Mumbai: Hotel chain operator Indian Hotels Co Ltd , part of the Tata group, registered a net profit in July-Sept, as against a loss a year ago, on higher revenues and lower interest costs.
“Despite the (standalone) debt being at same levels we were able to bring down the interest cost which is a result of change in the currency mix and converting short-term loans into long term,” Anil Goel, chief financial officer told reporters.
A guest relaxes poolside at the Taj Mansingh Hotel in New Delhi. Photo: Bloomberg.
Net interest cost of the company, which runs the Taj chain in the five-star segment, stood at Rs 24.72 crore during the quarter compared with Rs 29.59 crore a year ago.
The firm has a consolidated debt of about Rs 3400 crore and a standalone debt of around Rs 2300 crore. It does not have plans to raise fresh debt, Goel said.
“We had expressed a desire to deleverage the balance sheet and a lot of work has been done in the last 12-18 months,” he said.
Earlier in the day, Indian Hotels posted a net profit of Rs 8.12 crore in the September quarter from a net loss of Rs 6.3 crore in the same period a year ago.
The company’s income from operations for the quarter ended September grew 9% to Rs 358 crore, supported by growth in not just income from rooms, but also through the food and beverage sales.
Apart from the Taj chain, it also operates Vivanta in the four-star segment, Gateway Hotels in the three-star segment and Ginger in the budget space.
The company raised its room tariffs across properties by an average of 7-13% in September, said Deepa Misra, vice-president marketing.
The company expects to add 13 hotels in the fiscal year 2011/12 with 19 more under development in 2012/13 across India.
“We are strongly focussed on making sure that the new assets in the pipeline hit the market at speed and the assets will be very substantially under management contracts. We are sensitive to conserving cash,” Goel said.
Goel also said there was some stress in the US but hoped to turn around the operations there in 14-15 months.
“...We have put together a strong taskforce to turnaround the US portfolio.”
Indian Hotels also has operations in London, the Middle East, Sri Lanka and Australia.
The first half of the year is essentially an off season for the sector and the second quarter is particularly the weakest.
“We have put the weaker period behind us and are looking forward to reasonably good growth,” Goel said.
Shares of the company, which the market value $1.06 billion, have fallen 28% since the start of the year compared with a 13% fall in the main index .
On Friday, the stock ended 0.72% up at Rs 69.85 in a firm Mumbai market.