IHCL posts 57% rise in net profit

The Indian Hotels Company Ltd, owners of the Taj Group of hotels, has posted 57 per cent increase in standalone net profit for the January-March quarter compared to the year-ago period.

Net profit for the company rose to Rs 94 crore in Q4, against Rs 59.9 crore in the same period last year. However the annual profit for 2010-11 on a standalone basis declined to Rs 141 crore, against Rs 153 crore last year.

The company said the FY11 results cannot be compared to 2009-10 results because the financial year had benefited from the Rs 64 crore accrued towards loss of profit insurance cover for Taj Mahal hotel in Mumbai.

The company said that an improved occupancy rate and rise in average room rates resulted in a 20 per cent higher revenue at Rs 531 crore.

For the hotel industry, the fourth quarter has always been the strongest in terms of revenues and 65 per cent of IHCL's annual profits came from the last quarter.

On an average the occupancy rates across properties in India were 70 per cent and average room rates had also increased. However, the resnt was lower than peak rates in 2007-08, said Ajoy Misra, group's senior vice president of sales and marketing.

"We have reported a good performance. There has been 20 per cent increase in the topline,'' said the group's chief financial officer Anil Goel. ICHL has a total debt of Rs 3,600 crore and the company is saving on interest outgo through measures like conversion of high-cost short-term loans to long-term loans and through reduction in interest rates of loans. It will also get Rs 400 crore equity infusion from its owners.

The group runs 107 hotels across India and other parts of world through direct ownership, subsidiaries and management contract and hopes to add 16 hotels in the current financial year to its portfolio. The group is also planning to expand its footprint by managing hotels in tier 2 cities and in Morocco in North Africa.

ICHL's stocks closed at Rs 78.95 at the BSE, 0.25 per cent higher than the previous day’s close.