Samhi Hotels Limited (SAMHI)

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* Summaries created by AI. Please verify by checking the actual call transcript.

Summary from August 2024

SAMHI Hotels Limited Q1 FY25 Earnings Conference Call Summary

Financial PerformanceAsset Income: Increased by 31% year-on-year to INR 251 crores. • Asset EBITDA: Grew by 32% to INR 25 crores, with a margin of 37.7%. • Consolidated EBITDA: Surged by 88% to INR 75 crores, with a margin of 34.6%. • Net Debt: Stood at INR 1,860 crores; credit rating upgraded to A- stable.

Hotel Portfolio DevelopmentsCaspia Pro Rebranding: Set to become Holiday Inn Express in October. • Marriott Agreements: Renovation and rebranding of two properties in Pune and Jaipur. • Inventory Expansion: Targeting a 10% to 15% increase with new rooms in Kolkata, Bangalore, Hyderabad, and Sriperumbudur.

EBITDA and Revenue ProjectionsACIC Portfolio: Expected to align EBITDA margins with overall portfolio by fiscal year-end. • RevPAR Growth: Anticipated significant increases from renovations and rebranding. • Acquisition Strategies: Exploring opportunities for asset recycling and acquisitions.

Capital Recycling and Debt ManagementRebranding Contracts: Signed with Marriott for Caspia in New Delhi. • Debt Profile: Expecting to lower average cost of debt from 9.7% to below 9.5%. • Repayment Profile: Strong, with only one non-convertible debenture maturing in January 2027.

Market Supply and Growth StrategyLow Supply Growth: Noted in Hyderabad, Pune, and Delhi, favorable for hotel performance. • Inventory Growth Goal: 10-15% increase, aiming for a 25% rise in EBITDA over FY24.

Future OutlookCAGR Projections: 10% to 15% in inventory and 25% increase in EBITDA over FY24. • RevPAR Growth: Anticipated high single-digit to low double-digit growth in upcoming quarters. • Capital Expenditures: Planned investment of INR 138 crores for renovations and room additions.

Performance Metrics and Market ChallengesOccupancy Rates: Improved, but RevPAR growth muted due to fewer MICE events. • Revenue Potential: Adding 302 rooms estimated to generate INR 25 to 30 crores. • Satisfaction with Progress: CEO expressed contentment with post-IPO growth and integration efforts.

ConclusionPositive Outlook: Continued recovery and growth anticipated in the hospitality sector, with a focus on core markets and disciplined capital management.

Summary from June 2024

SAMHI Hotels Limited Q4 FY24 Earnings Conference Call Summary

Financial PerformanceQ4 FY24 Highlights: • Asset income increased by 35% YoY to INR 281 crores. • Occupancy rate at 76%. • EBITDA rose by 36% to INR 108 crores. • Positive PAT of INR 11 crores.

Full-Year Performance: • Asset income grew by 28% to INR 963 crores. • EBITDA increased by 32% to INR 348 crores. • Net debt reported at INR 1,824 crores, with cost of debt reduced from 13% to 9.8%.

Future OutlookGrowth Projections: • Plans to open 300 new hotel rooms. • Anticipated free cash flow of INR 450 crores for debt reduction and renovations. • Targeting a net debt to EBITDA ratio of 3.5 times by FY25.

RevPAR Growth: • Sustained mid-teen RevPAR growth expected, driven by demand in key markets.

Operational InsightsDeferred Tax Assets: • Unrecognized deferred tax assets of INR 600 crores could be recognized as operations improve.

Renovation Plans: • Greater Noida Caspia Pro hotel fully shut for renovations, reopening in October. • Capital expenditure of INR 70 crores planned for adding 302 rooms.

Segment PerformanceRevPAR Guidance: • Projected growth in high single to low double digits, led by Hyderabad and Bangalore.

Upper Upscale and Upscale Segments: • 22% RevPAR growth noted in key cities. • ACIC portfolio contributed INR 134 crores to revenue and INR 48.8 crores to EBITDA in FY24.

Economic LandscapeMarket Dynamics: • Diversification in customer base observed in Bangalore. • Growth in Chennai attributed to the Sriperumbudur industrial area.

Margin ImprovementIntegration with Marriott: • Positive impact on margins, reducing OTA commissions and customer acquisition costs. • EBITDA margins increased from 30% to 37.5%, with expectations to reach 41-42%.

Return on Capital Employed (ROCE)ROCE Overview: • Overall ROCE at 8%, with Bangalore and Hyderabad exceeding 20%. • Corporate expenses expected to return to FY23 levels.

Market ConfidenceCore Market Outlook: • Strong performance anticipated in Bangalore and Hyderabad. • Positive forward bookings for June and July, despite challenges in April and May.

ConclusionManagement's Optimism: • Projected top line of INR 1,000 crores and EBITDA of approximately INR 360 crores for FY25. • Commitment to ongoing communication regarding the company's outlook.

Summary from February 2024

SAMHI Hotels Q3 FY24 Earnings Conference Call Summary

Key Financial HighlightsRevenue Growth: • 20.3% year-on-year increase in Revenue per Available Room (RevPar) • 39.5% rise in total revenue • 51.4% increase in EBITDA • EBITDA Milestone: • Achieved INR 100 crores on a pre-ESOP basis • Free Cash Flow: • Reached INR 460 million, with plans to reduce debt

Operational PerformancePortfolio Growth: • Strong growth in upper upscale and upscale segments • Positive impact from ACIC acquisition • Room Capacity Expansion: • Target to increase from 4,800 to 5,400 rooms by FY27

Financial ManagementAsset Income: • Increased to INR 2.6 billion (40.5% YoY) • Finance Costs: • Reduced from INR 1.14 billion to INR 651 million • Net Debt: • Decreased from INR 29.4 billion to INR 18.4 billion • Profit Before Tax: • Loss of INR 60 million, improved from INR 803 million loss the previous year

Strategic FocusGrowth Strategy: • Emphasis on brownfield acquisitions for quicker revenue generation • Long-term variable leases for capital-efficient expansion • Market Opportunities: • Strong demand for hotel rooms with stable supply growth

Management InsightsRoom Pipeline: • 5,400 rooms target not solely dependent on ongoing litigation • Cost Structure: • Construction costs for upper upscale hotels around INR 1.2 to 1.4 crores per key • Future Profitability: • Positive profit after tax (PAT) expected in the next quarter or two

Market ConditionsRevPAR and Occupancy: • Anticipated double-digit RevPAR growth from 2024 to 2028 • Occupancy levels exceeding 70% in many cities • Loyalty Programs: • Contribute 40-50% of total customers

Challenges and ConsiderationsLitigation Impact: • Ongoing litigation in Navi Mumbai addressed, with confidence in growth trajectory • Religious Tourism Market: • Recognized potential but focus remains on core business markets

Conclusion • Management remains optimistic about future profitability and market expansion while cautiously exploring new opportunities.

Summary from November 2023

SAMHI Hotels Ltd. Q2 FY24 Earnings Conference Call Summary

Conference Call Overview • Date: November 9, 2023 • Transcript submitted on: November 17, 2023 • Key Executives: • Ashish Jakhanwala (Chairman and Managing Director) • Rajat Mehra (Chief Financial Officer) • Purpose: Record-keeping for BSE and NSE; edited for factual errors.

Company Growth and StrategyIPO Reception: Positive feedback noted. • Market Position: Third-largest hotel room owner in India with ~4,800 rooms. • Acquisition Focus: Revitalizing underperforming hotels; recent acquisition of six hotels. • Macroeconomic Indicators: Airline passenger growth and commercial office space absorption are key for investment strategy.

Financial Performance HighlightsOccupancy Rate: 72% across 31 hotels. • Revenue Growth: 25.3% increase to INR 176.4 crores. • EBITDA Growth: 29.8% rise influenced by ACIC acquisition. • Demand for Business Travel: Strong, with 22.5 million sq. ft. of office space absorbed in India.

Future Plans and TargetsRoom Count Goal: Increase from 4,800 to 5,400 in 2-3 years. • Debt Reduction Target: Net debt to EBITDA below 3.5x by FY25. • Renovation Plans: 900 rooms to be renovated; INR 125 crores allocated for renovations.

Return on Capital and Market InsightsExpected ROCE: 15%-18% average; mid-20% in strong markets. • Market Dynamics: Tier 1 markets show better risk-reward dynamics; focus on fully upgraded properties.

Capital Expenditures and Revenue CompositionCapex Allocation: INR 40-50 crores for annual maintenance; INR 55 lakhs per room for renovations. • Revenue Sources: 34% from corporate contracts, 47% from retail, 13% from group and MICE events.

International Travel and Market OpportunitiesInternational Travel Recovery: Currently at 21% of pre-COVID levels; potential for increased revenue. • Middle-Class Growth: Significant opportunity in India's middle class for hotel services.

Lessons Learned and Industry InsightsInvestment Strategy: Preference for Tier 1 markets over Tier 2 and Tier 3. • Cost Structure Transformation: Shift from high fixed costs to a variable cost model post-COVID. • Sustainability of Rate Increases: Concerns about the long-term absorption of average room rate increases.