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Royal Orchid Hotels stock slumps 4.5% on estimates of major impact due to Covid-19 restrictions

The company is confident about adapting to the changing business environment and respond suitably to fulfill the needs of its customers.

June 25, 2020 9:20 IST | India Infoline News Service
ROYAL ORCHID HOTELS
Lockdowns and restrictions imposed on various activities due to Covid-19 pandemic have posed challenges to all the businesses of Royal Orchid Hotels Limited and its Subsidiaries.

The company informed the exchanges Wednesday that the lockdown guidelines issued by Central and State governments mandated closure of hotel operations and cessation of air traffic and other forms of public transport. This has resulted in low occupancies and shutdowns of our hotels pan India.

Royal Orchid Hotels Ltd is currently trading at Rs52.80 down by Rs2.5 or 4.52% from its previous closing of Rs55.30 on the BSE.

“All our hotels were operating at minimum occupancies with minimum cost except for some managed properties which were shut down due to the government restrictions put in place by various state governments,” company said.

The company believes this will be impact in sales volumes, revenue, and profitability for Q1 and Q2 FY21 as our operations are presently shut in most geographies and will gradually ramp up only after the resolution of the pandemic.

However, the company is confident about adapting to the changing business environment and respond suitably to fulfill the needs of its customers.

Considering the faith in our Brand, the company does not foresee any challenge in assuming its position soon. However, revenues are expected to be softer in the initial phase of the lockdown and for some time after the lifting of the lockdown mainly due to lower occupancies & limited F & B off take arising out of reduced business and leisure travel.

Regional sales offices were also shut, but the company adopted the work from home policy for some of the employees during the entire duration of the lockdown until the pandemic subsides as a precautionary measure.

The company is also in constant touch with its key vendors and is working with them to mutually partner each other to propel the business forward.

Based on the experience from markets in China and its own research, the company expects a recovery in business to be driven by domestic tourism, staycations, domestic business travel and a limited international travel. Our Brands have tremendous Trust with our customers, and we have very clear SOP’s for ensuring a health & safe stay for our Guests.

“We continue to be focused in operating to ensure the health & safety of our Guests and employees. Further, we are committed to protect the interest of all our stakeholders,” company said.

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