Apollo Sindoori Hotels Ltd Management Discussions.


The statements in the "Management Discussion and Analysis Report" describe the Companys objectives, projections, expectations, estimates or forecasts which may be "forward-looking statements" within the meaning of the applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied therein due to risks and uncertainties.

Important factors that could influence the Companys operations, inter alia, include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic, political developments within the country and other factors such as litigations and industrial relations.


The unprecedented COVID-19 outbreak has significantly impacted economies across the globe and India is no exception. With the strict lockdown imposed at the beginning of the Financial Year 2020-21, demand and supply were disrupted in India. However, the impact of the lockdown and economic disruption was different in different sectors.

Clinical nutrition and food & Beverage services, the sector in which your Company operates, was classified under essential goods and services and operations were allowed during the lockdown.

At your Company, the management and the employees worked with effective co-ordination and agility to adjust to the changing and the evolving situation. The Company also efficiently leveraged technology for seamless interactions and conducted business through virtual meetings with multiple stakeholders including distributors, vendors, dealers.



Indias Gross Domestic Product (GDP) contracted 7.3% in 2020-21, as per provisional National Income estimates released by the National Statistical Office on Monday, marginally better than the 8% contraction in the economy projected earlier. GDP growth in 2019-20, prior to the COVID-19 pandemic, was 4%

The GVA in Indias economy shrank 6.2% in 2020-21, compared to a 4.1% rise in the previous year. Only two sectors bucked the trend of negative GVA growth - Agriculture, Forestry and Fishing (which rose 3.6%) and Electricity, Gas, Water Supply and other Utility Services (up 1.9%).

GVA from Trade, Hotels, Transport, Communication and Broadcasting-related services recorded the sharpest decline of 18.2%, followed by Construction (-8.6%), Mining and quarrying (-8.5%) and Manufacturing (-7.2%).

GDP had contracted 24.4% in the April to June 2020 quarter, followed by a 7.4% shrinkage in the second quarter. It had returned to positive territory in the September to December quarter with a marginal 0.5% growth.

The National Statistical Office attributed the improvement over its earlier growth estimates, to the improved performance of indicators, used in compilation of GVA, in the fourth quarter of 2020-21, owing to calibrated and steady opening of the economy.

Economic scenario

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Market size

Indias real gross domestic product (GDP) at current prices stood at Rs. 135.13 lakh crore in FY21, as per the provisional estimates of annual national income for 2020-21.

According to data from the RBI, as of the week ended on June 04, 2021, the foreign exchange reserves in India increased by US$ 6.842 billion to reach US$ 605 billion.


The RBI has projected the CPI inflation at 5.7 per cent during 2021-22 — 5.9 per cent in the second quarter, 5.3 in the third and 5.8 in the fourth, with risks broadly balanced. CPI inflation for Q1 in 2022-23 is projected at 5.1 per cent.

Interest rates

India Short Term Interest Rate: Month End: India: MIBOR: 3 Months was reported at 3.79 % pa in Jul 2021, compared with 3.81 % pa in the previous month. India Short Term Interest Rate data is updated monthly, available from Dec 1998 to Jul 2021. The data reached an all-time high of 12.67 % pa in Aug 2000 and a record low of 3.66 % pa in Nov 2020. Short Term Interest Rate is reported by reported by CEIC Data. Mumbai Interbank Outright Rate prior to August 2015 is sourced from the National Stock Exchange of India Limited.

In the latest reports, India Government Securities Yield: 10 Years was reported at 6.38 % pa in Mar 2021. The cash rate (Policy Rate: Month End: Repo Rate) was set at 4.00 % pa in Apr 2021. India Exchange Rate against USD averaged 72.82 (INR/USD) in Mar 2021. Its Real Effective Exchange Rate was 114.64 in Jul 2021.

Financial markets

In May 2021, the mutual fund (MF) industrys assets under management (AUM) amounted to 3,305,660 crore (US$ 454.12 billion). The total number of accounts stood at 100.4 million. In May 2021, the mutual fund industry crossed over 10 crore folios. Inflow in Indias mutual fund schemes via systematic investment plan (SIP) were Rs. 96,080 crore (US$ 13.12 billion) in FY21. Equity mutual funds registered a net inflow of Rs. 8.04 trillion (Us$ 114.06 billion) by end of December 2019.

Another crucial component of Indias financial industry is the insurance industry. Insurance industry has been expanding at a fast pace. The total first year premium of life insurance companies reached Rs. 2.59 lakh crore (US$ 36.73 billion) in FY20.

Furthermore, Indias leading bourse, Bombay Stock Exchange (BSE), will set up a joint venture with Ebix Inc to build a robust insurance distribution network in the country through a new distribution exchange platform.

In FY21, US$ 4.25 billion was raised across 55 initial public offerings (IPOs). In FY21, the number of listed companies on the NSE and BSE were 1,920 and 5,542, respectively.

Industry structure and development

The core business of your company is the catering, management service, hospitality and restaurants. As set out in Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, Company provides the following details relating to Management Discussion and Analysis he Hospitality market is expected to grow at a CAGR of around 8% to nearly $5,891 billion by 2022.

Growth in the historic period resulted from improved earning capacity, emerging markets growth, travel, and tourism. Going forward, economic growth in developed nations, and technological development will drive growth. Factors that negatively affected growth in the historic period were talent crunch in emerging Asia, online travel agencies (OTAs) increasing power, slow growth in Asia and low customer retention. Factors that could hinder the growth of this market in the future are increasing preference for healthy food options, security concerns, and government regulations.

Economic Growth - The market is expected to benefit from steady economic growth forecast for many developed and developing countries. This continued economic growth is expected to be a driver of the Hospitality market as increasing disposable incomes and greater affluence will allow consumers to increase their spending on recreational activities such as Hospitality.

Changing Consumer Hospitality Habits - The Hospitality market is expected to be driven by the changing Hospitality habits of consumers. The increasing popularity of Hospitality apps and social Hospitality will propel the growth of the market in the forecast period.

However, the market is expected to face restraints from several factors such as -

Increasing Preference For Healthy Food Options - With growing health concerns many people globally are turning to eating more healthily. Consumers now are more concerned about how food is raised and prepared and are willing to seek out and pay a little more for something they recognize as healthy.

Security Concerns - Terrorism has affected tourists perceptions with regard to travel and the risks associated with it, so negatively affecting the hospitality industry. In recent years, terrorist acts have targeted tourist sites and places of public interest.


Economic conditions remain challenging going forward considering the uncertainties with regard to the impact of the global health crisis and the stand-still in economic activity. There has been a significant rise in risks in the operating environment along with lack of clarity on the timeline for conditions to normalise and economic activity to revive. The Indian economy would be impacted by this pandemic with contraction in industrial and services output across small and large businesses. Current estimates of Indias GDP for fiscal 2021 by various agencies and analysts indicate a contraction in GDP growth. While systemic liquidity is abundant, the economic weakness caused by the pandemic and uncertainty regarding normalisation will impact banking sector loan growth, revenues, margins, asset quality and credit costs.

Government initiatives

The first Union Budget of the third decade of 21st century was presented by Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman in the Parliament on February 1,2020. The budget aimed at energising the Indian economy through a combination of short-term, medium-term and long-term measures.

In the Union Budget 2021-22, capital expenditure for FY22 is likely to increase to increase by 34.5% at Rs. 5.5 lakh crore (US$ 75.81 billion) over FY21 (BE) to boost the economy.

Increased government expenditure is expected to attract private investments, with production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.

In May 2021, the government approved the production linked incentive (PLI) scheme for manufacturing advanced chemistry cell (ACC) batteries at an estimated outlay of Rs. 18,100 crore (US$ 2.44 billion); this move is expected to attract domestic and foreign investments worth Rs. 45,000 crore (US$ 6.07 billion).

The Union Cabinet approved the production linked incentive (PLI) scheme for white goods (air conditioners and LED lights) with a budgetary outlay of Rs. 6,238 crore (US$ 848.96 million) and the ‘National Programme on High Efficiency Solar PV (Photo Voltic) Modules with an outlay of Rs. 4,500 crore US$ 612.43 million).

In June 2021, the RBI (Reserve Bank of India) announced that the investment limit for FPI (foreign portfolio investors) in the State Development Loans (SDLs) and government securities (G-secs) would persist unaffected at 2% and 6%, respectively, in FY22.

To boost the overall audit quality, transparency and add value to businesses, in April 2021, the RBI issued a notice on new norms to appoint statutory and central auditors for commercial banks, large urban co-operatives and large non-banks and housing finance firms.

In May 2021, the Government of India has allocated Rs. 2,250 crore (US$ 306.80 million) for development of the horticulture sector in 2021-22.

In November 2020, the Government of India announced Rs. 2.65 lakh crore (US$ 36 billion) stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction and housing. Also, Indias cabinet approved the production-linked incentives (PLI) scheme to provide ~Rs. 2 trillion (US$ 27 billion) over five years to create jobs and boost production in the country.

Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Mr. Narendra Modi, Prime Minister of India, launched Make in India initiative with an aim to boost countrys manufacturing sector and increase purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the Government has also come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy.

Road Ahead

As indicated by provisional estimates released by the National Statistical Office (NSO), India posted a V-shaped recovery in the second half of FY21. As per these estimates, India registered an increase of 1.1% in the second half of FY21; this was driven by the gradual and phased unlocking of industrial activities, increased investments and growth in government expenditure.

As per the Reserve Bank of Indias (RBI) estimates, Indias real GDP growth is projected at 9.5% in FY22; this includes 18.5% increase in the first quarter of FY22; 7.9% growth in the second quarter of FY22; 7.2% rise in the third quarter of FY22 and 6.6% growth in the fourth quarter of FY22.

India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from nonfossil sources by 2030, which is currently 30% and have plans to increase its renewable energy capacity from to 175 gigawatt (GW) by 2022. In line with this, in May 2021, India, along with the UK, jointly launched a ‘Roadmap 2030 to collaborate and combat climate change by 2030.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report. It is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.

1. Segment-wise or product-wise performance.

We not only showed improvement in the financial frontier but also on companys share performance in the market.

2. Discussion on financial performance with respect to operational performance.

The segment and product wise performance is as below: 31 Mar 2021:

(Rs. in Lakhs)

S.No. Particulars As at 31 Mar 2021 As at 31 Mar 2020
Catering & Management Service:
1 Sale of Food & Beverage 10,628.24 12,427.59
2 Management Service Charges 5,408.11 6,058.81
3 Room Revenue 91.49 74.27
Total 16,127.84 18,560.66

Your directors feel that though the financial performance has been lessor as compared to last year, operational performance remained equally good given the challenge that your employees were highly exposed to the threat of pandemic due to Covid -19.

3. Business development

The major development during the year was as under:-

• Since Indian healthcare companies are entering into merger and acquisitions with domestic and foreign companies, we will drive growth and gain new markets

• Implementation of innovation in the marketing efforts of the company. This was instrumental in delivering the sales growth during the year.

• Huges improvement initiative with respect to IT Dept.

• Consolidating the sales and distribution operations in the existing geographies.

The major work plan for the current year is as under:-

• To expand the footprint in all the geographies.

• Exploring new opportunity.

• To further invest in the organizational capacity and capability of the business in Non Apollo Business

4. Opportunities & Threats

Company perceives following as the opportunity and threat:

• Major players in the market prefers to outsource F&B services to industrial caterers.

• Few players in the market has the niche of providing customized menu for patients and hospitals.

• Expansion or growth in hospital or health care sectors provides us an opportunity to expand business.

• Regulated work and regulatory environment.

5. Risks and concern

As organized retail needs to comply with various regulations including FSSA, APMC and other local regulations, this leads to unfair competition with unorganized retail as the cost of compliance adds additional burden to the low margins. An efficient food supply chain is critical for organized food retail as food products need to be made available fresh and at good quality.

Currently, this is turning out to be expensive due to lack of adequate cold storage/chillers and cost of power.

6. Outlook

The continued efforts to develop the business should stand it in good stead. However, the inflation prevailing within the country and continuous increase in raw materials costs have a significant role to play in the actual performance.

7. Internal controls and their adequacy.

The company has proper and adequate internal control system to ensure that all that all the assets are safeguarded and that all transactions are authorized, recorded and reported correctly. Regular internal audits and check are carried out to ensure that the responsibilities are executed systems and procedures to ensure the efficient conduct of business the audit committee of the board oversees the internal controls within the organization.

8. Material developments in Human Resources / Industrial Relations front, including number of people employed.

Our employees form the backbone of our organization. your company takes pride in the commitment, competence and dedication shown by its employees In all areas of operation. Industrial relations have remained harmonious throughout the year. your company endeavors to follow best HR practices across all areas. theses cover recruitment, induction, development and training and appraisal systems which are tied in with defined key result areas. There were 3872 employees which includes the permanent staff, FTCs Contracted/outsourced staff/Deputed staff as on March 31,2021

9. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Ratio Analysis FY 20-21 FY 19-20
Debtors Turnover Ratio Turnover / Avg A/cs Receivable 4.65 Times 5.06 Times
Inventory Turnover Ratio Cost of goods sold / Avg Inventory 92.38 Times 72.78 Times
Interest Coverage Ratio EBIT / Interest 7.69 Times 20.24 Times
Current Ratio Current Assets / Current Liabilities 2.55 Times 2.17 Times
Debt Equity Ratio Total Liability / Share Holders Eq + R + S 0.57 Times 0.76 Times
Operating Profit Margin % EBIT / Net Sales 5.62% 7.66%

The spread of the Covid-19 pandemic made significant impact on the business of the Company. Your Companys revenue from operation has decreased from Rs.191 Crores as in the previous Financial Year (FY) 2019-20 to Rs.165.21 Crores in FY 2020-21. The above reason has resulted in most of ratios change of a ratios beyond 25%.

10. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.]

Return on Net Worth FY 20-21 FY 19-20
Return on Capital Employed % EBITDA / Capital Employed 38.18% 41.20%

The spread of the Covid-19 pandemic made significant impact on the business of the Company. Your Companys revenue from operation has decreased from Rs.191 Crores as in the previous Financial Year (FY) 2019-20 to Rs.165.21 Crores in FY 2020-21. The above reason has resulted in most of ratios change of a ratios beyond 25%.

11. While in preparation of financial statements, treatment was different from that prescribed in an Indian Accounting Standards:

Company has followed the required accounting standard and has not deviated from treatment as prescribed under accounting standard.