GICS Industry : Hotels Restaurants & Leisure l Sub Industry : Hotels, Resorts & Cruise Lines l Website : www.tajhotels.

com

The Indian Hotels Company Ltd

Key Stock Indicators
NSE Ticker :
Bloomberg Ticker :
Face value / Share:
Div. Yield (%):

INDHOTEL
IH:IN
1.0
1.2

CMP (as on 09 Mar 2011Rs/share):

52-week range up to 09 Mar 2011 (Rs)(H/L):
Market Cap as on 09 Mar 2011 (Rs mn):
Enterprise Value as on 09 Mar 2011 (Rs mn):
Div. Yield (%):
0.0

Shares outstanding (mn) :

Free Float (%) :
Average daily volumes (12 months) :
Beta (2 year) :

83.1
118.00/76.05
63,074
103,383

The Indian Hotels Company Ltd (IHCL) is a member company of the Tata Group which consists of
other companies viz Tata Motots, Tata Steel, Tata Sponge Iron and others. IHCL is primarily
engaged into business of hoteliering. It also deals in air catering and ready to cook businesses. The
company was incorporated by the founder of the Tata Group, Mr.Jamsetji N Tata and the first
luxury hotel The Taj Mahal Palace Hotel, Mumbai was opened in 1903.

KEY HIGHLIGHTS
IHCL operates in varied segments with focus on luxury segment
The company operates in various different segments viz- luxury, premium, mid-market and value
segment. It offers luxury services with a brand Taj for the travelers looking for authentic luxury
experiences. Its Taj Exotica, a resort and a spa brand provides relaxing and exotic experiences,
Taj Safari hotels provide wildlife luxury experiences. Vivanta hotels are positioned as
contemporary and informal luxury hotels. Apart from these luxury hotels and resorts the company
operates through different brands such as The Gateway Hotel brand which is marketed as
upscale or mid market service hotels and resorts. The companys Ginger hotels are the economy
hotels targeting value segment. IHCL through these brands serves to different segments efficiently
Expansion Initiatives
During the year, IHCL opened 7 new domestic hotels which include Vivanta hotel at Goa, The
Gateway Hotel at Jodhpur and 5 Ginger hotels at Durg, Guwahati, Pune, Jamshedpur and Surat.
In FY10, the company acquired Sea Rock hotel at Bandra, Mumbai to develop luxury hotel and
land on lease from the Government of Andaman and Nicobar Islands to develop first 5-star hotel at
the island. In FY10, Taj Cape Town, South Africa was opened expanding international portfolio
while Vivanta by Taj Coral Reef, Maldives and The Pierre at New York were reopened after
renovation. IHCLs inventory as of March, 2010 stood at 103 hotels with 12,243 rooms.
Developing international operations
The company continued to invest in international markets by entering into strategic agreements for
hotels in Middle East, North Africa and South Africa. During the year IHCL entered into
management contracts for desert spa hotel in Al Ain, Abu Dhabi and has entered into
memorandum of understanding for managing properties in Egypt, Morocco, Mexico and British
Islands. In FY10, a new hotel at South Africa- Taj Cape Town was opened having an inventory
capacity of 166 rooms and reopened hotels located in Maldives and New York. International
business contributed ~27% of the total FY10s revenue against ~24% in FY09.

759.5
66.4
1,352,939
1.1

Key Financial Indicators

Mar-08
29,659.5
31.9
3,770.3
12.7
1.6
6.3
17.9
3.1
16.8
18.0
10.5

Revenue (Rs mn)

EBITDA ma rgi ns (%)
PAT (Rs mn)
PAT ma rgi ns (%)
Gea ri ng (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)

Mar-09
27,051.4
21.2
165.0
0.6
1.6
0.2
173.0
1.7
7.1
0.6
12.8

Mar-10
25,332.1
15.6
-5,001.9
-19.7
2.0
-6.9
n.m
3.3
3.6
n.m
25.4

n.m. : Not meaningful

Shareholding (As on December 31, 2010)

DII
26%

Others
26%

FII
14%
Promoter
34%

KEY RISKS

Heavy dependence on India, domestic business contributed ~73% of the revenues

Dependence on highly vulnerable luxury segment

Growing competition from international hotel chains

(index)
140

Increased outbound travel

120

6000

100

5000

80

4000

60

3000

40

2000

20

1000

Indexed price chart

-4

Volumes (RHS)

INDHOTEL

Jan-11

Feb-11

0
Dec-10

-9

Oct-10

-7

Nov-10

-2

Sep-10

-19

0
Jul-10

12-m

Aug-10

NIFTY

3-m

Jun-10

INDHOTEL

1-m

Apr-10

YTD

May-10

Returns (%)

Mar-10

Stock Performances vis--vis market

('000)
7000

NIFTY

Note:
1) YTD returns are since April 1, 2010 to Mar 09, 2011.
2) 1-m, 3-m and 12-m returns are up to Mar 09, 2011.

CRISIL COMPANY REPORT | 1

The Indian Hotels Company Ltd

BACKGROUND
IHCL is one of the leading luxury hotel companies in the world. IHCL and its subsidiary companies are collectively known as Taj hotels, resorts and palaces. The first luxury
hotel - The Taj Mahal Palace Hotel, Mumbai was opened in 1903. The companys hotels are located at various industrial cities, beaches, hill stations, historical places,
pilgrim centers and wildlife sanctuaries. Taj hotels, resorts and palaces are located in ~ 45 destinations across the world with international locations at Maldives, Malaysia,
Australia, UK, USA, Bhutan, Sri Lanka, Africa , the Middle East and others. The group had 103 hotels with 12,243 rooms as on March, 2010. The company segments its
business under three heads viz- hoteliering, air catering and others which comprises food processing and investment activities. Hoteliering business contributed ~89% of
the total FY10s revenues, air catering business ~10% and remaining 1% by others. While domestic operations contributed ~73% in FY10 the international business
contributed ~27% to the total revenues.

COMPETITIVE POSITION
Peer Comparison

Particulars
PeriodEndsOn
Revenue (Rs mn)
EBITDA ma rgi ns (%)
PAT (Rs mn)
PAT ma rgi ns (%)
Gea ri ng (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)

Indian Hotels
Company Ltd
Mar-10
25,332.1
15.6
-5,001.9
-19.7
2.0
-6.9
n.m
3.3
3.6
n.m
25.4

EIH Ltd
Mar-10
10,376.9
28.4
718.9
6.9
1.2
1.8
64.0
3.9
8.3
6.1
20.3

Asian Hotels Hotel Leelaventure

(North) Ltd
Ltd.
Mar-10
Mar-10
1,449.6
4,559.0
41.4
82.4
268.8
410.4
18.5
9.0
0.3
3.7
47.1
0.9
4.8
43.8
0.4
1.7
11.1
8.5
8.7
5.3
6.9
11.7

n.m: Not meaningful

FINANCIAL PROFILE

Key Financial Indicators

Top line drops by ~6%; operating margin declines significantly in FY10

Top-line declined from ~Rs.27 bn in FY09 to ~Rs.25 bn in FY10 as a result of
economic slowdown, resulting into low occupancy of rooms. The average room rate
also declined by ~16% in FY10.Closure of heritage wing rooms of the Taj Mahal
Palace and Tower, Mumbai was partially offset by reopening of New York based
hotel. Air catering business also declined by ~14% due to lowered demand from
aviation industry.
Increase in employee cost, power and fuel costs as a percentage of total revenues
led to decrease in operating margin, which stood at 15.6% in FY10 compared to
21.2% in FY09
Company recorded net loss of Rs.5 bn in FY10 against net profit of Rs.165 mn in FY09
primarily on account of increase in interest costs due to increment in debt raised to
repay foreign currency debt, incremental depreciation on new addition to the room
inventory mainly 120 rooms added to Lands End Hotel in Mumbai and the
Vivanta at Bangalore and decline in interest income on account of utilization of
funds for ongoing projects.

Revenue

Units

Mar-08

Mar-09

Mar-10

Rs mil li on

29,659.5

27,051.4

25,332.1

31.9

21.2

15.6

3,770.3

165.0

-5,001.9

12.7

0.6

-19.7

EBITDA ma rgins Per cent

PAT

Rs mil li on

PAT ma rgi ns

Per cent

Revenue growth Per cent

16.8

-8.8

-6.4

EBITDA growth

Per cent

25.6

-39.4

-31.2

PAT growth

Per cent

-3.4

-95.6

n.m

Gea ri ng

Ti mes

1.6

1.6

2.0

RoCE

Per cent

16.8

7.1

3.6

RoE

Per cent

18.0

0.6

n.m

INDUSTRY PROFILE
Premium segment hotels
Premium segment hotels (comprising 5-star deluxe (5-D) and 5-star hotels) accounted for 60 per cent of the overall hotel industry`s revenues in 2009-10. The hotel industry
in India witnessed robust growth during 2003-04 to 2008-09 with a growth in business-related travel and revenues per available room (RevPARs) registered a CAGR of 17
per cent. Due to limited supply, the hotels were able to charge high average room rates (ARRs). This escalation in hotel revenues backed by rapid economic growth led to
huge supply additions during 2006-07 and 2008-09. In the latter half of 2008-09, the hotels industry was severely hit due to reduced corporate spending on travel and low
foreign tourist arrivals due to the global economic crisis and the Mumbai terror attacks. However, the hotel room demand recovered to pre-crisis levels of 2007-08 in the
latter half of 2009-10 with an improvement in macro-economic conditions. But average room rates (ARRs), remained lower mainly due to a 10 per cent increase in supply.
This resulted in RevPARs for the period declining by 23 per cent y-o-y.

CRISIL COMPANY REPORT | 2

The Indian Hotels Company Ltd

ANNUAL RESULTS
Income Statement
(Rs million )
Net Sales
Operating Income

Mar-08
29,200.3
29,659.5

Mar-09
26,005.9
27,051.4

Mar-10
24,566.7
25,332.1

EBITDA
EBITDA Margin

9,464.9
31.9

5,737.7
21.2

3,948.8
15.6

Depreciation
Interest
Other Income

1,676.2
2,213.4
1,202.8

1,885.3
3,192.3
1,176.1

2,185.4
6,873.6
904.5

PBT
PAT

6,193.0
3,770.3

1,669.4
165.0

-4,179.6
-5,001.9

12.7

0.6

-19.7

602.9

723.4

723.5

6.3

0.2

-6.9

Mar-08
6,778.1
-2,403.4
1,676.2
-785.7

Mar-09
1,836.2
-1,388.2
1,885.3
-2,788.5

Mar-10
-4,205.7
-2,567.4
2,185.4
8,749.6

5,265.2
-5,475.1
-10,566.4

-455.2
-11,186.7
-9,977.6

4,161.9
-1,650.3
4,920.1

PAT Margin
No. of shares (Mn No.)
Earnings per share (EPS)
Cash flow
(Rs million )
Pre-tax profit
Total tax paid
Depreciation
Change in working capital

Balance sheet
(Rs million )
Equity share capital
Reserves and surplus
Tangible net worth
Deferred tax liablity:|asset|
Long-term debt
Short-term-debt
Total debt
Current liabilities
Total provisions
Total liabilities
Gross block
Net fixed assets
Investments
Current assets
Receivables
Inventories
Cash
Total assets

Mar-08
802.6
21,226.6
22,029.2
1,485.3
19,138.3
15,523.2
34,661.5
4,625.4
2,042.5
64,843.9
45,526.6
39,075.5
15,863.4
9,905.0
2,079.1
533.3
2,576.0
64,843.9

Mar-09
723.4
29,362.2
30,085.6
1,601.5
32,776.0
14,881.5
47,657.5
5,804.8
1,847.4
86,996.8
52,639.5
47,525.5
25,841.1
13,630.2
1,777.7
641.0
2,528.4
86,996.8

Mar-10
723.5
22,267.3
22,990.8
-143.6
45,028.2
768.6
45,796.8
6,026.4
7,291.3
81,961.7
57,087.3
47,535.4
20,921.0
13,505.3
2,055.0
561.6
5,487.6
81,961.7

Revenue growth (%)

EBITDA growth(%)
PAT growth(%)

Mar-08
16.8
25.6
-3.4

Mar-09
-8.8
-39.4
-95.6

Mar-10
-6.4
-31.2
n.m

EBITDA margins(%)
Tax rate (%)
PAT margins (%)

31.9
38.9
12.7

21.2
84.1
0.6

15.6
-17.7
-19.7

Dividend payout (%)

Dividend per share (Rs)
BV (Rs)
Return on Equity (%)
Return on capital employed (%)

30.4
1.9
36.5
18.0
16.8

526.1
1.2
22.9
0.6
7.1

-14.5
1.0
24.9
n.m
3.6

Gearing (x)
Interest coverage (x)
Debt/EBITDA (x)

1.6
4.3
3.7

1.6
1.8
8.3

2.0
0.6
11.6

Asset turnover (x)

Current ratio (x)

0.7
0.4

0.6
0.8

0.5
1.0

109

164

175

Ratio

Cash flow from operating activities

Capital Expenditure
Investments and others

Cash flow from investing activities

Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others (incl extraordinaries)

-16,041.5
-6.7
14,113.8
-1,340.1
-1,186.3

-21,164.3
8,359.6
12,996.0
-1,015.6
1,232.0

3,269.8
-3,756.2
-1,860.7
-884.5
2,028.9

Cash flow from financing activities

Change in cash position
Opening cash

11,580.7
804.4
1,771.5

21,572.0
-47.5
2,576.0

-4,472.5
2,959.2
2,528.4

2,576.0

2,528.4

5,487.6

Closing cash

Gross current assets (days)

n.m : Not meaningful;

QUARTERLY RESULTS
Profit and loss account
(Rs million)
No of Months

Dec-10

% of Rev

Dec-09

% of Rev

Sep-10

% of Rev

Dec-10

% of Rev

Dec-09

% of Rev

Revenue

4,910.6

100.0

4,415.2

100.0

3,470.9

100.0

11,728.6

100.0

10,652.0

100.0

EBITDA

1,500.0

30.5

1,548.5

35.1

552.3

15.9

2,646.0

22.6

2,720.2

25.5

Interes t

327.4

6.7

441.8

10.0

295.9

8.5

963.4

8.2

1,196.1

11.2

Depreci a ti on

297.8

6.1

259.9

5.9

252.0

7.3

804.2

6.9

762.5

7.2

PBT

822.8

16.8

838.7

19.0

(81.4)

(2.3)

783.5

6.7

1,268.7

11.9

PAT

502.9

10.2

648.8

14.7

(63.0)

(1.8)

473.2

4.0

931.9

8.7

CRISIL COMPANY REPORT | 3

The Indian Hotels Company Ltd

FOCUS CHARTS & TABLES

-150

Sales growth y-o-y (RHS)

Rs/share
2.5

Net Profit

Per cent
50

EPS

40

1.5

30

Sep-10

Dec-10

Jun-10

Mar-10

-200
Dec-09

Sep-10

Jun-10

Mar-10

Sep-09

Sales

Dec-09

Jun-09

Mar-09

Dec-08

Sep-08

Jun-08

Mar-08

-100

Sep-09

1,000

-50

Jun-09

2,000

Mar-09

3,000

50

Dec-08

4,000

Per cent
100

Quarterly PAT & y-o-y growth

Mar-08

5,000

Rs mn
1,600
1,400
1,200
1,000
800
600
400
200
0
-200
Jun-08

Per cent
20
15
10
5
0
-5
-10
-15
-20
-25
-30

Sep-08

Quarterly sales & y-o-y growth

Dec-10

Rs mn
6,000

Net profit growth y-o-y (RHS)

Movement in operating and net margins

20

10

0.5

0
0

Sep 2010
30.3
15.0
27.0
27.7

Dec 2010
33.6
14.2
25.9
26.3

OPM

Board of Directors
Director Name
Ra ta n Na va l Ta ta (Dr.)

Dec-10

Sep-10

Jun-10

Mar-10

Dec-09

Sep-09

Jun-09

Mar-09

Dec-08

Sep-08

Jun-08

Dec-10

Sep-10

Jun-10

Mar-10

Dec-09

Sep-09

Jun-09

Mar-09

Dec-08

Sep-08

Jun-08

Mar-08

Shareholding Pattern (Per cent)

Mar 2010
Jun 2010
Promoter
29.5
30.3
FII
13.9
14.2
DII
28.6
28.7
Others
28.0
26.9

Mar-08

-10
-0.5

NPM

Ra ymond N. Bi ckson (Mr.)

Designation
Non-Executi ve Cha irma n, PromoterDi rector
Ma na ging Di rector

Arna va z Rohinton Aga (Ms .)

Ja gdis h Ra dhey Moha n Ca poor (Mr.)

Non-Executi ve Director
Non-Executi ve Director

Keki Bomi Da di seth (Mr.)

Na di r Burjorji Godrej (Mr.)
Anil P. Goel (Mr.)
Ra yora th Kutta mba ll y Kri shna kuma r
(Mr.)

Non-Executi ve Director
Non-Executi ve Director
Di rector
Promoter-Di rector

Sha poor Pa ll onji Mis try (Mr.)

Abhiji t Mukerji (Mr.)
Deepa k Shantil a l Pa rekh (Mr.)

Non-Executi ve Director
Di rector
Non-Executi ve Director

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).
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CRISIL COMPANY REPORT | 4