INR 50 crore to INR 84 crore.