manac_ group 8_profitability problem-viceroy hotels limited
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Profitability problem:Viceroy Hotels
Sarabjot Singh 12P043
Saurabh Mishra 12P044
Vineet Gupta 12P045
Swapnil Sheth 12P046
Shrey Tandon 12P047
Shrimoy Tripathy 12P048
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History
It started as Krishna Cold Drinks Pvt. Ltd.in1965, changed the name to Palace Heighthotels in 1990
Same year it got converted into a public Ltd.Company
It is currently working out of Hyderabad, APand has a good reach in the Southern India
Acc. to a latest survey by TAI, Indian hotelindustry ranks 5th worldwide for the bestbusiness outlook
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Introduction
Viceroy
Hotels
LuxuryHotels
BusinessHotels
Restaurants F & B Retail
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Profitability Ratios
Operating profit ratio = EBITSales
It is the reflection of the operating-model
of the company
Net Profit Ratio = PATSales
PAT is the overall surplus out of the sales It is used to compare the margins of
various players in the same industry
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Profitability Ratios
ROI = EBITCapital Employed
It presents the managements ability to
effectively utilize the total investments
EPS = Net Income Dividends onPreferred stock
No. of Equity SharesIts the bottom line indicator of financialperformance
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Profitability Ratios
ROE = PATNet Worth
Managements ability to employ equity profitably
Operating ratio = Total Operating ExpenseSales
It the expense incurred for every unit sale.
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0
10
20
30
40
50
60
70
20112010200920082007
EBIT/SALES
Viceroy
IHC
Asian
EIH
Leela
Operating Profit Ratio
%
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0
10
20
30
40
50
60
70
80
90
100
20112010200920082007
Operating ratio = operating expense/SALES
Viceroy
IHC
LEELA
Asian
EIH
Operating Ratio
%
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-10
-5
0
5
10
15
20
25
30
35
20112010200920082007
PAT/SALES
Viceroy
IHC
LEELA
Asian
EIH
Net Profit Ratio
%
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-5
0
5
10
15
20
25
30
20112010200920082007
ROI
Viceroy
IHC
Asian
EIH
Leela
ROI
%
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-10
-5
0
5
10
15
20
25
30
20112010200920082007
ROE
Viceroy
IHC
Asian
EIH
Leela
ROE
%
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-3
-2
-1
0
1
2
3
4
5
6
7
20112010200920082007
EPS
Viceroy
IHC
EIH
Leela
EPS
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0
100
200
300
400
500
600
700
800
900
1000
'11'10'09'08'07
In
RsCrores
CWIP And Gross Block
CWP
Gross Block
CWIP And Gross Block
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0
200
400
600
800
1000
1200
20112010200920082007
In
RsCrores
Debt
Unsecured
Secured
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
20112010200920082007
Interest/PBDIT
Interest as a percentage of PBDIT
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Du-Pont Analysis
ROE = PAT SALES TOTAL ASSETS
SALES TOTAL ASSETS EQUITY FUNDS
For 2010-11,
ROE = 0.8 102.93 1286.89
102.93 1286.89 237.43
= 0.0077 * 0.08 * 5.42 ROE = 0.33%
Therefore, there is a need to increase PAT
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Industry Outlook
Strong Points
VOA eases travel to India
Large global brands remain committed toIndia
Demand for travel tourism expected to
grow by more than 8.2% in the next 3 yrs.
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Recommendations
Bring down debt on its balance sheet
Sort out the Working Capital-in-progress
Need to restructure its businessoperations
Opening both luxury & business hotels in
Delhi, NCR, Mumbai Comfort & low cost hotels in tier 2 cities
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REFERENCES
www.viceroyhotels.com
www.moneycontrol.com
www.wikipedia.org
http://www.viceroyhotels.com/http://www.moneycontrol.com/http://www.wikipedia.org/http://www.wikipedia.org/http://www.moneycontrol.com/http://www.viceroyhotels.com/ -
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THANK YOU!!