15102022022359mahindra Holidays & Resorts India LTD

Mahindra Holidays &
Resorts India Ltd

Timeshare to long-term wealth creation
1|Page (15th Oct 2022) For any further query, please email us on research@ventura1.com
TABLE OF CONTENTS
Summary 03
Valuation and Peer Comparison 04

- Valuation 04
- Our Bull & Bear Case Scenario 05
- Band Charts & Price Performance 06
- Peer comparison & Scatter plot 08
Financial Summary & Story in Charts 11
Company Overview 16
Sector Tailwinds & Growth Drivers 28
Business Quality Score 39
Annual Report Takeaways 40
Key Management Personnel 43
Risk & Concerns 43
Quarterly Financials 44
Summary of Management Commentary on Quarterly Performance 45
Financial Statement Analysis & Projections 46
Disclaimer 47
Our recent initiating coverage reports
IRB Infra Developer Aditya Vision Shalby Black Box Cantabil Retail
Mahindra Holidays & Resorts India Ltd
BUY @ CMP INR 274 Target: INR 576 in 24 months Upside Potential: 110.2%
Timeshare to long-term wealth creation
The fortunes of the Indian hospitality industry could not have been better poised, Industry Hospitality
given the revenge travel trend post-pandemic and the supply-demand situation
getting favourable. For Mahindra Holidays & Resorts Ltd (MHRIL), it is the icing on Scrip Details
the cake, as it gets ‘Vacation Ownership (VO)’ (upfront money from new members Face Value (INR) 10.0
for 3-25 years) and ‘Annual Subscription Fees (ASF)’ (annual recurring income) from Market Cap (INR Cr) 5,499
its members. Cash flows from new members enable MHRIL to fund its growth capex Price (INR) 274
for newer resort additions, while ASF enables it to meet the regular opex at resorts. No of Sh O/S (Cr) 20.0
With the revival in occupancy due to improving industry trends, MHRIL’s resort 3M Avg Vol (000) 9.7
income is also expected to pick up. 52W H/L (INR) 314/186
Dividend Yield (%) 0.00
During FY19-22, MHRIL increased its member base to 2,65,980 (CAGR of 3.0%) and
expanded its room inventory to 4,568 rooms (CAGR of 8.3%). VO and ASF income Shareholding (%) Jun 2022
grew at a CAGR of 7.6% to INR 393 cr and 5.6% to INR 308 cr, respectively, while Promoter 67.2
resort income declined at a CAGR of 4.3% to INR 193 cr due to a decline in occupancy Institution 14.6
from 83% in FY19 to 74% in FY22 due to pandemic led restrictions in FY21 and FY22. Public 18.2
Overall, revenue/ EBITDA/ PBT/ PAT grew at a CAGR of 1.5%/ 28.1%/ 25.6%/ 31.8% TOTAL 100.0
to INR 961 cr/ INR 235 cr/ 199 cr/ INR 146 cr, respectively, while EBITDA, PBT and
PAT margins improved by 1227bps to 24.4%, 975bps to 20.7% and 827bps to 15.2%, Price Chart
respectively. Digital & referral channels helped in improving the quality of leads and
member additions during Covid-related lockdown restrictions. MHRIL Sensex
350 70,000
Over the period of FY22-25E, MHRIL is targeting an inventory of +5,500 rooms by
300 60,000
FY25, and at the member-to-room ratio of 59X, we are expecting an active member
250 50,000
count of 3,24,500 by FY25. VO and ASF are to grow at a CAGR of 11.0% to INR 538 200 40,000
cr and 8.2% to INR 390 cr, respectively. Occupancy could improve to 85% in FY25 150 30,000
and as a result, resort income is expected to recover at a CAGR of 28.1% to INR 405 100 20,000
cr. We are expecting revenue/EBITDA/PBT/PAT to grow at a CAGR of 13.8%/ 14.7%/ 50 10,000
2.4%/ 2.9% to INR 1,414 cr/ 354 cr/ 213 cr/ 159 cr, respectively. EBITDA margins are 0 0
Sep-19 Sep-20 Sep-21 Sep-22
expected to improve by 59bps to 25.0%, while PBT and PAT margins are estimated
to decline by 560bps to 15.1% and 396bps to 11.3%, respectively, due to additional
lease expenses on inventory expansion, higher member growth leading to
increasing cost of member acquisitions and post-Covid recovery in variable cost.
Key Standalone Financial Data (INR Cr, unless specified)

Net EBITDA PAT EPS BVPS RoE RoIC P/E P/BV EV/EBITDA
EBITDA PAT
Revenue (%) (%) (₹) (₹) (%) (%) (X) (X) (X)
FY21 822.3 199.7 117.4 24.3 14.3 5.9 16.7 35.1 98.7 46.6 16.4 26.2
FY22 960.7 234.5 146.3 24.4 15.2 7.3 28.2 25.9 62.3 37.4 9.7 21.7
FY23E 1,161.2 282.7 137.5 24.3 11.8 6.9 32.4 21.2 51.3 39.8 8.5 18.1
FY24E 1,276.3 317.2 140.7 24.9 11.0 7.0 36.6 19.2 61.8 38.9 7.5 15.8
FY25E 1,414.1 353.5 159.4 25.0 11.3 8.0 41.4 19.3 93.3 34.4 6.6 13.7
Valuation
Timeshare is a long-term cash flow generating business and thus we have used the DCF-
based valuation method. We have discounted back the future cash flows of MHRIL to FY25
and arrived at a standalone price target of INR 528 per share. We have given a 1.0X P/S
multiple for MHRIL’s European subsidiary HCRO which is contributing INR 48 per share to the
consolidated price target of INR 576 per share, representing an upside potential of 110.2%
from the CMP of INR 274 per share.
SOTP valuation for MHRIL

FY25 Equity FY25 Value per
Company name Valuation Method
Value (INR Cr) share (INR)
MHRIL - Standalone DCF 10,560 528
Holiday Club Resort Oy 1.0X P/S 952 48
Consolildated equity value for MHRIL 11,512 576
Source: Ventura Research
MHRIL: Consensus vs Ventura estimates

FY22-25E
Consensus vs Ventura Estimates FY22 FY23E FY24E FY25E
CAGR (%)
Revenue (INR cr)
Consensus 960.7 1,158.8 1,264.6 1,376.2 12.7
YoY Growth (%) 20.6 9.1 8.8
Ventura Estimates 960.7 1,161.2 1,276.3 1,414.1 13.8
YoY Growth (%) 20.9 9.9 10.8
EBITDA (INR cr) & EBITDA margin (%)
Consensus 234.5 249.6 307.1 369.0 16.3
Consensus Margin (%) 24.4 21.5 24.3 26.8
Ventura Estimates 234.5 282.7 317.2 353.5 14.7
Ventura Margin (%) 24.4 24.3 24.9 25.0
Net Profit (INR cr) & Net margin (%)
Consensus 146.3 125.6 161.6 201.1 11.2
Consensus Margin (%) 15.2 10.8 12.8 14.6
Ventura Margin (%) 15.2 11.8 11.0 11.3
EPS (INR)
Consensus 7.3 6.3 8.1 10.1 11.2
Valuation
P/E Ratio (X)
Consensus 37.4 43.6 33.9 27.2
Ventura Estimates 37.4 39.8 38.9 34.4
Source: Company Reports & Ventura Research
Our Bull and Bear Case Scenarios
MHRIL’s business generates a long-term secular FCF, which is based on room inventory and
member additions. Hence, we have prepared likely Bull and Bear case scenarios for FY25 price
targets, based on the room inventory, member additions and terminal value growth of FCF.
• Bull Case: We have assumed 5% terminal value growth, the annual addition of 350
rooms to 5,618 rooms by FY25 and a member-to-room ratio of 60X which will result in
a total active member count of 3,37,080 in FY25. Based on these assumptions our Bull
Case consolidated price target is coming at INR 722 (an upside of 163.5% from CMP).
• Bear Case: We have assumed 3% terminal value growth, the annual addition of 250
rooms to 5,318 rooms by FY25 and a member-to-room ratio of 58X which will result in
a total active member count of 3,08,444 in FY25. Based on these assumptions our Bear
Case consolidated price target is coming at INR 318 (an upside of 16.0% from CMP).
Bull & Bear Case Scenario
5% terminal value growth, annual addition of 350
rooms to 5,618 rooms by FY25 and member-to-
Bull Case Price
room ratio of 60X which will result in total active INR 722/share
member count of 3,37,080 in FY25

Target Price
room ratio of 58.6X which will result in total active INR 576/share

Bear Case Price
room ratio of 58X which will result in total active INR 318/share
Current Price
INR 274/share
Source: BSE & Ventura Research
Risk to our price target

Risks to upside
• Significant expansion in room inventory and member addition could surpass our
expectations. We have taken a room inventory of 5,500 in FY25, while the
management has guided more than 5,500.
• The hotel business is a fixed cost model and with higher occupancy (which is currently
more than the pre-COVID levels), MHRIL could improve the EBITDA margins, while we
have taken stable profitability in our forecast.
Risks to downside
• Subdued growth in active members due to slower-than-expected recovery in the
economy and tourism sector due to an uncertain macro environment. It could reduce
asset utilization and higher fixed cost could impact the profitability and cash flow.
Strong revenue growth outlook and healthy balance sheet deserve a premium valuation
1 year forward P/E P/E standard deviation

Adj Price 14.7x 23.4x P/E Average Upper SD1
32.1x 40.8x 49.5x Upper SD2 Lower SD1 Lower SD2
400 55
350 50
300 45
250 40
200 35
150 30
100 25
50 20
0 15
Jan-18
Jan-18
Jun-17
Nov-16
Aug-18
Mar-19
Oct-19
May-20
Nov-16
Aug-18
Mar-19
Oct-19
May-20
Apr-16
Jun-17
Dec-20
Feb-22
Sep-22
Apr-16
Dec-20
Feb-22
Sep-22
Jul-21
Jul-21
Price performance (%): MHRIL vs Lemont Tree vs IHCL vs EIH
MHRIL Lemon Tree IHCL EIH
150
100
50
0
Oct-21
Oct-19
Jan-20
Oct-20
Dec-20
Jan-21
Jan-22
Aug-22
Nov-19
Feb-20
Mar-20
May-20
Aug-20
Nov-20
Mar-21
May-21
Aug-21
Nov-21
Mar-22
May-22
Dec-19
Apr-20
Jun-20
Sep-20
Feb-21
Apr-21
Jun-21
Sep-21
Dec-21
Jun-22
Feb-22
Apr-22
Sep-22
Jul-20
Jul-21
Jul-22
-50
-100
MHRIL SWOT Analysis in a nutshell
Mahindra Holidays &

Resorts Ltd
Growth Drivers Key Challenges New Trends Investment Themes
MHRIL takes membership

Higher real estate rates, which
MHRIL has a Zero debt balance money upfront and charges
has recently increased after a Changing hotel stay trends due
sheet and it funds its capex annucal susbcription fees to
lull period of the past 5 years, to rising population of
from customers’ advance keep the service active. it
which has increased property milleniels and generation Z.
subscription money. maintains consistency in cash
rates.
flow
Hotel is a fixed cost model and

Nuclear families and young
therefore occupany ramp up at Brand awareness and ability to
population has higher Strong brand equity in the
new properties is important to pay higher for leisure stay has
disposable income to spend on leisure travel segment.
recover cost to get the benefits significantly improved.
luxury and leisure products
of operating leverage.
MHRIL's India business is

Improving pan India rail/ road/ Significant improvement in
performing well, however, its
air connectivity is expected to internet usage on mobile has Healty balance sheet and low
wholly owned subsidiary
enhance tourism in new increased the air-travel working capital requirements.
Holiday Club Resorts (Europe) is
geographies propensity and holiday booking
making losses since pandemic
7|Page (15th Oct 2022) For any further query, please email usFor
onany further query, please email us on reasech@ventura1.com
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Valuation and comparable metrics of domestic and global companies
P/E Ratio P/BV EV/EBIDTA RoE (%) RoIC (%) Sales EBITDA Margin (%) Net Margin (%)
Mkt EV/EBITDA to
Company Name Price 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025
Cap EBITDA CAGR
Domestic Peers (fig in INR cr, unless specified)

Mahindra Holidays & Resorts Ltd 5,499 274.0 0.9 39.8 38.9 34.4 8.5 7.5 6.6 18.1 15.8 13.7 21.2 19.2 19.3 51.3 61.8 93.3 1,161 1,276 1,414 24.3 24.9 25.0 11.8 11.0 11.3
Indian Hotel Co Ltd 44,054 310.2 0.3 579.7 468.2 389.9 6.2 6.1 6.0 31.7 26.7 22.3 1.1 1.3 1.5 9.8 12.2 15.2 5,158 5,554 5,757 29.9 32.6 37.2 1.5 1.7 2.0
EIH Ltd 11,369 181.8 0.1 45.8 39.6 36.0 3.4 3.1 2.9 27.2 22.5 20.3 7.4 7.9 8.0 8.4 10.3 11.0 1,591 1,812 1,993 26.5 27.9 27.9 15.6 15.8 15.8
Lemon Tree Hotels Ltd 6,595 83.3 0.2 9.0 5.0 4.4 4.2 2.3 1.5 22.4 17.6 14.6 46.8 45.9 34.1 7.4 7.3 7.1 810 984 1,216 47.2 48.9 47.3 90.2 134.7 122.7
Chalet Hotels Ltd 7,937 387.1 0.1 79.4 36.5 23.6 4.9 4.3 3.7 24.5 16.6 13.2 6.2 11.9 15.6 7.9 12.7 15.8 1,077 1,400 1,618 38.2 42.4 45.1 9.3 15.5 20.8
Global Peers (fig in US$ mn, unless specified)
Wyndham Hotels (US) 5,710 63.2 1.6 17.1 17.5 16.7 4.5 4.0 3.6 12.0 11.4 10.9 26.6 23.0 21.5 17.5 17.3 16.9 1,449 1,442 1,490 43.1 44.8 45.3 23.1 22.7 23.0
Travel+Leisure Co (US) 3,075 36.7 0.5 8.0 6.7 6.1 -7.5 65.4 5.6 7.0 6.1 5.6 -93.7 972.3 91.5 27.0 27.5 25.8 3,598 3,924 4,258 24.3 24.7 24.3 10.7 11.6 11.8
Marriott Vacation Worldwide (US) 4,939 125.7 0.5 11.0 9.4 8.9 1.5 1.4 1.3 8.1 7.4 6.9 14.0 15.2 14.7 13.5 13.8 14.9 4,629 4,935 5,136 19.5 20.6 21.0 9.7 10.7 10.8
Hilton Grand Vacation Inc (US) 4,139 35.2 0.2 12.8 9.5 7.8 1.9 1.7 1.6 6.4 5.5 4.7 15.0 18.5 20.2 14.4 18.3 20.9 3,652 3,925 4,233 26.9 27.6 27.6 8.8 11.1 12.5
MGM China Holdings (China) 2,111 0.6 0.1 -3.9 -62.1 11.2 -5.5 -5.1 -9.3 18.2 13.0 7.5 140.1 8.2 -83.1 -12.3 3.6 13.8 930 1,906 2,464 32.3 21.4 26.6 -57.6 -1.8 7.7
Fosun Tourism Group (China) 1,130 0.9 0.1 -43.0 12.3 8.0 2.5 2.1 1.7 10.7 6.4 4.6 -5.9 17.1 20.9 4.2 9.7 14.6 2,027 2,655 3,096 17.3 21.8 21.7 -1.3 3.5 4.6
Source: Ventura Research & Bloomberg
8|Page (15th Oct 2022) For any further query, please email us
Foronany
research@ventura1.com
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Strong cash flow generation and consistency in the business ensure higher RoIC
100
MHRIL Stable FCF generation, healthy
90 balance sheet and market
80 leading RoIC deserves premium
valuation
70
FY25 RoIC (%)
60
50
40
30
Chalet Travel+Leisure
Fosun
20 HGV
IHCL MCW Wydhem
10 EIH
MGM Lemon Tree
0
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8
EV/EBITDA to 3 year EBITDA CAGR (X)
15
13 Though the margins are comparatively

lower than other hotel players, it has Lemon Tree
FY20-25 Revenue CAGR (%)
been stable during the turbulent time of

11 FY21 and FY22
Chalet
MHRIL
7
5 IHCL
EIH
3
23 25 27 29 31 33 35 37 39 41 43 45 47 49
FY25 EBITDA Margin (%)
Source: Ventura Research, ACE Equity & Bloomberg
MHRIL’s operating metrics compared with global timeshare peers (fig in US$ mn, unless specified)
Company Parameters CY17 CY18 CY19 CY20 CY21
Members (nos) 2,35,792 2,47,716 2,54,988 2,63,952 2,62,000
Revenue 165 144 139 112 128
Revenue per member (US$) 699 580 546 425 489
EBITDA 35 22 23 27 31
MHRIL EBITDA per member (US$) 149 88 89 103 117
EBITDA Margin (%) 21.3 15.1 16.3 24.3 23.9
Net Profit 20 13 11 -9 18
Net Profit per member (US$) 83 52 42 -35 69
Net Margin (%) 11.9 9.0 7.7 -8.2 14.1
Members (nos) 8,78,000 8,80,000 8,78,000 8,67,000 8,33,000
Revenue 3,806 3,931 4,043 2,160 3,134
Revenue per member (US$) 4,335 4,467 4,605 2,491 3,762
EBITDA 882 942 991 259 778
Travel + Leisure Ltd EBITDA per member (US$) 1,005 1,070 1,129 299 934
EBITDA Margin (%) 23.2 24.0 24.5 12.0 24.8
Net Profit 855 672 507 -255 308
Net Margin (%) 22.5 17.1 12.5 -11.8 9.8
Members (nos) 4,00,000 6,60,000 6,60,000 6,50,000 7,00,000
Revenue 2,183 2,968 4,259 2,886 3,890
EBITDA 294 419 758 235 657
Marriot Vacation Worldwide EBITDA per member (US$) 735 635 1,148 362 939
EBITDA Margin (%) 13.5 14.1 17.8 8.1 16.9
Net Profit 235 55 138 -275 49
Net Margin (%) 10.8 1.9 3.2 -9.5 1.3
Members (nos) 2,88,000 3,09,000 3,26,000 3,28,000 4,99,000
Revenue 1,711 1,999 1,838 894 2,335
EBITDA 395 503 408 57 716
Hilton Grand Vacations EBITDA per member (US$) 1,372 1,628 1,252 174 1,435
EBITDA Margin (%) 23.1 25.2 22.2 6.4 30.7
Net Profit 327 298 216 -201 176
Net Profit per member (US$) 1,135 964 663 -613 353
Net Margin (%) 19.1 14.9 11.8 -22.5 7.5
We have adjusted MHRIL data from FY to CY and INR to USD
10 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

Financial analysis and projections
FY19-22: Maintained consistency in performance during the pandemic
During FY19-22, MHRIL’s revenue grew at a CAGR of 1.5% to INR 961 cr which was primarily
driven by a 7.6% CAGR in vacation ownership revenue to INR 393 cr and a 5.6% CAGR in annual
subscription fees to INR 308 cr in FY22 due to
• An increase in total active members from 2,43,574 in FY19 to 2,65,980 in FY22, a net
addition of 22,406 during FY19-22, and
• Expansion in room inventory from 3,595 rooms in FY19 to 4,568 rooms in FY22.
Member-to-room ratio declined from 67.8X in FY19 to 58.2X in FY22 and the company
is targeting to keep it in the range of 58-62X to avoid the member traffic on the room
inventory.
However, resort income declined at a CAGR of 4.3% to INR 193 cr in FY22 due to a decline in
occupancy rate from 83% in FY19 to 74% in FY22 on account of the two pandemic waves in
FY21 and FY22. Interest income also declined at a CAGR of 18.1% to INR 67 cr during FY19-22
due to a decline in members-on-EMI from 66,297 in FY19 (27.2% of the total members) to
40,142 in FY22 (15.1% of the total members). The company is targeting to keep the EMI
member count low.
EBITDA and PAT grew at a CAGR of 28.1% and 31.8% to INR 235 cr and INR 146 cr, respectively.
EBITDA and PAT margins improved by 1227bps to 24.4% and 827bps to 15.2% respectively. As
a result, return ratios – RoE and RoIC – improved by 440bps to 25.9% and 2723bps to 36.4%
respectively.
MHRIL unit cost analysis for FY19 and FY22
Data in INR Data in INR

per room per room
(27.1%) (25.9%) (24.4%)
(14.7%) (13.7%)
(3.7%) (12.1%) (5.0%) (3.2%)
(3.6%) (4.1%) (3.2%) (3.5%)
(3.9%) (6.1%)
(14.9%)
(15.8%) (15.0%)
Source: Company Reports

C&D and F&B stand for ‘Commission & Discounts’ and ‘Food & Beverages

Q1FY23: Post pandemic strong recovery
Revenue from operations was at INR 288 cr in Q1FY23 as against INR 197 cr in Q1FY22 (YoY
increase of 46.3%) mainly on account of
• The lower base of Q1FY22 was due to the 2nd wave of the pandemic and an increase in
room inventory from 4,198 in Q1FY22 to 4,617 in Q1FY23.
• An increase in total active members from 2,55,000 in Q1FY22 to 2,69,445 in Q1FY23,
which also increased the vacation ownership income and annual subscription fees at a
YoY rate of 19.5% and 4.6% to INR 108 cr and INR 79 cr, respectively over the same
period.
• Rise in occupancy rate from 51% in Q1FY22 to 89% in Q1FY23, which also increased
the resort income at a YoY rate of 457.8% to INR 84 cr.
• Interest income increased at a YoY rate of 6.6% to INR 17 cr in Q1FY22 due to the
marginal rise in EMI members
EBITDA and PAT grew at a YoY rate of 28.2% and 11.2% to INR 68 cr and INR 34 cr, respectively
in Q1FY23, however, EBITDA and PAT margins declined by 333bps to 23.6% and 369bps to
11.7%, respectively due to the complete lifting of lockdowns and resumption of hotel services,
which resulted in additional costs for the company.
FY22-25E: Expansion in room inventory and member additions to drive financial

performance in the coming years
Over the period of FY22-25E, we are expecting revenues to grow at a CAGR of 13.8% to INR
1,414 cr which is expected to be driven by
• 11.0% CAGR growth in vacation ownership income to INR 538 cr and 8.2% CAGR
growth in annual subscription fees to INR 390 cr due to an increase in both room
inventory and active member count to 5,500 and 3,24,500 respectively by FY25. We
are expecting an 85% occupancy rate and a member-to-room ratio of 59X in FY25.
• 28.1% CAGR growth in resort income to INR 405 cr due to the low base of FY22 on
account of the 2nd wave of the pandemic.
• 6.7% CAGR growth in interest income to INR 81 cr and expecting the EMI members
penetration of 15% in the total members.
EBITDA and PAT are expected to grow at a CAGR of 14.7% and 2.9% to INR 354 cr and INR 159
cr, respectively, while EBITDA margin is expected to improve by 59bps to 25.0% and PAT
margin is estimated to decline by 396bps to 11.3% on account of additional lease expenses due
to acceleration in inventory expansion and higher member growth leading to increasing cost
of member acquisitions. MHRIL is targeting to expand its room inventory to 5,500 rooms by
FY25. Return ratios – RoE and RoIC – are expected to stand at 19.3% (-664bps) and 93.3%
(+3098bps) respectively by FY25.

FY25 unit cost analysis
Data in INR
per room
(25.2%)
(25.0%)
(14.7%)
(5.0%)
(4.6%) (3.9%)
(3.4%)
(6.0%)
(14.8%)

C&D and F&B stand for ‘Commission & Discounts’ and ‘Food & Beverages

MHRIL’s financial summary
Fig in INR Cr (unless specified) FY19 FY20 FY21 FY22 FY23E FY24E FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY33E FY34E FY35E
Vaccation Ownership Income 315.5 346.7 345.1 393.4 443.0 486.2 537.7 596.3 662.9 738.2 823.0 918.1 1,024.3 1,142.4 1,273.5 1,418.5 1,578.5
YoY Growth (%) -42.1 9.9 -0.5 14.0 12.6 9.8 10.6 10.9 11.2 11.4 11.5 11.6 11.6 11.5 11.5 11.4 11.3
Share in revenue (%) 34.4 35.5 42.0 40.9 38.1 38.1 38.0 38.0 37.9 37.8 37.7 37.7 37.6 37.5 37.4 37.4 37.3
Annual Subscription Fees 261.4 291.3 293.0 307.9 321.3 352.6 390.0 432.5 480.8 535.5 597.0 665.9 742.9 828.6 923.7 1,028.9 1,145.0
YoY Growth (%) 20.5 11.4 0.6 5.1 4.4 9.8 10.6 10.9 11.2 11.4 11.5 11.6 11.6 11.5 11.5 11.4 11.3
Share in revenue (%) 28.5 29.8 35.6 32.0 27.7 27.6 27.6 27.5 27.5 27.4 27.4 27.3 27.3 27.2 27.2 27.1 27.0
Resort Income 219.7 228.3 104.4 192.6 326.5 361.9 405.1 454.7 511.5 576.3 649.9 733.1 827.0 932.6 1,051.1 1,183.6 1,331.6
YoY Growth (%) 5.1 3.9 -54.3 84.5 69.5 10.9 11.9 12.3 12.5 12.7 12.8 12.8 12.8 12.8 12.7 12.6 12.5
Share in revenue (%) 23.9 23.4 12.7 20.0 28.1 28.4 28.6 28.9 29.2 29.5 29.8 30.1 30.4 30.6 30.9 31.2 31.5
Interest Income 121.7 110.7 79.8 66.9 70.5 75.6 81.3 87.6 94.7 102.4 110.9 120.2 130.1 140.9 152.4 164.8 178.0
YoY Growth (%) 30.6 -9.0 -28.0 -16.2 5.4 7.3 7.5 7.8 8.0 8.2 8.3 8.3 8.3 8.3 8.2 8.1 8.0
Share in revenue (%) 13.3 11.3 9.7 7.0 6.1 5.9 5.7 5.6 5.4 5.2 5.1 4.9 4.8 4.6 4.5 4.3 4.2
Revenue from operations 918.3 977.0 822.3 960.7 1,161.2 1,276.3 1,414.1 1,571.1 1,749.9 1,952.5 2,180.9 2,437.4 2,724.4 3,044.6 3,400.8 3,795.8 4,233.0
YoY Growth (%) -13.7 6.4 -15.8 16.8 20.9 9.9 10.8 11.1 11.4 11.6 11.7 11.8 11.8 11.8 11.7 11.6 11.5
Employee Cost 248.5 272.7 243.0 248.6 284.5 314.0 345.2 380.1 418.5 460.5 505.8 554.3 605.7 659.5 715.4 772.8 831.1
Employee Cost to Sales (%) 27.1 27.9 29.6 25.9 24.5 24.6 24.4 24.2 23.9 23.6 23.2 22.7 22.2 21.7 21.0 20.4 19.6
Other Expenses 558.3 522.8 379.6 477.5 594.0 645.2 715.3 798.6 893.7 1,001.9 1,124.2 1,262.3 1,417.4 1,591.2 1,785.5 2,002.2 2,243.2
Other Expenses to Sales (%) 60.8 53.5 46.2 49.7 51.2 50.5 50.6 50.8 51.1 51.3 51.6 51.8 52.0 52.3 52.5 52.7 53.0
EBITDA 111.5 181.5 199.7 234.5 282.7 317.2 353.5 392.4 437.6 490.1 550.8 620.8 701.3 793.8 899.8 1,020.8 1,158.7
EBITDA Margin (%) 12.1 18.6 24.3 24.4 24.3 24.9 25.0 25.0 25.0 25.1 25.3 25.5 25.7 26.1 26.5 26.9 27.4
Net Profit 63.9 -108.2 117.4 146.3 137.5 140.7 159.4 180.7 205.4 234.1 267.5 306.6 352.3 405.7 468.1 540.9 625.5
Net Margin (%) 7.0 -11.1 14.3 15.2 11.8 11.0 11.3 11.5 11.7 12.0 12.3 12.6 12.9 13.3 13.8 14.2 14.8
Adjusted EPS 3.2 -5.4 5.9 7.3 6.9 7.0 8.0 9.0 10.3 11.7 13.4 15.3 17.6 20.3 23.4 27.1 31.3
P/E (X) 85.7 -50.6 46.6 37.4 39.8 38.9 34.4 30.3 26.7 23.4 20.5 17.9 15.5 13.5 11.7 10.1 8.8
Adjusted BVPS 14.9 8.8 16.7 28.2 32.4 36.6 41.4 46.8 53.0 60.0 68.0 77.2 87.8 100.0 114.0 130.3 149.1
P/BV (X) 18.4 31.1 16.4 9.7 8.5 7.5 6.6 5.9 5.2 4.6 4.0 3.5 3.1 2.7 2.4 2.1 1.8
Enterprise Value 5,136.8 5,063.8 5,238.3 5,095.4 5,119.6 5,013.3 4,846.0 4,663.4 4,463.7 4,243.4 3,998.9 3,725.8 3,419.4 3,074.1 2,683.9 2,242.1 1,740.8
EV/EBITDA (X) 46.1 27.9 26.2 21.7 18.1 15.8 13.7 11.9 10.2 8.7 7.3 6.0 4.9 3.9 3.0 2.2 1.5
Net Worth 296.8 176.2 334.7 564.4 646.9 731.3 826.9 935.3 1,058.6 1,199.0 1,359.6 1,543.5 1,754.9 1,998.3 2,279.1 2,603.7 2,979.0
ROE (%) 21.5 -61.4 35.1 25.9 21.2 19.2 19.3 19.3 19.4 19.5 19.7 19.9 20.1 20.3 20.5 20.8 21.0
Capital Employed 296.8 363.4 499.4 846.0 967.1 1,106.2 1,259.1 1,435.2 1,637.1 1,867.8 2,130.7 2,429.8 2,770.0 3,156.5 3,595.8 4,094.9 4,661.9
ROCE (%) 12.9 -19.2 14.0 10.0 11.5 11.2 10.9 10.5 10.2 9.9 9.7 9.6 9.6 9.6 9.7 9.8 10.0
Invested Capital 537.8 -235.8 97.2 184.0 290.7 268.7 197.1 122.9 46.4 -33.3 -117.4 -206.5 -301.6 -403.5 -512.8 -630.1 -756.1
ROIC (%) 11.2 -33.8 98.7 62.3 51.3 61.8 93.3 163.8 478.8 -741.6 -236.3 -151.6 -118.0 -100.8 -91.0 -85.3 -82.1
ROIIC (%) -53.2 -2.6 4.8 21.6 32.4 -77.0 -24.8 -23.6 -27.3 -31.4 -35.7 -40.2 -44.9 -49.9 -55.0 -60.4 -65.9
Cash Flow from Operations 300.5 331.0 266.8 356.0 235.1 555.6 637.7 712.7 791.4 875.5 965.8 1,063.1 1,168.3 1,282.4 1,406.8 1,542.5 1,691.1
Cash Flow from Investing -235.7 -277.5 -225.9 -261.4 -138.5 -348.5 -362.6 -403.9 -444.9 -485.3 -525.1 -564.1 -602.3 -639.6 -675.9 -711.0 -744.9
Cash Flow from Financing -62.5 -65.1 -35.9 -57.7 -85.1 -91.1 -103.6 -118.1 -134.8 -154.1 -176.4 -202.0 -231.4 -265.2 -304.0 -348.3 -398.8
Net Cash Flow 2.4 -11.6 5.0 36.9 11.4 116.0 171.4 190.8 211.7 236.1 264.3 297.0 334.5 377.6 426.9 483.2 547.4
Free Cash Flow 153.5 221.1 363.5 229.1 -26.9 225.6 297.7 332.7 371.4 415.5 465.8 523.1 588.3 662.4 746.8 842.5 951.1
CFO to EBITDA (%) 269.6 182.4 133.6 151.8 83.1 175.2 180.4 181.6 180.8 178.6 175.4 171.2 166.6 161.6 156.3 151.1 145.9
FCF to EBITDA (%) 137.7 121.8 182.1 97.7 -9.5 71.1 84.2 84.8 84.9 84.8 84.6 84.3 83.9 83.4 83.0 82.5 82.1
FCF to Net Profit (%) 240.4 -204.3 309.5 156.6 -19.6 160.4 186.8 184.1 180.8 177.5 174.1 170.6 167.0 163.3 159.5 155.8 152.0
FCF to Net Worth (%) 51.7 125.5 108.6 40.6 -4.2 30.8 36.0 35.6 35.1 34.7 34.3 33.9 33.5 33.2 32.8 32.4 31.9
Total Debt 0.0 187.3 164.7 281.6 320.3 375.0 432.2 499.9 578.5 668.7 771.1 886.3 1,015.1 1,158.3 1,316.7 1,491.2 1,682.9
Net Debt -339.1 -412.0 -237.5 -380.4 -356.2 -462.5 -629.8 -812.4 -1,012.2 -1,232.4 -1,476.9 -1,750.0 -2,056.5 -2,401.7 -2,791.9 -3,233.8 -3,735.0
Net Debt to Equity (X) -1.1 -2.3 -0.7 -0.7 -0.6 -0.6 -0.8 -0.9 -1.0 -1.0 -1.1 -1.1 -1.2 -1.2 -1.2 -1.2 -1.3
Net Debt to EBITDA (X) -3.0 -2.3 -1.2 -1.6 -1.3 -1.5 -1.8 -2.1 -2.3 -2.5 -2.7 -2.8 -2.9 -3.0 -3.1 -3.2 -3.2
Interest Coverage Ratio (X) 11.9 5.0 4.5 4.4 5.0 4.8 4.6 4.4 4.2 4.1 4.0 3.9 3.9 3.9 4.0 4.1 4.2
Piotroski F-score 4.0 4.0 6.0 6.0 6.0 7.0 8.0 7.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0
Altman Z-score 6.9 6.7 5.4 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.4 5.4 5.4 5.4 5.4
Beneish M-score 393.0 415.0 372.0 318.6 322.9 324.4 324.7 324.4 324.2 324.1 324.0 323.9 323.9 323.9 323.8 323.8 323.8

MHRIL Story in Charts
Post pandemic revenue recovery and room Diversified revenue sources is expected to
expansion is expected to be faster maintain a stable growth
Vaccation Ownership Annual Subscription Vaccation Ownership Annual Subscription
INR Cr % %
Resort Income Interest Income Resort Income Interest Income
1,500 YoY Growth (%) 30 100

13 11 10 7 6 6 6
1,200 20 80 13 20 28 28 29
24 23
900 10 60 36 32
28 30 28 28 28
600 0 40
300 (10) 20 34 35 42 41 38 38 38
0 (20) 0
FY19 FY20 FY21 FY22 FY23E FY24E FY25E FY19 FY20 FY21 FY22 FY23E FY24E FY25E
Stable revenue performance to drive profits in Profit per room to follow the overall
the coming years profitability
EBITDA Net Profit INR lacs EBITDA/room (INR lacs)
INR Cr EBITDA Margin (%) Net Margin (%) %
10 Net Profit/room (INR lacs)
8.1
400 30 8 7.0
25 5.9 6.0 6.2
300 6 4.9 4.8 5.1
20
200 15 4 3.1
10 4.1 3.9
100 2 3.2 3.1
5 2.8 2.9 2.8
0 0 0 1.8
FY19 FY20 FY21 FY22 FY23E FY24E FY25E (5) FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY25E
(100) -2
(10)
(200) (15) -4 -2.9
Improvement in profits to sustain operating Return ratios to follow operating performance

cash flow and FCF of the company
CFO FCF Net Worth Invested Capital
INR Cr CFO to EBITDA (%) FCF to Net Profit (%) % INR Cr RoE (%) RoIC (%) %
800 400 1,000 80

700 300 60
800
600 200 40
500 600
100 20
400
0 400 0
300
(100) (20)
200 200
100 (200) (40)
0
0 (300) (60)
FY19 FY20 FY21 FY22 FY23E FY24E FY25E
FY19 FY20 FY21 FY22 FY23E FY24E FY25E (200) (80)

Understanding MHRIL’s business and growth opportunities
MHRIL is an Indian hotel company founded in 1996. It is a part of the Mahindra Group and
provides holidays on a timeshare basis. On a broader level, MHRIL generates its income from
three revenue streams –
• Vacation ownership (VO) is its key offering and ‘Club Mahindra’ is its flagship brand.
The company’s business is to sell vacation ownership and provide holiday facilities to
members for a specified period ranging from 3 to 25 years, for which the membership
fee is collected either in full upfront or on EMIs (which generates interest income). The
company recognizes the upfront membership fees on a straight-line basis over the
tenure of the membership. The company has a Deferred Revenue pool of INR 5,083 cr
as on 31st Mar 2022, providing visibility on future revenues and improved profitability
with minimal incremental costs.
• Annual subscription fees (ASF) are the annual charges collected from members and
recognized as income on an accrual basis. Both VO and ASF are non-variable assured
long-term income for the company. Cash flows from new members enable MHRIL to
fund its growth capex for newer resort additions, while ASF enables it to meet the
regular opex at resorts.
• Resort income is the only variable revenue stream of the company as it depends on
the room occupancy and willingness of members to spend on F&B and other hotel
activities during their stay. The more a member holidays, the more he spends time
within resorts and the higher will be the resort income.
MHRIL business structure

Vaccation Ownership
(Lump-sum fees of INR 1.3-22.7 lacs for
the membership of 3-25 years)
FY22 revenue share: 41%
FY19-22 revenue CAGR: 7.6%
FY22-25E revenue CAGR: 11.0%
Annual Subscription Fees

(Annual subscription fees of INR 16K-
17K to keep the service active)
Membership Income
FY22 revenue share: 32%
FY19-22 revenue CAGR: 5.6%
Mahindra Holiday & Resorts India Ltd
Resort Income Interest Income

FY22 revenue share: 20% (Interest income from members opting
FY19-22 revenue CAGR: -4.3% for payment under EMI)
FY22-25E revenue CAGR: 28.1% FY22 revenue share: 7%
FY19-22 revenue CAGR: -18.1%

Club Mahindra resort network
Resorts Name State Category Property Rooms
Symphony Andaman & Nicobar Island Domestic Resort 12
Sarovar Dindi Andhra Pradesh Domestic Resort 15
Devka Beach, Daman Daman Domestic Resort 37
Azzaro Resorts and Spa Diu Domestic Resort 15
Goa (Varca) Goa Domestic Resort 209
Emerald Palms Goa Domestic Resort 106
Goa (Acacia Palms) Goa Domestic Resort 60
Assonora, Goa Goa Domestic Resort 200
Gir Gujarat Domestic Resort 43
Dwaraka Gujarat Domestic Resort 44
Nadiad Gujarat Domestic Resort 20
Kensville Gujarat Domestic Resort 72
Netrang Gujarat Domestic Resort 60
Manali (White Medows) Himachal Pradesh Domestic Resort 60
Kandhaghat Himachal Pradesh Domestic Resort 80
Manali (Snow Peaks) Himachal Pradesh Domestic Resort 34
Naldhera Himachal Pradesh Domestic Resort 115
Dharamshala Himachal Pradesh Domestic Resort 23
Shimla (Mashobra) Himachal Pradesh Domestic Resort 67
Virajpet (Coorg) Karnataka Domestic Resort 180
Coorg Karnataka Domestic Resort 220
Eagleton Golf Resort Karnataka Domestic Resort 25
Golden landmark Mysore Karnataka Domestic Resort 25
Vijayshree Hampi Karnataka Domestic Resort 15
Sarovar Portico Kashmir Domestic Resort 15
Elizabeth Kashmir Shikara/ Houseboat Kashmir Domestic Houseboat 25
Munnar Mount Serene Kerala Domestic Resort 51
Basuram (Poovar) Kerala Domestic Resort 73
Munnar Kerala Domestic Resort 120
Ashtamudi Kerala Domestic Resort 133
Thekkady Kerala Domestic Resort 49
Cherai Kerala Domestic Resort 49
Wayanad Kerala Domestic Resort 36
Olive Down Town Kochi Kerala Domestic Resort 15
Arookutty Kerala Domestic Resort 82
Ramada Alleppey Kerala Domestic Resort 25
The Driftwood Leh, Ladakh Ladakh Domestic Resort 15
Kanha Madhya Pradesh Domestic Resort 62
Bundela Resort - Bandhavgarh Madhya Pradesh Domestic Resort 15
Bundela Resort Khajuraho Madhya Pradesh Domestic Resort 35
Tungi (Lonavla) Maharashtra Domestic Resort 148

Club Mahindra resort network (contd.)
Resorts Name State Category Property Rooms
Mahabaleshwar Maharashtra Domestic Resort 73
Anando Palms (Hatgad) Maharashtra Domestic Resort 75
SAJ Mahabaleshwar Maharashtra Domestic Resort 78
Ganapathipule Maharashtra Domestic Resort 40
U-Tropicana Maharashtra Domestic Resort 92
Polo Towers, Shillong Meghalaya Domestic Resort 10
Pudhucherry Puducherry Domestic Resort 125
Kumbhalgarh Rajasthan Domestic Resort 68
Jaisalmer Rajasthan Domestic Resort 74
Udaipur (Paras) Rajasthan Domestic Resort 124
Pratap Nivas Rajasthan Domestic Resort 38
Park Regis Rajasthan Domestic Resort 72
Clarks Ranthambore Rajasthan Domestic Resort 20
Mount Abu Rajasthan Domestic Resort 10
Clarks Safari, Pushkar Rajasthan Domestic Resort 20
Baiguney Sikkim Domestic Resort 31
Gangtok Sikkim Domestic Resort 32
Kalimpong Sikkim Domestic Resort 7
Darjeeling Sikkim Domestic Resort 15
La Vintuna, Gangtok Sikkim Domestic Resort 49
Ooty (Derby Green) Tamil Nadu Domestic Resort 89
Zest-Kodai Tamil Nadu Domestic Resort 11
Zest-Ooty Tamil Nadu Domestic Resort 15
Kodai (Le Posche) Tamil Nadu Domestic Resort 35
JKR Resort & Spa at Rameswaram Tamil Nadu Domestic Resort 35
Ramada Plaza Agara Uttar Pradesh Domestic Resort 45
Binsar Uttarakhand Domestic Resort 58
Corbett Uttarakhand Domestic Resort 81
Kanatal Uttarakhand Domestic Resort 38
Mussourie Uttarakhand Domestic Resort 72
Naukuchiatal Uttarakhand Domestic Resort 31
Bengal Ganga Houseboat West Bengal Domestic Houseboat 26
Hotel Tashi Phuntshok Bhutan International Resort 20
Hotel Dragon Nest Bhutan International Resort 10
Mount Lavinia Sri Lanka International Resort 20
Dubai Dubai International Resort 75
Westin Nusa Dua, Bali Indonesia International Resort 15
Park Royal - Kuala Lumpur Malaysia International Resort 20
Swissotel Phuket Thailand International Resort 20
Park Royal - Singapore Singapore International Resort 25
Club Bentota Beach, Sri Lanka Sri Lanka International Resort 20
Bangkok-MAC boutiques Thailand International Resort 68
The Bayview Hotel, Pattaya Thailand International Resort 30

MHRIL is growing its footprint of resorts with varied destination choices for its active members.
The company has 117 properties including
• 73 properties in India with a room inventory of 4,294 rooms,
• 11 properties in South-East Asia and the Middle East with a room inventory of 323
rooms
• 33 properties in Europe across Finland, Sweden and Spain through a wholly owned
subsidiary Holiday Club Resort Oy (HCRO).
Club Mahindra resort network
Rooms per
States Properties Rooms
property
Andaman & Nicobar Island 3 32 11
Andhra Pradesh 1 15 15
Daman & Diu 2 52 26
Goa 4 575 144
Gujarat 5 239 48
Himachal Pradesh 6 379 63
Karnataka 5 465 93
Kashmir 2 40 20
Kerala 10 633 63
Ladakh 1 15 15
Madhya Pradesh 3 112 37
Maharashtra 6 506 84
Meghalaya 1 10 10
Puducherry 1 125 125
Rajasthan 8 426 53
Sikkim 5 134 27
Tamil Nadu 5 185 37
Uttar Pradesh 1 45 45
Uttarakhand 5 280 56
West Bengal 1 26 26
International 11 323 29
Total Properties 86 4,617 54
Holiday Club Resorts Oy – A wholly owned subsidiary, which is dragging the

consolidated performance of MHRIL
MHRIL acquired an 18% stake in Holiday Club Resorts Oy (HCRO) in Aug 2014 for EUR 17 mn.
It further increased its stake to 100% for a total equity infusion of EUR 50 mn and debt of
another EUR 70 mn. The pandemic impacted the tourism industry in Europe and then the
Russia-Ukraine conflict completely changed the dynamics for the worst.
MHRIL is cautiously taking steps to improve the business and working on cost optimization to
recover from losses. Additionally, both the assets and debt under HCRO are in Euro currency

and MHRIL is not infusing capital in HCRO, which separates the standalone business of MHRIL
from any forex or business-related risk associated with HCRO.
HCRO financial summary and performance

Fig in EUR mn (unless specified) FY18 FY19 FY20 FY21 FY22 Q1FY22 Q1FY23
Revenue 165.0 161.1 157.3 99.5 122.1 21.0 33.5
YoY Growth (%) -2.4 -2.3 -36.8 22.7 59.5
EBITDA 12.0 7.8 6.7 -8.9 -0.3 -3.5 -1.5
EBITDA Margin (%) 7.3 4.8 4.3 -8.9 -0.2 -16.7 -4.5
Less: Depreciation 5.7 5.7 5.7 5.4 4.6 1.2 1.1
Less: Finance Cost 0.8 1.3 0.8 0.9 1.0 0.3 0.2
PBT 5.5 0.8 0.3 -15.2 -5.9 -5.0 -2.8
PBT Margin (%) 3.3 0.5 0.2 -15.3 -4.8 -23.8 -8.4
Less: Taxes 1.0 -0.3 -0.2 3.1 0.6 0.9 0.5
PAT 6.5 0.5 0.0 -12.1 -5.3 -4.1 -2.3
PAT Margin (%) 3.9 0.3 0.0 -12.2 -4.3 -19.5 -6.9
Net Debt 27.8 25.1 19.6 25.9 21.5

Net Worth 69.5 73.2 69.7 56.5 48.2
RoE (%) 9.4 0.7 0.0 -21.4 -11.0

RoIC (%) 6.5 2.1 1.2 -17.4 -7.0
Net Debt to Equity (X) 0.4 0.3 0.3 0.5 0.4

Net Debt to EBITDA (X) 2.3 3.2 2.9 -2.9 -71.7
Other initiatives and services to enhance customer engagement
To further enhance the engagement with its customers, MHRIL recently added a bouquet of
services to its leisure travel portfolio –
• ‘Horizon’ Holiday Exchange Programme – Members can exchange their Club
Mahindra room nights for stays in top-rated hotel chains after paying a nominal access
fee. This currently covers over 360+ partner hotels and resorts across more than 145
destinations in India and abroad. The platform now also supports real-time availability
and booking in select hotels, adding to the convenience and increased utilization.
• Travel Services and Curated Holiday Experiences – Offers its members a wide range
of travel services such as airport transfers, travel assistance, curated holiday
experiences, seasonal tours and weekend getaways. Members can book individual
services or complete travel packages at attractive discounts under one roof on the
company’s online platforms.

• ‘Club M Select’ – An exclusive subscription programme which allows enrolled
members access to several luxury lifestyle offerings:
o Air travel benefits such as free meals and seat selection;
o Dining privileges;
o Access to golf clubs, health and wellness programmes;
o International cruises, over four lakh hotels around the world and over 70,000
international excursions.
• The platform provides exclusive member-only pricing, real-time booking, unrestricted
access and usage as well as zero transaction charges. In FY22, it added airport services
such as lounge access, premium transfers, meet and assist, SPA; and a free subscription
to the yoga studio.
• MHRIL has increased its stake in Great Rocksport Pvt Ltd (‘Rocksport’) from 6.67% to
23.42%. The primary objective is to enhance outdoor experience offerings by
developing theme adventure parks in Club Mahindra resorts. The company has
launched three themed adventure parks as a part of this partnership –
o Pirate Village at Puducherry,
o Jungle Adventure Park (Muguli theme) in Assonora (Goa) and
o Ape Adventure Land in Netrang (Gujarat).
MHRIL members will also have access to Rocksport’s facilities in cities. Further, it is
expected that there will be cross-selling of services by MHRIL and Rocksport.
• Members also have access to ‘Dreamscapes’ — an online platform that provides
2,000+ in-city experiences in 60+ cities.
Asset light property management – A new vertical with significant growth

opportunities
The company is planning to acquire management contracts for non-Club Mahindra resorts and
target local hotels that have limited access to technology and hospitality experience to manage
the hotel property. It will be an asset-light model of getting inventory for members in those
locations where Club Mahindra resorts don’t have a presence.
Such resorts will be open for both members and non-members of Club Mahindra. The
members will get access to the locations where Club Mahindra resorts don’t have a presence
while MHRIL will get access to the data of non-Club Mahindra members which could be used
to mine new members for Club Mahindra services.
The management has not revealed the expansion strategy for this vertical, we believe that
revenue recognition will be faster in this business and it will also accelerate member addition
in the coming years.

How MHRIL earns its revenue and how it is different from the conventional
hotel business?
MHRIL has a unique business model where it funds its capex from customers’ advance
subscription money and also charges annual subscription fees to keep the membership active.
The company has multiple price packages for different categories of customers, ranging from
premium to middle class and young couples to senior citizens.
Club Mahindra services and their cost
Membership Price (INR) Details

Purple 2 BR 22,66,520
Purple is a 25 years membership is for those who prefer to travel only on holidays
Purple 1 BR 13,10,330 and on high-demand weekends. This plan is perfect for vacationers who like to plan
Purple Studio 10,20,370 ahead and fix their holiday calendar for peak dates.
Red 2 BR 15,74,810
Red is a 25 years membership for those who prefer to travel during summer
Red 1 BR 9,06,920
vaccations or Diwali vaccations.
Red Studio 6,79,800
White 2 BR 10,58,620
White is a 25 years membership for those who take a vacation just before or after
White 1 BR 6,85,980 the peak season. So if you have the freedom to plan your holidays to avoid crowded
White Studio 5,13,320 times like summer school holidays, then this membership is just right for you.
Blue 2 BR 8,50,030
Blue is a 25 years membership is for those who prefer to travel in off peak seasons
Blue 1 BR 4,91,830 and see the other side of a destination like enjoying Goa in the monsoons or
Blue Studio 3,71,980 enjoying a snowy winter in Himachal.
Bliss Classic 2,46,630

Bliss is a 10-year membership for individuals above the age of 50 years. It is a Club
Bliss Premium 3,15,650
Mahindra membership customised to cater to the specific needs of senior citizens.
Bliss Signature 4,35,710
Go Zest Classic 1,25,000
GoZest is a 3-year membership for couples in the age group of 25 to 35 years.
Go Zest Premium 1,75,000
To check the cost-benefit analysis between Club Mahindra and conventional hotels, we
calculated the cost of the stay for 25 years and considered a flat annual inflation rate of 6%. In
its ‘Red Studio package’, MHRIL takes INR 6.8 lacs upfront as ‘Vacation Ownership Fees’ from
its members and charges ~INR 12,000 annually as ‘Annual Subscription Fees’. At this cost of a
stay, MHRIL offers a 7N/8D annual package to its members.

Compared to any conventional hotel cost, Club Mahindra services offers a 25% discount to
its members
• A hotel room in India would cost a minimum of INR 7,000 per night in the peak season
(summer vacation or Diwali vacation), amounting to INR 49,000 every year for 7N/8D.
Over the next 25 years, that would equal INR 12.3 lacs and with inflation of 6%, it would
cost INR 26.9 lacs.
• With the Club Mahindra ‘Red Studio’ package, the same room costs INR 20.2 lacs for
25 years (including the annual inflation of 6%), which is ~25% lower than the
conventional hotel cost of INR 26.9 lacs.
MHRIL resort network in India
Cost of hotel stay - Club Mahindra vs Non Club Mahindra Analysis

Non Club Mahindra Charges
Per night hotel room rate (INR) 7,000
No of nights in a year by Club Mahindra 7
Total cost of stay in a year (INR) 49,000
Cost of stay for 25 years @ 6% inflation (INR) 26,88,361
Club Mahindra charges
A - Vaccation ownership charge for 25 years (INR) 6,79,800
B - Annual subscription fees for 25 years @ 6% inflation (INR) 13,38,174
A+B = Total cost of stay at Club Mahindra for 25 years (INR) 20,17,974
Discount to Non Club Mahindra (%) 24.9
In addition, the Club Mahindra members can accumulate their membership nights for up to 3
years and plan a longer domestic or international holiday of up to 21N/22D. The above analysis
is only for India, if one compares the cost of staying at hotels abroad, especially with fluctuating
exchange rates, the benefits further favour vacation ownership.
The unique subscription-based business model secures the cash flow for the company and
thereby maintains the operating profitability.

MHRIL sustained consistency in its operating performance, compared to its peers
FY19-22
Company Criteria FY19 FY20 FY21 FY22 Q1FY23
CAGR (%)
Room Inventory (nos) 3,595 3,732 4,197 4,568 8.3 4,617
Revenue (INR Cr) 918.3 977.0 822.3 960.7 1.5 287.9
Revenue per room (INR lacs) 25.5 26.2 19.6 21.0 -6.3 6.2
MHRIL EBITDA Margin (%) 12.1 18.6 24.3 24.4 23.6
PAT Margin (%) 7.0 -11.1 14.3 15.2 11.8
Net Debt to Equity (X) -1.1 -2.3 -0.7 -0.7
Net Debt to EBITDA (X) -3.0 -2.3 -1.2 -1.6
Revenue (INR Cr) 4,512.0 4,463.0 1,575.0 3,056.0 -12.2 1,266.0
IHCL EBITDA Margin (%) 18.4 21.7 -23.0 13.3 29.9
PAT Margin (%) 6.6 8.2 -50.5 -8.7 14.3
Net Debt to Equity (X) 0.5 1.0 1.5 0.4
Net Debt to EBITDA (X) 2.5 4.3 -14.8 6.7
Revenue (INR Cr) 550.0 669.0 252.0 402.0 -9.9 192.0
Lemon Tree Hotels EBITDA Margin (%) 30.7 36.0 22.6 29.6 45.8
PAT Margin (%) 10.2 -1.9 -74.2 -34.1 7.3
Net Debt to EBITDA (X) 6.9 8.2 35.4 17.4
Revenue (INR Cr) 1,811.0 1,596.0 494.0 985.0 -18.4 394.0
EIH EBITDA Margin (%) 22.4 18.5 -71.7 -4.6 23.6
PAT Margin (%) 8.2 10.3 -75.9 -9.6 16.8
Net Debt to EBITDA (X) 0.8 1.4 -0.9 -4.8
Standalone financials for MHRIL
What is driving the growth in subscription fees and overall revenue

performance and how it is benefiting the financial performance?
Healthy membership addition
In a turbulent period of the pandemic in FY21/FY22 and the recent Russia-Ukraine conflict,
MHRIL added 22,406 new members during FY19-22 (net of one-off cancellation of 9,556
members in FY19 and 14,782 members in FY21) which increased its active member base to
2,65,980 in FY22 (2,69,445 members as on 30th Jun 2022). This could be attributed to the post-
pandemic revenge travel and the company’s strategy of customer acquisition through digital
marketing and continued emphasis on referrals.

This strategy along with improving consumer sentiments is expected to sustain robust member
additions in the coming years. We are expecting the active member count to increase to
3,24,500 by FY25 (FY22-25E CAGR growth of 6.9%).
Augmentation of room inventory
MHRIL continues to focus on increasing its room inventory by way of identifying new tourist
destinations, to cater to the rising needs of its expanding active member base. The new
destinations keep the product offerings attractive and drive incremental growth in the active
member base.
During FY19-22, MHRIL added 973 rooms to its inventory which took its total room inventory
to 4,568 in FY22 (4,617 as on 30th Jun 2022). Growth in room inventory was faster than the
member addition, which
• reduced the member-to-room ratio from 67.8X in FY19 to 58.2X in FY22,
• reduced the member traffic on room inventory and increased the chances of room
availability during the peak seasons
• improved the occupancy rate from 83% in FY19 to 89% in Q1FY23.
Based on the historical occupancy rate and current member-to-room ratio, we are expecting
an occupancy rate of 85% and a member-to-room ratio of 59X in FY25. Despite a conservative
member-to-room ratio, we are expecting the active member count to increase to 3,24,500 by
FY25 (FY22-25E CAGR growth of 6.9%).
Room additions has been faster than the incremental growth in members
MHRIL is targeting 5,500 rooms by FY25 and Aggressive member addition will impact the
occupancy is expected to remain robust member-to-room ratio
Nos Number of rooms Occupancy (%) % Nos Members Member to room ratio (X) X
6,000 88 3,40,000 72
5,500 86 3,20,000 70
84 68
5,000 3,00,000
82
66
4,500 80 2,80,000
64
4,000 78 2,60,000
62
76
3,500 2,40,000
3,24,500
2,43,574
2,58,336
2,54,431
2,65,980
2,81,445
3,01,860
74 60
3,595
3,732
4,197
4,568
4,830
5,160
5,500
3,000 72 2,20,000 58
2,500 70 2,00,000 56

Faster revenue growth and the benefits of operating leverage
Driven by the robust member additions and a stable occupancy rate, the revenue segments
are expected to report strong growth
• 11.0% CAGR growth in vacation ownership income to INR 538 cr and 8.2% CAGR
growth in annual subscription fees to INR 390 cr due to an increase in both room
inventory and active member count to 5,500 and 3,24,500 respectively by FY25. We
are expecting an 85% occupancy rate and a member-to-room ratio of 59X in FY25.
• 28.1% CAGR growth in resort income to INR 405 cr due to the low base of FY22 on
account of 2nd wave of the pandemic.
• 6.7% CAGR growth in interest income to INR 81 cr and expecting the EMI members
penetration of 15% in the total members.
MHRIL segmental performance

Consistency in member addition to drive 25 years of subscription period ensures long
vaccation ownership revenue term recurring ASF income
INR Cr Vaccation Ownership YoY Growth (%) % INR Cr Annual Subscription Fees YoY Growth (%) %
600 20 410 24
550 10 380 21
500 0 350 18
450 15
(10) 320
400 12
(20) 290
350 9
300 (30) 260 6
250 (40) 230 3
200 (50) 200 0
Higher occupancy rate on rising room inventory Interest income to remain stable due to
to improve resort income moderate number of EMI members
INR Cr % INR Cr %
Resort Income YoY Growth (%) Interest Income YoY Growth (%)
450 100 140 40

400 80 120 30
350 60 20
100
300 40
10
250 20 80
0
200 0 60
(10)
150 (20)
40 (20)
100 (40)
50 (60) 20 (30)
0 (80) 0 (40)

The hotel business operates on a fixed cost model, hence increase in member addition and
higher occupancy rate on rising room inventory will kick in the benefits of operating leverage.
The fixed overheads will be absorbed on a higher revenue base, thereby improving the
profitability of the company.
Incremental addition in room and member to drive financial performance

Particulars FY19 FY20 FY21 FY22 FY23E FY24E FY25E
Active Members (nos) 2,43,574 2,58,336 2,54,431 2,65,980 2,81,445 3,01,860 3,24,500
No of rooms (nos) 3,595 3,732 4,197 4,568 4,830 5,160 5,500
Member-to-room ratio (X) 67.8 69.2 60.6 58.2 58.3 58.5 59.0
Occupancy Rate (%) 83.0 80.0 72.0 74.0 86.0 85.0 85.0
No of occupied rooms (nos) 2,984 2,986 3,022 3,380 4,154 4,386 4,675
VO Income (INR cr) 315.5 346.7 345.1 393.4 443.0 486.2 537.7
Avg VO income per member (INR) 13,162 13,816 13,459 15,118 16,183 16,669 17,169
ASF (INR cr) 261.4 291.3 293.0 307.9 321.3 352.6 390.0
Avg ASF per member (INR) 10,906 11,608 11,430 11,832 11,738 12,091 12,453
Resort Income (INR cr) 219.7 228.3 104.4 192.6 326.5 361.9 405.1
Resort income per occupied room (INR lacs) 7.4 7.6 3.5 5.7 7.9 8.3 8.7
Interest Income (INR cr) 121.7 110.7 79.8 66.9 70.5 75.6 81.3
Total Revenue (INR cr) 918.3 977.0 822.3 960.7 1,161.2 1,276.3 1,414.1
YoY Growth (%) -13.7 6.4 -15.8 16.8 20.9 9.9 10.8
EBITDA (INR Cr) 111.5 181.5 199.7 234.5 266.4 285.8 316.1
EBITDA Margin (%) 12.1 18.6 24.3 24.4 22.9 22.4 22.4
EBITDA per room (INR lacs) 3.1 4.9 4.8 5.1 5.5 5.5 5.7
PAT (INR Cr) 63.9 -108.2 117.4 146.3 125.7 126.7 149.6
PAT Margin (%) 7.0 -11.1 14.3 15.2 10.8 9.9 10.6
PAT per room (INR lacs) 1.8 -2.9 2.8 3.2 2.6 2.5 2.7
Source: Times of India

Strong rebound in the performance of the Indian hotel industry
The Indian hotel sector made steady progress in H1CY22. Nationwide occupancy was in the
range of 56-58% (+22bps higher than H1CY21 and -9bps lower than H1CY19). The strong
recovery in occupancy rate is driving steady increases in average room rates, with hotels,
particularly in the leisure sector, outperforming their pre-pandemic average rates. Corporate
bookings are also gradually improving as business travel and large-ticket conferences and
events return.
Indian hotel sector performance
INR ADR RevPAR Occupancy (%) %
7,000 70
6,000 60
5,000 50
4,000 40
3,000 30
2,000 20
1,000 10
0 0
Q2CY22
Q1CY20
Q2CY20
Q3CY20
Q4CY20
Q1CY21
Q2CY21
Q3CY21
Q4CY21
Q1CY22
Source: HVS
This upbeat travel sentiment helped the Indian hotel sector to close the Q2CY22 on a high
note. The nationwide hotel occupancy of 64.7% during Q2CY22 was 1.2bps higher than in
Q2CY19. The faster-than-expected recovery in demand has resulted in significant
improvements in average rates to INR 5,865, up 6% from Q2CY19, while RevPAR reached INR
3,793, a rise of 8% from Q2CY19.
What is driving the performance of the hotel industry in India?
Lower penetration of the organized hotel sector in India compared to the US and
China offers a significant growth opportunity
Most of the hotel development in India was focused on key business destinations as corporate
and business travellers accounted for a large share of hotel demand. Due to the lack of logistics
and insufficient travelling infrastructures such as road, rail and airports and the seasonal nature
of leisure travel, hoteliers found the leisure stay category to be less profitable. The Indian hotel
industry remains significantly underpenetrated compared to the US, China and the global
average.

However, with the increase in domestic leisure business due to the improvement in
rail/road/air connectivity and higher disposable incomes to spend, the Indian hotel industry is
expected to perform well in the coming years. Additionally, compared to business travellers,
leisure travellers are sticky and typically stay longer and utilize more services at hotels, which
improves resort income. Average hotel rates in leisure destinations are also likely to be higher
than in business hotels, making the investment more attractive.
Pre-pandemic, the size of the organized hotel industry in India stood at ~US$ 6.8 bn in CY19
and the share of hotel users in the total population was 3.0%, compared to US$87.0 bn/43.3%
in the US and US$69.2 bn/17.3% in China.
Organized hotel penetration is lowest in India compared to the USA and China
CY17-21 CY21-26E
Worldwide CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E CY25E CY26E
CAGR (%) CAGR (%)
Revenue (US$ bn) 345.3 356.7 369.8 143.9 215.2 348.0 406.5 447.0 461.1 473.2 -11.1 17.1
ARPU (US$) 322.8 325.6 329.1 328.2 350.2 358.8 358.8 354.4 357.8 360.2 2.1 0.6
Online booking penetration (%) 66.0 68.0 70.0 71.0 73.0 74.0 76.0 77.0 78.0 80.0
No of users (mn) 1,069.6 1,095.5 1,123.6 438.5 614.5 969.8 1,133.1 1,261.4 1,288.8 1,313.7 -12.9 16.4
Total Population (in mn) 7,547.9 7,631.1 7,713.5 7,794.8 7,884.1 7,967.1 8,050.1 8,133.1 8,216.1 8,299.1
Share of hotel users in population (%) 14.2 14.4 14.6 5.6 7.8 12.2 14.1 15.5 15.7 15.8
CY17-21 CY21-26E
India CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E CY25E CY26E
CAGR (%) CAGR (%)
Revenue (US$ bn) 6.0 6.4 6.8 3.3 4.7 6.4 7.7 9.1 9.6 10.1 -5.6 16.4
ARPU (US$) 163.9 163.7 163.7 164.0 164.5 165.4 166.5 168.0 169.1 170.3 0.1 0.7
No of users (mn) 36.3 38.8 41.3 20.3 28.7 38.7 46.0 54.4 56.9 59.2 -5.7 15.6
CY17-21 CY21-26E
USA CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E CY25E CY26E
CAGR (%) CAGR (%)
Revenue (US$ bn) 78.5 82.5 87.0 37.0 68.8 99.7 106.2 110.6 114.5 117.9 -3.3 11.4
ARPU (US$) 577.8 592.5 610.1 629.3 650.4 670.9 690.5 709.0 725.6 740.1 3.0 2.6
No of users (mn) 135.8 139.2 142.6 58.8 105.7 148.6 153.8 156.0 157.8 159.3 -6.1 8.5
Total Population (in mn) 325.1 327.1 329.1 331.0 333.0 335.1 337.2 339.3 341.4 343.5
CY17-21 CY21-26E
China CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E CY25E CY26E
CAGR (%) CAGR (%)
Revenue (US$ bn) 66.0 67.2 69.2 33.5 47.4 64.8 78.2 93.7 98.6 102.8 -7.9 16.7
ARPU (US$) 273.6 274.9 278.7 286.2 297.2 310.4 323.6 335.4 345.0 352.2 2.1 3.4
No of users (mn) 241.4 244.4 248.4 117.0 159.6 208.8 241.6 279.2 285.8 291.9 -9.8 12.8
Source: Statista

After a lull period of CY20 and CY21 (due to the pandemic) we are expecting leisure stay to
strongly pick up due to pent-up demand and revenge travel. Further, with the increasing travel
propensity due to the development of tourist destinations and the improvement in rail/ road/
air connectivity, the organized market of the Indian hotel industry is expected to recover
strongly.
As per Statista, the organized hotel industry is expected to reach US$ 6.4 bn in CY22 and US$
10.1 bn by CY26 (CAGR growth of 16.4% during CY21-26E). The share of organized hotel users
in the total population is also expected to improve to 3.9% by CY26. The industry growth is
expected to be largely driven by the domestic leisure hotel stay segment
Leisure hotel market is driven by domestic tourists
CY19 leisure tourism share CY26E leisure tourism share Leisure hotel revenue (US$ bn)
(%) (%)
Domestic Tourist Foreign Tourist
10
9.0
Foreign 9
Tourist, 8
Foreign 11
Tourist, 7
17 5.6
6
5
4
Domestic Domestic 3
Tourist, 83 Tourist, 89 2 1.2 1.1
1
0
CY19 CY26
Source: IBEF
There has been an increase in the demand for luxury hotel stay among Indian consumers, due
to rising consumer spending on account of improvement in income levels and increase in
disposable income. In line with this, key players are expanding their presence to cater to this
demand. While the pandemic brought the tourism industry to a halt, the government is now
trying to begin reviving domestic tourism.
As the pandemic-led lockdown restrictions are now relaxed, many people are looking forward
to taking short vacations. Holiday-goers will now prefer private hotel rooms and vacation
homes to feel secure during their trips.

India offers a wide bouquet of tourist places and the government is developing
tourism infrastructure and connectivity
In terms of tourism, India offers tourists a wide bouquet of experiences, from centuries-old
heritage and diverse culture to varied wildlife, unusual adventures, singular culinary traditions
and a rich ecological experience, which makes it one of the most unique tours and travel
destinations in the world.
With a growing economy, a young population with a median age of 29 years, and a growing
middle class, India is ideally positioned to become one of the most lucrative tourism markets
in the world and the tourists visiting chain hotels are expected to grow at a CAGR of 15.6%
during CY21-26E.
Advantage India
Source: IBEF
With economic reforms and favourable changes in demography, new tourism trends are
evolving in India, especially rural tourism, pilgrimage tourism, eco-tourism, luxury tourism,
heritage tourism, medical tourism and adventure tourism.

Emerging tourism and hospitality segments in India
Source: IBEF
India’s tourism sector is estimated to contribute US$ 250 Bn to GDP, 137 mn jobs and US$ 56
bn in forex earnings. Around 25 mn foreign arrivals are expected to be achieved by 2030. To
achieve these targets, the government is taking initiatives on infrastructure development and
increasing direct air/ rail/ road connections to popular and upcoming destinations, which is
expected to improve the tourist crowd in those upcoming tourist places.
Various government initiatives and other tailwinds include –
• PRASAD scheme to promote religious tourism in India – PRASAD (Pilgrimage

Rejuvenation and Spiritual Augmentation Drive) is the scheme which focuses on
developing and identifying pilgrimage sites across India for enriching the religious
tourism experience.
The project aims to integrate pilgrimage destinations in a prioritized, planned and

sustainable manner to provide a complete religious tourism experience. Till FY22, a
total of 28 projects have been sanctioned for an amount of INR 840 cr under this
scheme.

Destinations identified under PRASAD scheme
Source: Industry Reports
Other upcoming cities which are expected to be included under the PRASAD scheme,
are Ayodhya (Ram Janma Bhumi), Ujjain (Mahakal Temple), Shirdi (Sai Baba Temple)
and Vaishno Devi (Jammu). Each of the PRASAD cities along with the above-mentioned
religious places have the potential to attract 30-50 mn visitors annually.
According to a Ministry of External Affairs report, there are 32 mn NRIs residing outside
India and overseas Indians comprise the world's largest overseas diaspora. Every year,
2.5 mn Indians migrate overseas, which is the highest annual number of migrants in
the world. India could attract NRIs to visit the country’s spiritual and pilgrimage sites.

Pilgrimage destination development status
Annual no of
Pilgrimage hotspot State/UT Temple name Status
visitors
Tirupati Andhra Pradesh Balaji Proposal for development 40 million
Gaya Bihar Bodh Gaya PRASAD development 2 million
New Delhi Delhi NCR Akshardham - Sita Ram Developed 9 million
Somnath Gujarat Somnath Under development 10 million
Dwaraka Gujarat Krishna PRASAD development 1 million
Vaishno Devi Jammu Vaishno Mata Proposal for development 8 million
Ujjain Madhya Pradesh Mahakal Proposal for development 3 million
Shirdi Maharashtra Sai Baba Proposal for development 30 million
Puri Odisha Jagannath PRASAD development 15 million
Amritsar Punjab Golden Temple PRASAD development 40 million
Rameshwaram Tamil Nadu Ramanathaswamy Proposal for development 7 million
Kanchipuram Tamil Nadu Kailasanathar Temple PRASAD development NA
Vellankanni Tamil Nadu Sri Ayyaranar PRASAD development NA
Varanasi Uttar Pradesh Vishwanath Developed 22 million
Mathura Uttar Pradesh Dwarakadhish PRASAD development 1 million
Ayodhya Uttar Pradesh Ram Janma Bhumi Under development 25 million
Haridwar Uttarakhand Shiv and Ganga Proposal for development 1-2 million
Badrinath - Kedarnath Uttarakhand Shiv PRASAD development 0.2 million
Kamakhya West Bengal Kamakhya Devi Temple PRASAD development 3 million
• 400 Vande Bharat trains to be operational by FY25 – The government announced in

the recent union budget, that 400 semi-high-speed Vande Bharat trains with new-
generation technology and facilities will be functional in the next three years. By 15th
Aug 2023, almost all megacities of the country will be linked with the Vande Bharat
trains.
Vande Bharat trains offers a combination of convenience and speed, as they can travel
at a top speed of 180 kmph (the new version is expected to achieve 200 kmph speed)
and also offers passengers a superior travelling experience similar to the airlines.
• Wildlife tourism is gaining momentum – Wildlife tourism in India is growing at a CAGR

of 15%, with 70% of visitors being Indian. It has increased dramatically in recent years
as a result of a rise in visitors, as well as excessive advertising and development.
India preserves its wildlife in 120+ national parks, 515 wildlife sanctuaries, 26
wetlands, and 18 bio-reserves, out of which 10 are part of the World Network of
biosphere reserves. To protect and enhance the wildlife in India, the government has
also taken up some important wildlife protection projects such as the Project Tiger,
Project Elephant, Crocodile Conservation Project, UNDP Sea Turtle Project, Project

Rhino, the Great Indian Bustard, and the recent arrival of African Cheetah in Kuno
National Park.
India offers a diversified wildlife experience which is unique
• North East development – India’s North East Region (NER) offers a wide range of
attractions for all kinds of visitors. The region is home to many scenic hills, valleys,
rivers and other natural wonders. However, infrastructure has been a challenge to
connect NER with the rest of India. The government is taking initiatives to improve rail
and road connectivity, which is expected to significantly enhance tourism activities in
the region.

Road construction in the NER more than doubled under the NDA government, rising
from just 0.6 km of national highway being laid per day under the UPA government to
more than 2.5 km per day between 2014-22. The government is carrying out
o 20 rail projects for 2,011 km, worth an amount of INR 74,000 cr, which are
spread across the NER.
o 4,000 km of roads in the region at a cost of INR 58,000 cr.
o Under the UDAAN scheme, the government is connecting NER with the
airports of major Indian cities. The government has also identified routes
connecting Guwahati, Imphal and Agartala with selected international
destinations viz. Bangkok, Dhaka, Kathmandu, Yangon, Hanoi, Mandalay,
Kunming and Chittagong.
• National Tourism Policy and change in GST rates – Formulation of National Tourism
Policy 2015 was initiated to encourage Indian citizens to explore their own country as
well as position the country as a ‘Must See’ destination for global travellers. To further
promote investment in the tourism sector, the new Draft National Tourism Policy 2022
mentions granting industry status to the tourism sector, along with formally granting
infrastructure status to hotels. The government changed the GST rates on hotel rooms
to make them affordable for the middle class.
Change in GST rates to benefit hotel industry

GST rate (%) GST rate (%)
Room rent (INR per night) Room rent (INR per night)
till Sep 2019 post Sep 2019
Upto INR 1,000 Exempt Upto INR 1,000 Exempt
INR 1,001 to INR 2,499 12 INR 1,001 to INR 7,500 12
INR 2,500 to INR 4,999 18 INR 7,501 and above 18
INR 5,000 and above 28
For the hotel industry, GST eliminated a number of other taxes, resulting in fewer
procedural steps and greater opportunities to streamline the taxation process. This
has created a level playing field for both hotel chains and local hotel operators. Online
tracking of invoice-level transactions through the GST portal is helping the government
to curb tax evasion, which was prevalent in the unorganized local hotel market.
GST has reduced the pricing advantage of unorganized local players. As a result,
organized hotel chains not only capture the new incremental demand, but it has also
succeeded in shifting the demand away from the unorganized market in their favour.
• UDAAN to improve the travel propensity in India – The top 4 countries with the
highest propensity to travel via Air are noted to be Australia, the US, Canada and Japan.
The countries with low air travel propensity are the BRIC countries, Indonesia and
Mexico. Amongst the least air travel propensity countries, India is the lowest.

India has the lowest air travel propensity globally
3.5
2.94
3.0
2.52
2.5
2.23
2.0
1.5
1.0 0.90
0.54 0.47
0.5 0.39 0.34 0.33
0.08
0.0
Australia USA Canada Japan Russia Brazil Mexico Indonesia China India
• UDAN (UdeDesh ka Aam Naagrik) aims to link underserved and unserved airports in
the country. The Regional Connectivity Scheme (RCS) aims to increase inter-regional
connectivity by connecting 70 airports through 128 routes operated by five airlines.
According to the latest findings, of 70 airports, 31 are unserved and 12 are

underserved. An under-served airport is one that has less than a flight per day,
whereas an unserved airport has none.
Post-pandemic and Russia-Ukraine war, Europe is in the midst of an economic and

geopolitical crisis, which is expected to reduce the tourist crowd on the continent. Similarly,
China’s aggressive stance on multiple global fronts has changed the global sentiments
towards the country. We believe that with India’s improving economic and demographic
outlook along with the above-mentioned developments and government initiatives to
promote tourism, India is expected to attract foreign tourists who used to spend vacations
in Europe and China.
The growing Indian middle class and nuclearization of families are the other
key drivers of growth in the leisure hotel segment
Growing middle class – The households with annual earnings between US$ 5,000-10,000 have
grown at a CAGR of 10% between FY12-20 and their number is projected to further double by
FY25. The households with annual earnings between US$ 10,000-50,000 have grown at a CAGR
of 20% between FY12-20. An increasing number of households with annual earnings of US$
10,000-50,000 has been leading to an increase in discretionary spending on leisure services
and luxury products. The consumption pattern also has moved towards higher spending on
branded products and through organized channels.

An increase in the middle class improved the demand for luxury/leisure products
Households Households
Total
with annual % of total with annual % of total
Year Households
earnings US$ households earnings US$ households
(mn)
5K-10K (mn) 10K-50K (mn)
CY09 236 36 15.3 11 4.7
CY12 254 60 23.6 22 8.7
CY14 267 71 26.6 27 10.1
CY15 274 85 31.0 36 13.1
CY18 295 121 41.0 86 29.2
CY20 310 132 42.6 95 30.6
CY21E 330 147 44.5 115 34.8
Due to the growing number of middle- and higher-income households and rising per capita
income, consumption of discretionary products is likely to grow. The World Economic Forum
projects that high and upper-middle-income groups will grow from 25% in 2019 to 50% of
households by 2030. As consumers become more quality-sensitive, demand for healthy and
innovative hotel offerings will also increase.
Nuclearization of the family – The growth in the number of households exceeds population
growth, which indicates an increase in nuclearization in India. According to the 2011 census,
74% of urban households have five or less members, compared to 65% in 2001. It is expected
that smaller households with higher disposable income will lead to greater expenditure on
leisure and luxury products and services.
Nuclearization of families has improved disposable income

Total Avg Avg urban Decadal CAGR Decadal CGR
Year Households household household of household population
(mn) size (nos) size (nos) (%) (%)
CY81 119 5.5 5.4 19.2 24.7
CY91 148 5.5 5.3 24.4 24.4
CY01 192 5.3 5.1 29.7 25.7
CY11 248 4.8 4.6 29.2 16.4
CY21E 330 4.1 4.9 33.1 17.6

Ventura Business Quality Score
Key Criteria Score Risk Comments
Management & Leadership
The management is of high quality. It has been able to deliver guidance;
Management Quality 8 Low
investor-friendly with timely updates on developments
The promoter holding stands at 67.2% and there is no pledge against this
Promoters Holding Pledge 10 Low
holding as of 30th Jun 2022
The average experience of directors is >30 years with significant experience
Board of Directors Profile 8 Low
in their respective sectors and expert areas
Industry Consideration
The demand is recovering in the hospitality sector due to revenge travel,
Industry Growth 8 Low reopening of offices, resumption of international flights, and a rise in pent-
up demand for other leisure activities.
There is no direct regulatory or policy-related risk for the hotel industry.
Regulatory Environment or Risk 8 Low Rather the GST implementation has created a level playing field for the hotel
industry which has helped organized hotel chains in the past 5 years.
The hospitality sector is vast, and diverse and has a large number of players
Entry Barriers / Competition 5 Medium (both organized hotel chains and unorganized local hotels) due to low entry
barriers in the industry.
Business Prospects
MHRIL’s member addition has been robust during the challenging period of
New Business / Client Potential 8 Low FY21 and FY22. With the upcoming room inventory target of 5,500 by FY25,
we expect robust addition of members in the coming years.
MHRIL’s Club M service is an exclusive programme which allows members

Business Diversification 8 Low access to several luxury lifestyle offerings. Through the acquisition of a 23.4%
stake in Great Rocksport, MHRIL entered into soft adventure activities.
MHRIL has a unique business model of timeshare and vacation ownership.
Market Share Potential 8 Low
There is no other company with such a large scale in the Indian market.
The hospitality sector operates on a fixed cost model and with improving
Margin Expansion Potential 8 Low occupancy, MHRIL is expected to get operating leverage benefits in the
coming years, which will result in higher operating margins
Benefits of operating leverage to improve earnings growth, which would be

Earnings Growth 8 Low
faster than revenue performance.
Valuation and Risk
MHRIL’s working capital to sales is 70-80%, which is funded through the
Balance Sheet Strength 8 Low
inflow from ASF and rental income.
MHRIL has a negative net debt of INR 380 cr (as on 31st Mar 2022) due to its
Debt Profile 8 Low
lighter balance sheet
Lower debt requirement and a comfortable working capital cycle is
FCF Generation 8 Low
generating strong free cash flow.
MHRIL used to pay 35-40% dividends till FY18. MHRIL stopped paying
Dividend Policy 5 Low dividends due to a change in accounting policy leading to transition
difference and negative net worth. Discussions are ongoing with MCA.
Total Score 122 The overall risk profile of the company is good and we consider it as a LOW
Low
Ventura Score (%) 81 risk company for investments

Annual Report Takeaways
We analyzed the FY22 annual report of MHRIL and our key observations are as follows:
Key Takeaways for MHRIL
• Global Scenario:
According to the IMF, world output grew at 6.1% in 2021, compared to a contraction
of 3.1% in 2020. There have also been fewer instances of serious outbreaks of Covid-
19 since the Delta wave in early FY22. However, the war in Ukraine threatens to disrupt
the already hurt leisure industry.
As of April 2022, IMF projects the global economy to grow at 3.6% in 2022, which is
130 basis points below its earlier estimate of 4.9% released in October 2021.
• India’s Leisure Industry:
RBI projected a GDP growth of 7.2% in 2022-23 for India, which is lower than its
December estimates. But the leisure industry has seen a few upsides:
o Quicker recovery from the second wave compared to the gradual recovery
during the first wave and recovery from the third wave in January 2022 was
even faster.
o Significant rebound in domestic leisure travel once the restrictions were lifted
as seen by higher occupancies, record numbers at several resorts and
destinations;
o Room revenues have shown improvement driven by higher average room
rates and improved occupancies. The vacation ownership industry, with its
loyal membership base, has even better prospects.
• Room Addition:
Room additions crossed the 4,500+ mark with gross addition of 385 rooms during the
year. It plans to cross 5,500 rooms by FY 25. For this, it has planned capital expenditure
of 1,000 to 1,200 crore over the next two to two and half years.
• Brand Campaign:
As resorts opened-up after the lockdown, Club Mahindra showcased its resorts and
2,000+ unique experiences with a ‘We Cover India, You Discover India” campaign —
across social media, TV and print — to create brand affinity and enhance interest
among prospects and members. The Club Mahindra website was revamped to improve
engagement and drive organic leads. In 2021-22, these enhancements contributed to
significantly higher organic traffic, digital leads and sales with 58% of the sales coming
from referrals and digital leads.

• Membership:
The Company added 12,764 members in 2021-22, compared to 12,031 in the previous
year. Its also focus on improving member quality along with quantity. Fully-paid
members increased consistently and now comprise of 85% of its cumulative
membership base. It leveraged the strength of its product portfolio to drive sales
across its range of products viz.
‘Club Mahindra’ or CMH25, which is MHRIL’s flagship product in the vacation

ownership business, which is targeted at young families in the 28-plus age group who
like to take regular vacations and spend quality time with their families. It also markets
‘Bliss’ — a flexible points-based product targeted at the 50-plus age group and
‘GoZest’, which is a three-year points-based product aimed at millennial travelers to
introduce them to the Club Mahindra experience. With these products, It has a
complete product portfolio across all life stages of its target audience.
Board of Directors
Details of Board of Directors

Particulars FY19 FY20 FY21 FY22
Arun Nanda CH CH CH CH
Kavinder Singh MD MD MD MD
Rohit Khattar NEID NEID NEID NEID
Sridar Iyengar NEID NEID NEID NEID
Sanjeev Aga NEID NEID NEID NEID
Sangeeta Talwar NEID NEID NEID
Diwakar Gupta NEID NEID
Anish Shah NED NED
Ruzbeh Irani NED NED
Cyrus Guzder NEID NEID
Radhika Shastry NEID NED
Vineet Nayyar NED
V S Parthasarathy NED NED NED
Source: Annual Reports
Auditor’s qualifications and significant notes to accounts
B S R & Co. LLP is the auditor and there was no qualifications/emphasis of matters highlighted
by them in the FY22 Annual Report.

Related Party Transactions and Balances
Related party transactions is stable in the past 2 years even with increased in business.
MHRIL’s Related Party

with holding company 53.2 6.7 6.5 7.2
with subsidiary companies 89.8 48.0 758.3 652.6
Fellow Subsiadiries/ Associates 15.6 12.0 32.3 33.1
Director's Interest 0.0 0.0 0.2 0.2
KMP Remuneration 7.7 8.4 9.2 10.4
Fellow Subsidiaries/Associates 0 80.9 351 635
Other entities under the control of company 0 0 0.5 0
Total Related Party Transactions 166.3 155.9 1,158.1 1,338.5
Related party transactions to sales (%) 18.1 16.0 140.8 139.3
Contingent Liabilities
MHRIL’s contingent liabilities has decreased as compared to its revenue and net worth even
with increase in business.
MHRIL’s Contingent Liabilities

Income Tax Matters 996.0 1,030.0 1,027.0 1,032.0
Service Tax Matters 30.0 34.0 31.0 466.0
Luxury Tax Matters 37.0 67.0 69.0 69.0
Guarantees given for it's subsidiaries 1,269.0 1,123.0 1,461.0 1,565.0
Capital commitment 39.0 46.0 42.0 36.0
Total Contingent Liabilities 2,371.0 2,300.0 2,630.0 3,168.0
Contingent Liabilities to Net Worth (%) 8.0 13.1 7.9 5.6
Contingent Liabilities to Sales (%) 2.6 2.4 3.2 3.3

Management Team
Key Person Designation Details
He is a Founder Director of MHRIL. He holds a Degree in Law from the

Mr Arun Nanda Chairman University of Calcutta, is a fellow member of the ICAI and a fellow member
of the ICSI.
Mr Kavinder Singh MD & CEO He has long term experience in FMCG sector, start up and building
businesses and leading transformational corporate strategy initiatives.
He has three decades of experience across industries including having spent

the last 10 years in various CFO roles with Castrol, BP and Disney India. He
Mr Sujit Viadya CFO has worked in international markets including South East Asia, Middle East
and the UK in several leadership roles spanning across financial control &
reporting, business performance and risk management.
Key Risks & Concerns

• Delay in commissioning of new properties – The delay in commissioning of new
properties and rooms could increase the project/development cost of the property
and the future room inventory may not come in as planned. This may result in loss of
revenue, decline in profitability and customer dissatisfaction.
• Lower occupancy – Hotels are a fixed cost business. This cost could remain unabsorbed
if a new property takes a longer than estimated turnaround time due to lower
occupancy. It will have an adverse impact on the revenue and profitability of the
company.
• Lower than expected economic growth – We are expecting a robust growth in India’s
GDP over the next 20-30 years, which is expected to improve the earnings potential
and disposable income of Indian middle and higher middle class. However, any lag in
economic growth due to macro factor may impact the consumer confidence and
spending, which could impact the Indian hotel industry.

MHRIL’s standalone quarterly and annual performance
Fig in INR Cr (unless specified) FY19 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 FY22 Q1FY23 FY23E FY24E FY25E
Vaccation Ownership Income 315.5 346.7 82.7 84.9 88.8 88.7 345.1 90.4 96.7 102.3 104.0 393.4 108.0 443.0 486.2 537.7
YoY Growth (%) -42.1 9.9 -0.5 9.2 14.0 15.3 17.2 14.0 19.5 12.6 9.8 10.6
Share in revenue (%) 34.4 35.5 46.7 45.7 39.2 38.1 42.0 45.9 40.7 38.3 40.1 40.9 37.5 38.1 38.1 38.0
Annual Subscription Fees 261.4 291.3 75.0 73.4 75.0 69.7 293.0 75.1 76.2 77.8 78.9 307.9 78.6 321.3 352.6 390.0
YoY Growth (%) 20.5 11.4 0.6 0.1 3.8 3.7 13.2 5.1 4.6 4.4 9.8 10.6
Share in revenue (%) 28.5 29.8 42.4 39.5 33.1 29.9 35.6 38.2 32.1 29.1 30.5 32.0 27.3 27.7 27.6 27.6
Resort Income 219.7 228.3 0.0 6.7 44.6 53.1 104.4 15.1 50.8 70.0 56.7 192.6 84.0 326.5 361.9 405.1
YoY Growth (%) 5.1 3.9 -54.3 75,200.0 658.2 57.0 6.9 84.5 457.8 69.5 10.9 11.9
Share in revenue (%) 23.9 23.4 0.0 3.6 19.7 22.8 12.7 7.7 21.4 26.2 21.9 20.0 29.2 28.1 28.4 28.6
Interest Income 121.7 110.7 19.3 20.9 18.2 21.4 79.8 16.3 14.0 17.2 19.5 66.9 17.3 70.5 75.6 81.3
YoY Growth (%) 30.6 -9.0 -28.0 -15.6 -33.0 -5.6 -9.2 -16.2 6.6 5.4 7.3 7.5
Share in revenue (%) 13.3 11.3 9.7 7.0 6.1 5.9 5.7
Revenue from operations 918.3 977.0 177.0 185.8 226.6 232.9 822.3 196.7 237.7 267.3 259.0 960.7 287.9 1,161.2 1,276.3 1,414.1
YoY Growth (%) -13.7 6.4 -15.8 11.1 27.9 18.0 11.2 16.8 46.3 20.9 9.9 10.8
Employee Cost 248.5 272.7 65.9 57.6 58.4 61.1 243.0 62.7 58.2 60.5 67.2 248.6 73.0 284.5 314.0 345.2
Employee Cost to Sales (%) 27.1 27.9 37.2 31.0 25.8 26.2 29.6 31.9 24.5 22.7 25.9 25.9 25.4 24.5 24.6 24.4
Other Expenses 558.3 522.8 65.4 79.6 104.4 130.1 379.6 81.1 118.0 139.0 139.4 477.5 147.0 594.0 645.2 715.3
Other Expenses to Sales (%) 60.8 53.5 36.9 42.9 46.1 55.9 46.2 41.2 49.7 52.0 53.8 49.7 51.1 51.2 50.5 50.6
EBITDA 111.5 181.5 45.7 48.6 63.7 41.7 199.7 52.9 61.4 67.7 52.5 234.5 67.9 282.7 317.2 353.5
EBITDA Margin (%) 12.1 18.6 25.8 26.1 28.1 17.9 24.3 26.9 25.9 25.3 20.3 24.4 23.6 24.3 24.9 25.0
Net Profit 63.9 -108.2 26.8 33.8 40.6 24.6 117.4 30.3 40.6 36.0 44.5 146.3 33.6 137.5 140.7 159.4
Net Margin (%) 7.0 -11.1 15.1 18.2 17.9 10.6 14.3 15.4 17.1 13.5 17.2 15.2 11.7 11.8 11.0 11.3
Adjusted EPS 3.2 -5.4 1.3 1.7 2.0 1.2 5.9 1.5 2.0 1.8 2.2 7.3 1.7 6.9 7.0 8.0
P/E (X) 85.7 -50.6 46.6 37.4 39.8 38.9 34.4
Adjusted BVPS 14.9 8.8 16.7 28.2 32.4 36.6 41.4
P/BV (X) 18.4 31.1 16.4 9.7 8.5 7.5 6.6
Enterprise Value 5,136.8 5,063.8 5,238.3 5,095.4 5,119.6 5,013.3 4,846.0
EV/EBITDA (X) 46.1 27.9 26.2 21.7 18.1 15.8 13.7
Net Worth 296.8 176.2 334.7 564.4 646.9 731.3 826.9

ROE (%) 21.5 -61.4 35.1 25.9 21.2 19.2 19.3
Capital Employed 296.8 363.4 499.4 846.0 967.1 1,106.2 1,259.1
ROCE (%) 12.9 -19.2 14.0 10.0 11.5 11.2 10.9
Invested Capital 537.8 -235.8 97.2 184.0 290.7 268.7 197.1
ROIC (%) 11.2 -33.8 98.7 62.3 51.3 61.8 93.3
ROIIC (%) -53.2 -2.6 4.8 21.6 32.4 -77.0 -24.8
Cash Flow from Operations 300.5 331.0 266.8 356.0 235.1 555.6 637.7
Cash Flow from Investing -235.7 -277.5 -225.9 -261.4 -138.5 -348.5 -362.6
Cash Flow from Financing -62.5 -65.1 -35.9 -57.7 -85.1 -91.1 -103.6
Net Cash Flow 2.4 -11.6 5.0 36.9 11.4 116.0 171.4
Free Cash Flow 153.5 221.1 363.5 229.1 -26.9 225.6 297.7
CFO to EBITDA (%) 269.6 182.4 133.6 151.8 83.1 175.2 180.4
FCF to EBITDA (%) 137.7 121.8 182.1 97.7 -9.5 71.1 84.2
FCF to Net Profit (%) 240.4 -204.3 309.5 156.6 -19.6 160.4 186.8
FCF to Net Worth (%) 51.7 125.5 108.6 40.6 -4.2 30.8 36.0
Total Debt 0.0 187.3 164.7 281.6 320.3 375.0 432.2

Net Debt -339.1 -412.0 -237.5 -380.4 -356.2 -462.5 -629.8
Net Debt to Equity (X) -1.1 -2.3 -0.7 -0.7 -0.6 -0.6 -0.8
Net Debt to EBITDA (X) -3.0 -2.3 -1.2 -1.6 -1.3 -1.5 -1.8
Interest Coverage Ratio (X) 11.9 5.0 4.5 4.4 5.0 4.8 4.6

Summary of management commentary and quarterly performance over last four quarters
Key Criteria Risk Comments
Q2FY22
Consolidated revenue grew at a YoY rate of 13.5% to INR 546.4 cr, while EBITDA
Business Performance Positive and PAT grew at a YoY rate of 26.5% to INR 118.3 cr and 107.9% to INR 59.8 cr
respectively. EBITDA and PAT margins grew by 230bps to 21.7% and 490bps to
10.9% respectively.
The company has achieved industry leading resort occupancies of 73%. Not only
Outlook & Strategy Positive is Q2 in general not a high season for them from an occupancy standpoint, but
the occupancies climbed back to reach pre-pandemic levels.
Q3FY22
and PAT changed at a YoY rate of 8.3% to INR 81 cr and -2040.6% to INR 13.4 cr
Business Performance Positive
respectively. EBITDA margin declined by 700bps to 14.6% and PAT margin grew
by 250bps to 2.4% respectively.
The company added about 580 rooms between Dec’20 to Dec’21. EBITDA is less
Outlook & Strategy Positive since had a reduction in one-off gains from the rent waivers and interest on IT
refunds which is of the order of INR 11 cr.
Q4FY22
Business Performance Neutral and PAT changed at a YoY rate of 98.2% to INR 88 cr and -263% to INR 15.9 cr
respectively. EBITDA and PAT margin grew by 670bps to 16.2% and by 500bps
to 2.9% respectively.
Demand for domestic travel started to gain momentum from mid-February
Outlook & Strategy Positive onwards due to easing of mobility restrictions backed by pent-up demand,
festive travel demand around Holi, and summer travel.
Q1FY23
Business Performance Positive and PAT changed at a YoY rate of 258.3% to INR 99.7 cr and -239% to INR 29.7
cr respectively. EBITDA and PAT margin grew by 900bps to 16.5% and by
1070bps to 4.9% respectively.
1,000 rooms added since Q1 FY2020 at occupancy of 89%, very similar to pre-
Outlook & Strategy Positive pandemic level even though the rooms had expanded by 1,000. A membership
sale remained robust during the quarter despite pressure on consumer
discretionary spends.

MHRIL’s standalone financial analysis & projections
Fig in INR Cr (unless specified) FY21 FY22 FY23E FY24E FY25E Fig in INR Cr (unless specified) FY21 FY22 FY23E FY24E FY25E
Income Statement Per share data & Yields
Revenue 822.3 960.7 1,161.2 1,276.3 1,414.1 Adjusted EPS (INR) 5.9 7.3 6.9 7.0 8.0
YoY Growth (%) -15.8 16.8 20.9 9.9 10.8 Adjusted Cash EPS (INR) 11.1 13.3 13.6 14.6 16.5
Employee Cost 243.0 248.6 284.5 314.0 345.2 Adjusted BVPS (INR) 16.7 28.2 32.4 36.6 41.4
Employee Cost to Sales (%) 29.6 25.9 24.5 24.6 24.4 Adjusted CFO per share (INR) 13.3 17.8 11.8 27.8 31.9
Other Expenses 379.6 477.5 594.0 645.2 715.3 CFO Yield (%) 4.9 6.5 4.3 10.1 11.6
Other Exp to Sales (%) 46.2 49.7 51.2 50.5 50.6 Adjusted FCF per share (INR) 18.2 11.5 -1.3 11.3 14.9
EBITDA 199.7 234.5 282.7 317.2 353.5 FCF Yield (%) 6.6 4.2 -0.5 4.1 5.4
Margin (%) 24.3 24.4 24.3 24.9 25.0
YoY Growth (%) 10.0 17.5 20.5 12.2 11.5 Solvency Ratio (X)
Depreciation & Amortization 103.7 119.9 133.5 151.1 169.7 Total Debt to Equity 0.5 0.5 0.5 0.5 0.5
EBIT 95.9 114.6 149.2 166.1 183.9 Net Debt to Equity -0.7 -0.7 -0.6 -0.6 -0.8
Margin (%) 11.7 11.9 12.9 13.0 13.0 Net Debt to EBITDA -1.2 -1.6 -1.3 -1.5 -1.8
YoY Growth (%) 20.1 19.5 30.2 11.3 10.7
Other Income 86.5 110.0 65.2 56.7 69.0 Return Ratios (%)
Finance Cost 21.3 26.2 30.1 34.9 39.9 Return on Equity 35.1 25.9 21.2 19.2 19.3
Interest Coverage (X) 4.5 4.4 5.0 4.8 4.6 Return on Capital Employed 14.0 10.0 11.5 11.2 10.9
Exceptional Item 0.0 0.0 0.0 0.0 0.0 Return on Invested Capital 98.7 62.3 51.3 61.8 93.3
PBT 161.1 198.5 184.2 188.0 213.0
Margin (%) 19.6 20.7 15.9 14.7 15.1 Working Capital Ratios
YoY Growth (%) 30.0 23.2 -7.2 2.0 13.3 Payable Days (Nos) 87 83 70 60 60
Tax Expense 43.7 52.2 46.8 47.3 53.6 Inventory Days (Nos) 2 2 2 2 2
Tax Rate (%) 27.1 26.3 25.4 25.2 25.2 Receivable Days (Nos) 406 345 350 350 350
PAT 117.4 146.3 137.5 140.7 159.4 Net Working Capital Days (Nos) 322 264 282 292 292
Margin (%) 14.3 15.2 11.8 11.0 11.3 Net Working Capital to Sales (%) 88.1 72.4 77.3 80.0 80.0
YoY Growth (%) -208.5 24.5 -6.0 2.3 13.3
Min Int/Sh of Assoc 0.0 0.0 0.0 0.0 0.0 Valuation (X)
Net Profit 117.4 146.3 137.5 140.7 159.4 P/E 46.6 37.4 39.8 38.9 34.4
Margin (%) 14.3 15.2 11.8 11.0 11.3 P/BV 16.4 9.7 8.5 7.5 6.6
YoY Growth (%) -208.5 24.5 -6.0 2.3 13.3 EV/EBITDA 26.2 21.7 18.1 15.8 13.7
EV/Sales 6.4 5.3 4.4 3.9 3.4
Balance Sheet
Share Capital 132.9 199.8 199.8 199.8 199.8 Cash Flow Statement
Total Reserves 201.8 364.5 447.0 531.4 627.0 PBT 161.1 198.5 184.2 188.0 213.0
Shareholders Fund 334.7 564.4 646.9 731.3 826.9 Adjustments -140.7 181.0 299.2 538.8 588.5
Long Term Borrowings 0.0 0.0 0.0 0.0 0.0 Change in Working Capital 290.0 28.7 -201.6 -123.9 -110.2
Deferred Tax Assets / Liabilities -236.4 -193.1 -210.1 -232.5 -257.3 Less: Tax Paid -43.7 -52.2 -46.8 -47.3 -53.6
Other Long Term Liabilities 7.9 8.5 9.4 9.9 10.4 Cash Flow from Operations 266.8 356.0 235.1 555.6 637.7
Long Term Trade Payables 0.0 0.0 0.0 0.0 0.0 Net Capital Expenditure -100.1 -126.8 -262.0 -330.0 -340.0
Long Term Provisions 8.0 8.5 9.7 10.7 11.7 Change in Investments -125.8 -134.6 123.5 -18.5 -22.6
Total Liabilities 114.2 388.2 455.8 519.3 591.7 Cash Flow from Investing -225.9 -261.4 -138.5 -348.5 -362.6
Net Block 2,021.6 2,177.4 2,306.0 2,484.9 2,655.2 Change in Borrowings -14.6 -38.0 0.0 0.0 0.0
Capital Work in Progress 111.8 107.4 0.0 0.0 0.0 Less: Finance Cost -21.3 -26.2 -30.1 -34.9 -39.9
Intangible assets under development 9.4 7.1 0.0 0.0 0.0 Proceeds from Equity 0.0 6.5 0.0 0.0 0.0
Non Current Investments 102.3 101.1 122.2 134.4 148.9 Dividend Paid 0.0 0.0 -55.0 -56.3 -63.7
Long Term Loans & Advances 221.9 446.4 539.6 593.1 657.1 Cash flow from Financing -35.9 -57.7 -85.1 -91.1 -103.6
Other Non Current Assets 418.7 480.6 581.0 638.6 707.5 Net Cash Flow 5.0 36.9 11.4 116.0 171.4
Net Current Assets -2,771.6 -2,932.0 -3,092.9 -3,331.6 -3,576.9 Opening Balance of Cash 14.6 19.6 56.5 67.9 183.9
Total Assets 114.2 388.2 455.8 519.3 591.7 Closing Balance of Cash 19.6 56.5 67.9 183.9 355.3

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author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or
projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions,
estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or
any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors
or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts
any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein
is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this
communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives
Segments” as prescribed by Securities and Exchange Board of India before investing in Securities Market.
Ventura Securities Limited - SEBI Registration No.: INH000001634
Corporate Office: I-Think Techno Campus, 8th Floor, ‘B’ Wing, Off Pokhran Road No 2, Eastern Express Highway, Thane (W) – 400608

15102022022359mahindra Holidays & Resorts India LTD

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15102022022359mahindra Holidays & Resorts India LTD

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Mahindra Holidays &

Resorts India Ltd

Valuation and Peer Comparison 04

Financial Summary & Story in Charts 11

Sector Tailwinds & Growth Drivers 28

Business Quality Score 39

Annual Report Takeaways 40

Key Management Personnel 43

Risk & Concerns 43

Summary of Management Commentary on Quarterly Performance 45

Financial Statement Analysis & Projections 46

Our recent initiating coverage reports

Timeshare to long-term wealth creation

Key Standalone Financial Data (INR Cr, unless specified)

SOTP valuation for MHRIL

MHRIL: Consensus vs Ventura estimates

4% terminal value growth, annual addition of 311

3% terminal value growth, annual addition of 250

Source: BSE & Ventura Research

Risk to our price target

1 year forward P/E P/E standard deviation

Source: Ventura Research

Mahindra Holidays &

Growth Drivers Key Challenges New Trends Investment Themes

MHRIL takes membership

Hotel is a fixed cost model and

MHRIL's India business is

Domestic Peers (fig in INR cr, unless specified)

13 Though the margins are comparatively

been stable during the turbulent time of

Source: Ventura Research, ACE Equity & Bloomberg

10 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

FY19-22: Maintained consistency in performance during the pandemic

MHRIL unit cost analysis for FY19 and FY22

Data in INR Data in INR

(27.1%) (25.9%) (24.4%)

Source: Company Reports

11 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

FY22-25E: Expansion in room inventory and member additions to drive financial

12 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

Source: Ventura Research

13 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

Source: Company Reports & Ventura Research

14 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

1,500 YoY Growth (%) 30 100

Improvement in profits to sustain operating Return ratios to follow operating performance

800 400 1,000 80

Source: Company Reports & Ventura Research

15 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

MHRIL business structure

Annual Subscription Fees

Resort Income Interest Income

Source: Company Reports & Ventura Research

16 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

17 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

18 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

Club Mahindra resort network

Source: Company Reports

Holiday Club Resorts Oy – A wholly owned subsidiary, which is dragging the

19 | P a g e ( 1 5 t h O c t 2 0 2 2 ) For any further query, please email us on research@ventura1.com

HCRO financial summary and performance

Net Debt 27.8 25.1 19.6 25.9 21.5

RoE (%) 9.4 0.7 0.0 -21.4 -11.0