Bharat Hotels Net Jumps 13 Per Cent To Rs 35.51 Cr

The Lalit Suri-promoted Bharat Hotels has witnessed a jump of about 13 per cent in its net profit from Rs 31.4 crore in `95-96 to Rs 35.51 crore in the `96-97, despite providing Rs 5 crore for taxation. In the previous financial year the company paid no taxes.

During `96-97 Bharat Hotels' turnover rose by 24.38 per cent to Rs 103.55 crore against Rs 83.25 crore in the previous financial year.

Consequently, the board of directors have decided to pay a dividend of 20 per cent, that is Rs 2 per share on the enhanced share capital for the year ending March `97.

 

The company's result will be discussed at the forthcoming AGM due on September 10.

At the shareholders' meeting, the issue of opening a 5-star hotel in Srinagar is likely to be discussed. The Suris have signed a deal with Maharaja Karan Singh for converting one of his palaces into a hotel. The Oberois had earlier managed the property.

Another issue which is likely to be discussed at the AGM is the differences between Bharat Hotels and Hilton International over the management of the existing Delhi property and the upcoming ones at Mumbai and Goa.

Bharat Hotels sources said the company has questioned Hilton's failure to meet its promised annual budgeted operating profit figures for the Delhi property and has made it clear to them that the management contract is too expensive and is not yielding economic returns for the Suris to justify its continuation.

In the first five months of `97-98, there already has been a shortfall of about Rs 14.5 crore from the budgeted gross operating profit, the sources pointed out, adding, "These disparities affect Bharat Hotels' share of revenue." Bharat Hotels also completed the issue of 13,00,000 global depository receipts of $15, each representing 26 lakh underlying equity shares of Rs 10 each fully paid-up (one GDR represents two equity shares) aggregating to $ 19.50 million.

The GDR was floated to partly finance the properties to come up at Mumbai and Goa in association with Hilton International.

As a result of differences between Bharat Hotels and Hilton International over the annual budgeted profit figures, the Suris have also decided to shelve earlier plans to float two more joint venture companies---a hotel owning company and a management company--- with Hilton International to manage Comfort brand of four-star hotels in India. This would have been the first time that Hilton was to have picked up equity stake in hotel ventures in India.