ROYAL ORCHID HOTELS 2023-24 Annual Report Analysis

Wed, 9 Oct

ROYAL ORCHID HOTELS has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

ROYAL ORCHID HOTELS Income Statement Analysis

• Operating income during the year rose 11.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.9% in FY24 as against 31.1% in FY23.
• Depreciation charges increased by 8.1% and finance costs increased by 13.8% YoY, respectively.
• Other income grew by 18.3% YoY.
• Net profit for the year grew by 0.9% YoY.
• Net profit margins during the year declined from 17.8% in FY23 to 16.1% in FY24.

ROYAL ORCHID HOTELS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	2,635	2,936	11.4%
Other income	Rs m	161	191	18.3%
Total Revenues	Rs m	2,797	3,127	11.8%
Gross profit	Rs m	819	761	-7.1%
Depreciation	Rs m	184	199	8.1%
Interest	Rs m	161	183	13.8%
Profit before tax	Rs m	636	570	-10.3%
Tax	Rs m	167	97	-41.9%
Profit after tax	Rs m	469	474	0.9%
Gross profit margin	%	31.1	25.9
Effective tax rate	%	26.2	17.0
Net profit margin	%	17.8	16.1

Don't Miss: Key Information for Long-term Investors

ROYAL ORCHID HOTELS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 888 million as compared to Rs 799 million in FY23, thereby witnessing an increase of 11.1%.
• Long-term debt down at Rs 467 million as compared to Rs 655 million during FY23, a fall of 28.7%.
• Current assets fell 13% and stood at Rs 1 billion, while fixed assets rose 20% and stood at Rs 3 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 5 billion as against Rs 4 billion during FY23, thereby witnessing a growth of 10%.

ROYAL ORCHID HOTELS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,730	1,907	10.3
Current Liabilities	Rs m	799	888	11.1
Long-term Debt	Rs m	655	467	-28.7
Total Liabilities	Rs m	4,167	4,569	9.6
Current assets	Rs m	1,163	1,008	-13.3
Fixed Assets	Rs m	2,836	3,407	20.1
Total Assets	Rs m	4,167	4,569	9.6

ROYAL ORCHID HOTELS Cash Flow Statement Analysis

• ROYAL ORCHID HOTELS's cash flow from operating activities (CFO) during FY24 stood at Rs 594 million, an improvement of 7.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -373 million, an improvement of 320.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -385 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -164 million from the Rs 215 million net cash flows seen during FY23.

ROYAL ORCHID HOTELS Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	555	594	7.0%
Cash Flow from Investing Activities	Rs m	-89	-373	-
Cash Flow from Financing Activities	Rs m	-252	-385	-
Net Cash Flow	Rs m	215	-164	-

Current Valuations for ROYAL ORCHID HOTELS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.3, an improvement from the EPS of Rs 17.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 355.0, stands at 21.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.1 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 13.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	96.1	107.0
TTM Earnings per share	Rs	17.1	17.3
Diluted earnings per share	Rs	17.1	17.3
Price to Cash Flow	x	11.4	13.9
TTM P/E ratio	x	15.8	21.3
Price / Book Value ratio	x	3.4	4.9
Market Cap	Rs m	5,901	9,329
Dividends per share (Unadj.)	Rs	2.0	2.5

Ratio Analysis for ROYAL ORCHID HOTELS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY24, from 1.5x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 4.1x during FY24, from 5.0x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 24.8% during FY24, from 27.1% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 31.7% during FY24, from 33.4% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 14.4% during FY24, from 15.1% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.5	1.1
Debtors’ Days	Days	444	409
Interest coverage	x	5.0	4.1
Debt to equity ratio	x	0.4	0.2
Return on assets	%	15.1	14.4
Return on equity	%	27.1	24.8
Return on capital employed	%	33.4	31.7

To see how ROYAL ORCHID HOTELS has performed over the last 5 years, please visit here.

ROYAL ORCHID HOTELS Share Price Performance

Over the last one year, ROYAL ORCHID HOTELS share price has moved up from Rs 317.1 to Rs 355.0, registering a gain of Rs 38.0 or around 12.0%.

Overall, the S&P BSE SENSEX is up 25.5% over the year.

(To know more, check out historical annual results for ROYAL ORCHID HOTELS and quarterly results for ROYAL ORCHID HOTELS)