Lemon Tree Hotels Ltd posts consolidated net profit of Rs5.67cr in Q2FY19 vs. net loss of Rs3.69cr in Q2FY18 : Beats Estimates

The company’s consolidated revenue stood at Rs128.69cr, up 15.35% yoy and 0.64% qoq.

Nov 13, 2018 02:11 IST India Infoline Research Team

Lemon Tree Hotels Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 128.69 15.4
EBITDA 36.02 26.4
EBITDA Margin (%) 28 244
Net Profit (adjusted) 5.67 -
***EBITDA margin change is bps
Lemon Tree Hotels Ltd's consolidated revenue for the quarter came in at Rs128.7cr, up by 15.4% yoy. The operating profit for the quarter increased by 26.4% yoy to Rs36cr. EBITDA margin increased by ~244bps yoy to 28% in Q2FY19. The adjusted net profit after tax (attributable to owners) stood at Rs5.7cr in Q2FY19 vs. net loss of Rs3.7cr in Q2FY18. The revenue and EBITDA are in-line with consensus estimates. However, net profit beat the consensus estimate of Rs4.1cr by 38%.

• Rise in revenue is on account of increase in average room rent (ARR) by 9% yoy and incremental occupancy growth of ~230bps. This resulted into revenue per available room (RevPAR) growth of 12% yoy.
• The available room inventory has increased to 4,999 rooms as on September 30, 2018 as against 4,871 rooms as on March 31, 2018. The inventory addition during the quarter is under managed rooms segment. The new inventory addition resulted into ~3% increase in the revenue.
• The ARR has increased by 9% yoy to Rs3,939 during the quarter. The occupancy stood at 78.3%, a rise by ~230bps yoy during the quarter.
• The rising RevPAR provided operating leverage to the company during the quarter, leading to significant jump in EBITDA by 26.4% yoy. EBITDA margin expanded by ~244bps due to the above factors.
• Total expenses increased by 11% yoy in Q2FY19. Out of this, 2.3% increase was on account of new inventory and 3.5% increase is due to change in business mix.
• Cash profit during the quarter increased by ~132% yoy to Rs19.7cr.
• Operational portfolio of the company as on September 30, 2018 comprised of 50 hotels and 4,999 rooms: 2,796 owned, 481 leased and 1,721 managed.
• In terms of seasonality, second quarter for the company usually contributes 23% and 20% to the total revenue and EBITDA during the financial year.
• The company has a pipeline for hotels under development of 1,434 rooms with an estimated cost of Rs1,725cr as on September 30, 2018. Total capex already incurred as on September 30, 2018 is Rs992cr.
• The company has a pipeline of 2,074 rooms under management contract as on November 5, 2018.

Technical View:

Lemon Tree Hotels Ltd is currently trading at Rs. 69.05, down by 0.75 points or 1.07% from its previous closing of Rs. 69.80 on the BSE.
The scrip opened at Rs. 68.95 and has touched a high and low of Rs. 70.55 and Rs. 68.95 respectively. So far 1,43,905 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.

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