Company The Byke Hospitality Ltd. Industry Hotels CMP 156.6 MCAP 627.93 cr FV 10 MDA ranking (1-5) 4 Growth Outlook ranking(1-5) 3.5 Particulars FY11 FY12 FY13 FY14 Net Sales 332.40 490.60 1009.40 1557.10 Growth % #VALUE! 48% 106% 54% EBITDA 41.20 52.21 181.20 287.40 PAT 21.50 24.00 77.60 158.90 EPS 1.71 1.26 3.87 7.93 Eq. Share Cap 125.50 190.50 200.50 200.50 Reserves 435.30 470.00 524.10 647.80 Book Value 34.69 24.67 26.14 32.31 Total Debt 1.80 173.40 198.70 145.50 Gross Block 164.70 511.10 812.30 923.60 Cash 10.30 20.00 10.50 19.80 Capital Employed 437.10 643.40 722.80 793.30 CFO 3.80 27.70 156.80 199.90 EBITDA % 12% 11% 18% 18% PAT % 6% 5% 8% 10% ROE % 5% 5% 15% 25% ROCE % 5% 4% 11% 20% P/E 91.41 124.30 40.46 19.76 Debt / Equity (x) 0.00 0.26 0.27 0.17 Net Sales/ Gross Block (x) 2.02 0.96 1.24 1.69 No. of Rooms 182 425 465 465 2,802 1,771 3,330 5,138 -37% 88% 54% Industry: The Government has allocated ` 1,573 crores to the Tourism Ministry for 2015-16, compared to ` 1,183 crores for the previous fiscal. The visa-on-arrival enabled electronic travel authorisation for 43 countries further invited more tourists. The domestic tourist spending is projected to touch 85% by 2024 on the back of India’s emerging middle class and rising discretionary spend. About the Company: The Byke Hospitality Ltd is a fast emerging name in the hospitality sector with luxury resorts boutique hotels under its banner. The business can be broadly classified into two segments: Owned & Leased (O&L) and Room Chartering (RC). Currently the group has a bouquet of 8 luxurious properties:- 1 The Byke Old Anchor South Goa Lavish resort with 240 guest rooms spread across 19 acres of land. 2 restaurants, 2 lawns/banquets, 3 conference halls. 2 The Byke Hidden Paradsise North Goa Boutique resort with 40 guest rooms. 1 restaurant 3 The Byke Sunflower North Goa 22 rooms, 1 restaurant 4 The Byke Heritage Matheran Boutique resort with 80 guest rooms. 2 restaurants, 2 conference halls 5 The Byke Redwood Matheran 25 rooms, 1 restaurant. 6 The Byke Paawana Mandawa Rajasthan Spread over 3000 sq Mts area with 18 well equipped old traditional rooms. 7 The Byke Grassfield Jaipur 54 rooms, 3 restaurants, 3 lawns/banquets, 3 conference halls 8 The Byke Neelkanth Manali Boutique hotel of 40 rooms, 1 restaurant. New. 9 The Byke Suraj Plaza Thane 122 rooms, 3 restaurants, 3 conference halls. (Operational from first half of 2016) We operate eight hotel properties in Maharashtra, Rajasthan, Goa and Himachal Pradesh of which two are owned and the rest six are on a long-term lease. We follow a unique asset-light business model, which allows us to leverage high profitability from a low capital base As on March 2015, we have 519 rooms under management, of which 102 are owned. As the resorts are taken on lease, we utilise the resources for modernisation and renovation of acquired properties, which in turn helps increase occupancies and ARRs. Room Chartering Model We started our room chartering business in 2010-11. Under this model, we buy room nights of mid-budget hotels in bulk across leisure tourist and religious destinations during off-peak seasons. In the peak seasons we sell those room nights. Strong network of around 208 active agents present across 47 cities While there is no capital cost involved, the profits earned directly boost the bottom-line In 2015, the Company sold 373,250 room nights, compared to 345,000 in 2014 across almost 50 cities in India. Key Takeaways: During the year, we added a property in Jaipur called Byke Grassfield, which has 54 rooms, three restaurants, three lawns/ banquets and three conference rooms. The Jaipur hotel has become a popular wedding destination in the city. We also added Byke Suraj Plaza, Thane to our O&L portfolio in May, 2015. The property is likely to be operational in the first half of 2016. The Thane hotel with 122 rooms is right across Suraj Water Park, a theme water park. We plan to expand our O&L, as well as RC portfolio in the next three years. We are planning to add three new properties at Thane, Shimla and Puri to our O&L portfolio. They will be operational by the end of 2015-16. With this addition, the bouquet of rooms will be 697 from 519. In the next leg of our growth, the Company aims to increase its presence in 8 holiday destinations We are developing an online portal, ‘tripdeal.com’ to provide a fillip to room chartering. We are planning to extend our presence across eight popular tourist destinations, including Lonavala, Mahabaleshwar, Chandigarh,Dalhousie,Jodhpur, Udaipur, Darjeeling and Gangtok by 2016-17. The average occupancy in O&L business has been competently increasing from 61% in 2012 to 70% in 2014. Although it declined to 67% in 2015, primarily due to the launch of the new Byke Grassfield at Jaipur. The ARR saw an increase of ~8-10% in all the hotels, leading to an overall ARR of ` 3,769 in 2015, a rise of 4% over the previous year’s ARR of ` 3,617. In the RC business, the ARR increased from ` 2,175 in 2014 to ` 2,404 in 2015, registering a growth of 10%. The occupancy increased from 92% in 2014 to 94% in 2015. The room chartering business faces geographic threats arising out of seasonal lack of demand or natural calamities. However, due to pan- India presence, individual risks get mitigated. ( Rs Mn) FY15 H1FY16 CAGR 1814.20 935.50 53% 17% 39% Porters 5 forces 373.70 199.60 74% Buyers Power - 200.30 95.50 75% Suppliers Power - 9.99 2.38 Threat of new Entrant - 200.50 401.00 Threat of Substitute - 599.60 695.00 Industry Rivalry - 29.91 17.33 -4% 124.10 98.00 Online Model status 1031.90 Breakup of operating performance of each of the segment 22.80 9.90 Lot of plans made but delay in execution. What abt sunhine Goa? 723.70 793.00 Chartering business - need to understand how does this work? 164.40 Why buying land and building own property - when lease busines is working well 21% 21% Capex plan - do they plan to raise money for expansion 11% 10% What is the arrangement for the lease model - share of revenue/profit to the owner? 33% 14% How much time does its take for a property to achieve breakeven? 28% 12% What is the operating margin of Byke Heritage Matheran ? Is this the highest? 15.68 65.76 Hotel wise margin breakup 0.16 0.09 1.76 #DIV/0! 519 697 Chartering 0.4406417112 5,363 4,118 Owned 0.5593582888 4% -23% 1,573 crores to the Tourism Ministry for 2015-16, compared to ` 1,183 crores for the previous fiscal. The visa-on-arrival enabled electronic travel authorisation for 43 countries further invited more tourists. domestic tourist spending is projected to touch 85% by 2024 on the back of India’s emerging middle class and rising discretionary spend. The Byke Hospitality Ltd is a fast emerging name in the hospitality sector with luxury resorts boutique hotels under its banner. Owned & Leased (O&L) and Room Chartering (RC). Lavish resort with 240 guest rooms spread across 19 acres of land. 2 restaurants, 2 lawns/banquets, 3 conference halls. Boutique resort with 40 guest rooms. 1 restaurant 22 rooms, 1 restaurant Boutique resort with 80 guest rooms. 2 restaurants, 2 conference halls 25 rooms, 1 restaurant. Spread over 3000 sq Mts area with 18 well equipped old traditional rooms. 54 rooms, 3 restaurants, 3 lawns/banquets, 3 conference halls Boutique hotel of 40 rooms, 1 restaurant. 122 rooms, 3 restaurants, 3 conference halls. (Operational from first half of 2016) eight hotel properties in Maharashtra, Rajasthan, Goa and Himachal Pradesh of which two are owned and the rest six are on a long-term lease. which allows us to leverage high profitability from a low capital base 519 rooms under management, of which 102 are owned. we utilise the resources for modernisation and renovation of acquired properties, which in turn helps increase occupancies and ARRs. Under this model, we buy room nights of mid-budget hotels in bulk across leisure tourist and religious destinations during off-peak seasons. In the peak seasons we sell those room nights. While there is no capital cost involved, the profits earned directly boost the bottom-line 345,000 in 2014 across almost 50 cities in India. we added a property in Jaipur called Byke Grassfield, which has 54 rooms, three restaurants, three lawns/ banquets and three conference rooms. popular wedding destination in the city. added Byke Suraj Plaza, Thane to our O&L portfolio in May, 2015. The property is likely to be operational in the first half of 2016. across Suraj Water Park, a theme water park. RC portfolio in the next three years. add three new properties at Thane, Shimla and Puri to our O&L portfolio. With this addition, the bouquet of rooms will be 697 from 519. aims to increase its presence in 8 holiday destinations to provide a fillip to room chartering.