Overview of the Bharat Hotels
(i) They are one of the leading privately-owned domestic hotel brands in India, according to the CRISIL Report, engaged in the business of operating and managing hotels, palaces, and resorts, with a focus on the luxury segment. As at March 31, 2018, they operated 12 luxury hotels, palaces and resorts under The Lalit brand and two mid-market segment hotels under The Lalit Traveller brand across India‘s key business and leisure travel destinations, offering 2,261 rooms.
(ii) In addition, they hold the exclusive rights to provide management consultancy services in connection with the operation and management of a hotel in London, The Lalit London, which offered 70 rooms as of March 31, 2018.
(iii) The luxury hotels operating across India under The Lalit brand are grouped into the following three categories:
a) City hotels: The LaLiT New Delhi, The LaLiT Mumbai, The LaLiT Ashok Bangalore, The LaLiT Great Eastern Kolkata, The LaLiT Jaipur, and The LaLiT Chandigarh.
b) Palaces: The Lalit Laxmi Vilas Palace Udaipur and The LaLiT Grand Palace Srinagar.
c) Resorts: The LaLiT Golf & Spa Resort Goa, The LaLiT Resort & Spa Bekal (Kerala), The LaLiT Mangar, and The LaLiT Temple View Khajuraho.
Future Plans of Bharat Hotels
(i) Going forward, they intend to develop three new hotels under The LaLiT brand in Ahmedabad, Mangalore, and Dehradun which will, in aggregate, offer 290 rooms and 115 cottages, when completed.
(ii) They also intend to develop 50 additional rooms at The LaLiT Laxmi Vilas Palace Udaipur.
(iii) They also operate two hotels in the mid-market segment under The LaLiT Traveller brand, which are The LaLiT Traveller Jaipur and The LaLiT Traveller Khajuraho. They intend to develop four new hotels under The LaLiT
Traveller brand in Ahmedabad, Pune, Amritsar, and Chitrakoot which will, in the aggregate, offer 308 rooms, when completed.
(iv) Further, in the F&B segment, they operate 45 restaurants, bars, and bakery outlets as of March 31, 2018, across our hotels in India. They have developed their own brands, such as 24/7, Baluchi, OKO, The LaLiT Boulangerie, Kitty Su, and The LaLiT Food Truck Company.
Business Performance Bharat Hotel FY19-20
1. The Lalit Suri Hospitality Group was recording a steady growth in its revenues in the last financial year until the
set-back in the last quarter from January 2020 onwards due to the COVID-19 pandemic. Because of almost negligible business from January onwards, Bharat Hotel came in the loss in FY19-20.
2. Due to COVID-19, the hospitality sector was affected quite badly. With social distancing, quarantine measures, travel bans, etc., it is expected that hospitality will take a longer time to revive. Plus the fixed cost is the same as before and with revenue declining, Bharat Hotel has faced liquidity issues in the business.
3. In order to increase the revenue during the lockdown, some of the hotels have accommodated doctors on COVID 19 duty at hospitals at fixed rates to be paid by the Government. Apart from this, Bharat Hotel has also started home delivery of bakery, confectionery, and gourmet hampers. The Company is also exploring possibilities of digital channels to make more products and services available to guests like Ayurveda doctor consultancy, wellness packages, chef at home, bartender at home, Kitty comes home, industrial catering.
Business and Operation performance of Bharat Hotel in FY20-21
1. Bharat Hotel Unlisted Share has recorded unprecedented decline in revenue and losses on both standalone and consolidated basis during the last financial year amid the COVID-19 crisis. The business operations of the Company were severely disrupted during the first-half of last year due to lockdown, travel restrictions and other control measures implemented by the Government to contain the spread of the pandemic.
2. During this period some of the hotels were accommodating doctors on COVID-19 duty at fixed rates paid by the Government. The hotels pan-India could not fully operationalise even by the end of year 2020 and witnessed huge reduction in their operating cashflows that has put abrupt pressure on liquidity levels of the Company.
3. Bharat Hotel had put up a strong impetus on cost optimization by reviewing all expenses to ensure only the very critical expenses were incurred; the Company has been able to generate a positive EBIDTA despite substantial reduction in the revenue.
4. Several strategic initiatives have been taken to reinstate the business including consolidation of various units of the Company and discontinuation of unprofitable or onerous operations. To better manage its liquidity position, the Company has restructured its existing borrowings from various banks under the RBI guidelines on “Resolution Framework for COVID-19 related Stress”.
5. The revenue of Bharat Hotel declined from 729 Crores in FY20 to 172 Crores in FY21.
6. Bharat Hotel has incurred a loss of ~90 Crores in FY20-21.
Business and Operational Performance of Bharat Hotel in Fy22-23
Bharat Hotels Limited (BHL), a prominent player in the Indian hospitality sector, has recently released its annual financial report for the fiscal year 2022-23. The report reveals a compelling narrative of remarkable financial recovery and growth, following a challenging period due to the COVID-19 pandemic. In this blog, we will dissect the key highlights from the annual report and what they signify for investors evaluating BHL’s prospects.
Financial Performance Highlights
A Surge in Revenue
The first thing that stands out from the report is the phenomenal revenue growth. BHL recorded a 117% increase in its revenue from operations, climbing to Rs. 800 crore in FY 2022-23 from Rs. 369 crore in FY 2021-22. This surge can be attributed to the successful vaccination drive, reopening of international borders, and the overall economic growth in the country.
A Closer Look at Expenses and Profits
While total expenses also increased by 88% to Rs. 444 crore, the rise is considerably less than the revenue growth, indicating improved operational efficiency. More impressively, BHL’s EBITDA soared by 162% to Rs. 364 crore, showcasing an enhanced ability to generate income from its operations.
Profit Before Tax (PBT) and Net Profit also displayed significant improvements. PBT registered a 230% increase, reaching Rs. 134 crore, turning around from a loss of Rs. (103) crore in the previous fiscal. Net Profit rose to Rs. 50 crore, marking a 129% increase and recovering from a loss of Rs. (59) crore in FY 2021-22.
Cash Flow Insights
Strong cash flow management is crucial for any business, and BHL appears to have excelled in this area. The company generated robust net cash from operating activities, reaching Rs. 317 crore, an increase from Rs. 136 crore in the previous year. BHL also showed positive trends in cash flow from investing activities and improved cash flow from financial activities.
Strategic Financial Moves
During FY 2022-23, BHL issued 1,10,000 Non-Convertible Debentures to repay existing debt. This move not only helped the company clear its loans but also signaled strong financial management to potential investors.
The Bigger Picture
Founded in 1981 by Lalit Suri, BHL has been a leader in the Indian hospitality industry. Its portfolio includes premium properties such as The Lalit New Delhi, The Lalit Mumbai, and The Lalit Jaipur. The financials for FY 2022-23 indicate that the company has not only weathered the storm of the COVID-19 pandemic but is also well-positioned for future growth.
Conclusion
Bharat Hotels Limited’s financial performance for FY 2022-23 reveals a success story of resilience and strategic financial management. The company has managed to turn the tide with impressive revenue growth, profitability, and cash flow management.
For those looking to invest in the hospitality sector, BHL’s recent financial performance offers compelling evidence of a company on the rise, making it a candidate worthy of consideration.
Total Available Shares: | 500 |
Face Value: | ₹ 10 Per Equity Share |
ISIN: | INE466A01015 |
Lot Size: | 100 Shares |
Current Unlisted Share Price: | ₹ 245 Per Equity Share |
Deeksha Holding Limited | 40.42% |
Mr. Jayant Nanda | 26.32% |
Dr. Jyotsna Suri | 9.55% |
Responsible Holding Private Limited | 9.35% |
Mr. Keshav Suri | 5.11% |
Sr.no | 2018 | 2017 | 2016 | 2015 | 2014 |
Number of available rooms | 2261 | 2206 | 2207 | 2207 | 2046 |
Number of hotels | 14 | 13 | 13 | 13 | 12 |
ARR (₹) | 6388 | 6306 | 6320 | 6613 | 7346 |
Average Occupancy Rate (%) | 62 | 55 | 51 | 45 | 38 |
Average RevPAR (₹) | 3974 | 3494 | 3200 | 2973 | 2813 |
Average TRevPAR (₹) | 9143 | 8256 | 7679 | 6949 | 6461 |
Average expense per room (₹ million) | 2.35 | 2.13 | 2.01 | 1.86 | 1.77 |
Average staff per room ratio | 1.69 | 1.68 | 1.66 | 1.57 | 1.69 |
EBITDA (₹ million) | 2242 | 1954 | 1777 | 1227 | 781 |
EBITDA margin (%) | 29.71% | 29.42% | 28.66% | 23.04% | 17.78% |
Year | Revenue | EBITDA | OPM | PAT | NPM | Shares | F.V. | EPS |
2016 | 586 | 163 | 28% | -40 | -7% | 7.60 | 10 | -5.37 |
2017 | 629 | 191 | 30% | -16 | -3% | 7.60 | 10 | -2.15 |
2018 | 754 | 224 | 30% | 83 | 11% | 7.60 | 10 | 11.04 |
2019 | 811 | 250 | 31% | 28 | 4% | 7.60 | 10 | 3.74 |
2020 | 729 | 221 | 30% | -73 | -10% | 7.60 | 10 | -9 |
2021 | 172 | 29 | 17% | -91 | -53% | 7.60 | 10 | -10.11 |
2022 | 316 | 116 | 36% | -58 | -18% | 7.60 | 10 | -7.76 |
2023 | 800 | 364 | 45.50% | 49 | 6.06% | 7.6 | 10 | 6.46 |
Year | Debt | NW | D/E | CR | CFO | Capex | FCF |
2016 | 1116 | 963 | 1.16 | 0.58 | 140 | 60 | 79 |
2017 | 1247 | 940 | 1.33 | 0.78 | 188 | 72 | 116 |
2018 | 1365 | 962 | 1.42 | 0.41 | 218 | 115 | 102 |
2019 | 1333 | 983 | 1.36 | 0.38 | 237 | 75 | 162 |
2020 | 1348 | 869 | 0.64 | 0.60 | 245 | 40 | 205 |
2021 | 1435 | 848 | 1.69 | 0.57 | 119 | 8 | 111 |
2022 | 1539 | 727 | 1.91 | 0.91 | 136 | 9 | 127 |
2023 | 1347 | 775 | 1.74 | 0.96 | 317 | 18 | 299 |
Particulars (Cr) | Lemon Tree | Bharat Hotel |
Revenue | 875 | 800 |
Revenue Growth in 5 years | 13% | 1.19% |
EBITDA | 448 | 364 |
PAT | 141 | 49 |
Share Price | 108 | 194 |
MCap | 8536 | 1472 |
EV | 10686 | 2769 |
EV/EBITDA | 23 | 7.6 |
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Umesh Paliwal
An Overview of Bharat Hotels Limited’s Land License Dispute with NDMC”
Land License: The company obtained a 99-year land license from New Delhi Municipal Corporation (NDMC) starting from March 11, 1981.
Construction: A hotel and two commercial towers were built on this land.
Initial License Fee: The company was obligated to pay an annual license fee of INR 1.45 for the first 33 years. This fee was subject to revision based on market value, with a maximum increase cap of 100%.
No Increase by NDMC: Upon the expiry of the initial 33-year term, NDMC did not revise the license fee.
Demand Notice: In February 2020, the company received a demand notice from NDMC for INR 1063 Cr claiming arrears of increased license fees, interest, and service tax.
Legal Action: The company filed a writ petition in the Delhi High Court. NDMC has agreed not to take any coercive action during the legal proceedings.
Court Directive: The court ordered the company to pay a license fee of INR 290 lacs (calculated at a 100% increase on the immediately preceding license fee) effective from the year 2014, along with interest aggregating to INR 1,000.00 lacs. This has been paid and recorded in the company’s standalone financial statement.
Legal Advice: Management believes, based on legal advice, that no additional liability will be incurred in this matter, which is currently at the final arguments stage.
aditayajasrotia
is this company listed….as ipo permission was given in 2018
Umesh Paliwal
Not yet listed.
Market Wizard
Bharat Hotel AGM on 27.08.2019.
Market Wizard
History of Dividends
1. 2015-16= The Board has recommended a dividend of 7.5% per share i.e. Rs.0.75 per equity share of Rs. 10/- each.
2. 2016-17= The Board has recommended a dividend of 10% per share i.e. Rs.1.00 per equity share of Rs. 10/- each.
3. 2017-18= The Board has recommended a dividend of 10% per share i.e. Rs. 1 (Previous Year: Rs. 1) per equity share of Rs. 10/- each
UZAdmin
Bharat Hotels and Sphoorty Financial Received SEBI Approval:
Bharat Hotels, which runs five-star properties under The LaLiT brand, and micro-finance lender Spandana Sphoorty Financial have received the Securities and Exchange Board of India nod for IPO. With this, the total number of companies getting SEBI approval for initial share sale has reached 60 so far this year.
Bharat Hotels and Spandana Sphoorty had obtained the regulator’s “observations” on October 12. Both the companies had approached SEBI in June with their respective IPO papers. The capital market regulator’s observations are necessary for any company to launch public issues like initial public offer (IPO), follow-on public offer (FPO) and rights issue.
Going by the draft papers, Bharat Hotels’ IPO comprises the sale of fresh equity shares to the tune of Rs 1,200 crore. Proceeds of the issue will be utilized towards repayment of certain loans availed by the company and for other general corporate purposes. HDFC Bank Ltd, Edelweiss Financial Services, and YES Securities (India) will manage the company’s public issue.
As of March 2018, the company had operated 12 luxury hotels, palaces and resorts under The LaLiT brand and two mid-market segment hotels under The LaLiT Traveller brand across the country’s key businesses and leisure travel destinations.
Spandana Sphoorty IPO consists of fresh issue of shares worth up to Rs 400 crore, and an offer for sale of up to 13,146,595 equity stocks by existing shareholders, including Kedaara Capital Alternative Investment, Helion Venture Partners and Valiant Mauritius Partners, as per the draft papers.
Net proceeds of the fresh issue will be utilized for augmenting capital base and general corporate purposes. Axis Capital, ICICI Securities, IIFL Holdings, and JM Financial are the book running lead managers to the issue.
UZAdmin
A) The following table sets forth a comparison of operating performance across India for the fiscal year 2016:
Parameter —Avg. Across India’s four-star hotels—-Avg. Across India’s three—–Avg. Across India’s two star
(i) Occupancy (%)— 63.4—————————————— 61.7—————————————– 61.4
(ii) ADR (₹) ————– 4,173 —————————————3,023————————————– 2,058
(iii) RevPAR (₹) ————-2,646 ———————————–1,865 —————————————–1,264
B) The following table sets forth the revenue composition of the average of all chain-affiliated hotels across India for the fiscal the year 2016:
Hotel Category ———-Four-star hotels (%) —————-Three-star hotels (%) ———Two-star hotels (%)
(i) Rooms ————————–54.2 ————————————–50.8————————————- 53.0
(ii) Food and Beverages ——–40.7 —————————————43.6————————————– 42.2
(iii) Banquets———————- 13.7 —————————————9.6—————————————— 6.7
UZAdmin
Hotel Industry Analysis, Key Barriers and Future Prospect
(i) Market size of the organized and branded hotels industry!!!
a) CRISIL estimates the market size of the organized Indian hospitality industry comprising of only starred hotels to be approximately ₹ 55000 Cr during Fiscal 2018.
b) The industry has expanded at a CAGR of approximately 13.00% over the last four years between Fiscals 2014 and 2018.
(ii) Luxury hotel industry to grow at a CAGR of approximately 10.50-11.50% between Fiscals 2019 and 2022.
(iii) RevPAR for mid-market hotels to grow at a CAGR of approximately 5.00%
(iv) Key barriers to entry in the Indian hotel industry
The hotel industry faces several challenges to entry at key locations, principal among which include the availability of land, regulatory approvals, project delays and capital-intensive nature of the industry, as well as the availability of skilled manpower.
(Source: CRISIL Report.)
UZAdmin
The LaLiT New Delhi and The LaLiT Mumbai have historically contributed a significant proportion to the EBITDA. The LaLiT New Delhi and The LaLiT Mumbai together accounted for approximately 66.62%, 66.09% and 58.25% of our EBITDA during Fiscals 2018, 2017 and 2016.
UZAdmin
How to value Hotel Companies:
(i) Occupancy Rates.- The occupancy rate at a hotel is the number of available rooms that are occupied over a period of time.
(ii) ARR– It is a hotel KPI which measures the average rate per available room – similarly to ADR. Both of them can be used for the same purpose which is to calculate the average rate of the room.
(iii) RevPAR.- It is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. It may also be calculated by dividing a hotel’s total room revenue by the total number of available rooms in the period being measured.
(iv) TRevPAR– total revenue per available room, is a performance metric in the hotel industry. … TRevPAR is the preferred metric for accountants and hotel owners because it effectively determines the overall financial performance of a property, while RevPAR only takes into account revenue from rooms.
UZAdmin
The consolidated revenue of Bharat Hotel is 737 Cr and the consolidated EPS stands at 9.88. The recently listed Lemon tree is having a Revenue of 484 Cr with an EPS of 0.18. The Lemon tree is available at staggering P/E of 417. However, the hotel industry is not valued in terms of P/E but rather based on Average Revenue per Room, and the value of the property the hotel chain own.
UZAdmin
Experts from Annual Report 2018
(i) The Board has recommended a dividend of 10% per share i.e. Rs. 1 (Previous Year: Rs. 1) per equity share of Rs. 10/- each.
(ii) The Company has clocked a Revenue of 645 Cr in FY18 as compared to 538 Cr last year showing growth of 20%.
(iii) The Company has issued ESOPs at Rs. 383 in FY18.
UZAdmin
Bharat Hotels was started in 1981 by the Founder Chairman Lalit Suri and his wife Jyotsna Suri through bank loan and personal savings. Coming from a family of entrepreneurs, Jyotsna always wanted to do something which would take the country forward and also caters to people. Initially they had a franchise with international chains like Holiday Inn, Hilton and Inter Continental. It was in 2008 when the group carved out a new identity and rebranded all hotels in the name of its Founder Chairman, Lalit Suri.
On charting a new vision of the group, Jyotsna says, “Though I was working as the Joint Managing Director, it was daunting to step in Lalit’s shoes. I had to establish my credibility internally and with the external world as well. The major transition came when we rebranded the company as Lalit. Carving a new identity for an already existing brand with fresh ideologies was most challenging.” Describing itself as traditionally modern, subtly luxurious and distinct, the Lalit Suri hospitality Group is India’s largest privately owned hotel chain.
Talking about her next big goal, she shares, “Right now, I am focused on opening of The Lalit Ahmedabad. We also plan to open more hotels in mid segment.” The group believes in developing destinations and not just hotels’. Therefore, its initiatives involve the local population, their handicrafts, culture and food.
UZAdmin
Average Revenue Per Room of Lemon Tree the listed entity is:
1) Mid Scale = Rs. 2716 against an Industry Average of 1835
2) Upper Mid Scale=Rs. 3075 against an Industry Average of 2863
3) Economy Class=Rs. 1877 against an Industry Average of 1454