Valuation of Indian hospitality industry

Valuation of Indian Hospitality Industry
Companies Covered:
East Indian Hotels
Indian Hotels Compnay
Mahindra Holidays
Analysis

Standalone Income Statement
Mär.06 Mär.07 Mär.08 Mär.09
12 mths 12 mths 12 mths 12 mths
INCOME
Revenue From Operations [Gross] 756 939 1,080 889
Less: Excise/Sevice Tax/Other Levies 0 0 0 0
Revenue From Operations [Net] 756 939 1,080 889
Total Operating Revenues 756 939 1,080 889
Other Income 142 53 68 181
Total Revenue 899 992 1,148 1,070
EXPENSES
Cost Of Materials Consumed 56 53 64 64
Operating And Direct Expenses 115 142 161 154
Employee Benefit Expenses 166 196 237 252
Finance Costs 87 98 75 83
Depreciation And Amortisation Expenses 41 43 45 54
Miscellaneous Expenses Written Off 0 6 3 0
Other Expenses 169 202 211 190
Total Expenses 634 741 795 797
Profit/Loss Before Exceptional, ExtraOrdinary Items And Tax 265 251 353 273
Exceptional Items 0 0 0 0
Profit/Loss Before Tax 265 251 353 273
Tax Expenses-Continued Operations
Current Tax 80 101 121 92
Less: MAT Credit Entitlement
Deferred Tax -12 -10 8 7
Other Direct Taxes 3 4 4 3
Tax For Earlier Years
Total Tax Expenses 71 95 133 102
Profit/Loss After Tax And Before ExtraOrdinary Items 194 156 221 171
Prior Period Items -1 -2 0 -1
Extraordinary Items -4 46 -3 0
Profit/Loss From Continuing Operations 189 200 217 170
Profit/Loss For The Period 189 200 217 170
586 743 856 671
COGS 171 196 224 217
Gross Profit (Sales-Cost of Materials Consumed-Purchase of
Stock in Trade-Operating and Direct Expenses-Change in
inventories

Mär.10 Mär.11 Mär.12 Mär.13 Mär.14 Mär.15 Mär.16
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths
774 1,028 1,102 1,134 1,231 1,324 1,417
0 0 0 0 1 0 1
774 1,028 1,102 1,134 1,231 1,323 1,417
774 1,028 1,102 1,134 1,231 1,323 1,417
131 115 46 44 48 43 47
905 1,143 1,147 1,177 1,279 1,366 1,464
59 0
171 139 155 169 189 193 206
245 315 318 329 353 363 397
101 155 54 45 41 31 22
68 87 93 101 99 124 118
0 0
172 357 383 435 458 504 549
816 1,053 1,003 1,078 1,140 1,215 1,292
89 90 144 99 139 151 172
0 -4 11 -15 12 0 -18
89 85 155 84 151 151 154
17 4 19 15 31 49 52
0 2 0 0 0
14 17 13 11 19 6 1
0 0
0 -3 0 0 -1
31 21 33 21 50 55 52
58 65 122 63 102 97 101
0 0
0 0 0 -12 -7 0 0
57 65 122 51 95 97 101
57 65 122 51 95 97 101
544 889 947 965 1,042 1,130 1,210
230 139 155 169 189 193 206

Standlone Balance Sheet
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 52 79 79 79
Total Share Capital 52 79 79 79
Revaluation Reserves 248 244 241 238
Reserves and Surplus 745 851 985 1101
Total Reserves and Surplus 993 1096 1227 1339
Total Shareholders Funds 1045 1174 1305 1418
NON-CURRENT LIABILITIES
Long Term Borrowings 709 782 724 1019
Deferred Tax Liabilities [Net] 120 111 125 133
Other Long Term Liabilities 0 0 0 0
Long Term Provisions 0 0 0 0
Total Non-Current Liabilities 829 893 848 1152
CURRENT LIABILITIES
Short Term Borrowings 0 10 89 0
Trade Payables 96 88 110 144
Other Current Liabilities 47 73 81 85
Short Term Provisions 144 285 94 67
Total Current Liabilities 287 456 373 297
Total Capital And Liabilities 2161 2523 2527 2867
ASSETS
NON-CURRENT ASSETS
Tangible Assets 1117 1121 1328 1388
Intangible Assets 8 8 8 8
Capital Work-In-Progress 240 376 425 587
Intangible Assets Under Development 0 0 0 0
Fixed Assets 1365 1504 1761 1983
Non-Current Investments 304 412 359 350
Deferred Tax Assets [Net] 6 7 13 14
Long Term Loans And Advances 0 0 0 0
Other Non-Current Assets 15 9 2 0
Total Non-Current Assets 1690 1932 2135 2347
CURRENT ASSETS
Current Investments
Inventories 43 30 33 30
Trade Receivables 85 101 114 92
Cash And Cash Equivalents 66 51 26 42
Short Term Loans And Advances 276 409 218 355
OtherCurrentAssets 0 0 0 0
Total Current Assets 471 591 392 520
Total Assets 2161 2523 2527 2867

79 114 114 114 114 114 114
79 114 114 114 114 114 114
235 232 229 226 223 221 219
1103 2241 2292 2284 2310 2322 2354
1339 2473 2521 2511 2533 2543 2573
1417 2588 2635 2625 2648 2657 2687
1121 535 150 144 104 64 24
148 150 163 174 192 190 191
0 13 13 3 2 5 4
0 12 12 13 15 17 17
1269 710 339 334 313 276 237
138 0 10 195 136 104 185
96 55 51 68 74 76 145
91 420 218 157 169 179 104
67 64 76 62 72 75 3
392 539 355 482 452 434 437
3079 3837 3329 3441 3413 3367 3361
1990 2061 2015 2116 2068 1946 1885
8 0 0 0 0 0 8
174 101 159 40 46 79 104
0 0 0 0 0 7 0
2173 2162 2175 2157 2114 2032 1997
378 605 616 706 704 729 697
15 0 0 0 0 0 0
0 280 313 321 331 315 392
0 0 0 0 0 0 0
2566 3047 3104 3184 3149 3076 3086
12 0 0 0 0
30 34 33 34 40 39 42
99 126 141 174 170 189 186
14 594 12 20 16 24 10
370 35 26 25 37 39 37
0 2 1 4 0 0 0
513 790 225 257 264 291 275
3079 3837 3329 3441 3413 3367 3361

Mär.06
Revenue 756
Growth %
Total Expenses 634
Growth %
% of Revenue 84%
Depreciation 41
Growth %
Depreciation to Fixed Assets 3%
Finance Costs 87
Growth %
Operating Costs (Total Expenses-Dep-Finance Costs) 506
Growth %
% of Revenue 67%
EBITDA (Revenue -Operating Expenses) 250
Growth %
EBITDA Margin 33%
Total Tax Expense 71
Growth %
% of Tax to EBITDA 28%
PAT 189
Growth %
PAT Margin 25%
Fixed Assets 1365
Change in Fixed Assets (Current-Previous)
Growth %
% of Revenue 180%
Current Assets 471
Growth %
% of Revenue 62%
Current Liabilities 287
Growth %
% of Revenue 38%
Working Capital 184
Change in WC (Current-Previous)
CAPEX (CHANGE IN FIXED ASSETS - DEP)
FCFF (EBITDA Formula) (EBITDA(1-Tax Rate)+Dep(Tax Rate)-capex-change in WC) 191

Mär.07 Mär.08 Mär.09 Mär.10 Mär.11 Mär.12 Mär.13 Mär.14 Mär.15
939 1,080 889 774 1,028 1,102 1,134 1,231 1,323
24% 15% -18% -13% 33% 7% 3% 9% 8%
741 795 797 816 1,053 1,003 1,078 1,140 1,215
17% 7% 0% 2% 29% -5% 7% 6% 7%
79% 74% 90% 105% 102% 91% 95% 93% 92%
43 45 54 68 87 93 101 99 124
4% 6% 20% 25% 29% 6% 8% -2% 25%
3% 3% 3% 3% 4% 4% 5% 5% 6%
98 75 83 101 155 54 45 41 31
13% -24% 10% 22% 54% -65% -17% -10% -25%
601 675 660 647 810 856 933 1,000 1,060
19% 12% -2% -2% 25% 6% 9% 7% 6%
64% 62% 74% 84% 79% 78% 82% 81% 80%
338 405 229 127 217 246 201 231 263
35% 20% -44% -44% 70% 13% -18% 15% 14%
36% 38% 26% 16% 21% 22% 18% 19% 20%
95 133 102 31 21 33 21 50 55
33% 40% -23% -69% -33% 56% -36% 138% 10%
28% 33% 45% 25% 10% 13% 10% 22% 21%
200 217 170 57 65 122 51 95 97
6% 8% -22% -66% 13% 90% -58% 86% 2%
21% 20% 19% 7% 6% 11% 4% 8% 7%
1504 1761 1983 2173 2162 2175 2157 2114 2032
139 257 222 190 -10 13 -18 -43 -81
10% 17% 13% 10% 0% 1% -1% -2% -4%
160% 163% 223% 281% 210% 197% 190% 172% 154%
591 392 520 513 790 225 257 264 291
26% -34% 33% -1% 54% -72% 14% 3% 10%
63% 36% 59% 66% 77% 20% 23% 21% 22%
456 373 297 392 539 355 482 452 434
59% -18% -20% 32% 38% -34% 36% -6% -4%
49% 35% 33% 51% 52% 32% 42% 37% 33%
135 19 223 120 250 -130 -225 -188 -143
-49 -116 204 -103 130 -380 -95 36 45
96 212 167 122 -98 -81 -119 -142 -205
209 192 -221 94 173 687 404 308 394

8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5%
Current Market Price (31/03/16)
Upside/Downside
Indian Hospitality Industy is growing(7%) belo
growth rate can
Years (t)
Discounted FCFF
Sum of Discounted FCFF (Valuve of Company)
Shares Outstanding
FCFF per share

Mär.16 Mär.17 Mär.18 Mär.19 Mär.20 Mär.21
1,417 1523 1637 1752 1857 1968
7% 7.5% 7.5% 7% 6% 6%
1,292 1399 1500 1604 1702 1803
6% 8.3% 7.2% 7% 6% 6%
91% 92% 92% 92% 92% 92%
118 132 144 150 161 171
-5% 11.9% 9.2% 5% 7% 6%
6% 6% 6% 6% 6% 6%
22 31 28 27 29 28
-28% 41.1% -10.2% -3% 6% -3%
1,152 1,236 1,328 1,426 1,513 1,605
9% 7.3% 7.4% 7% 6% 6%
81% 81% 81% 81% 81% 82%
264 286 309 325 344 363
1% 8.3% 7.7% 5% 6% 6%
19% 19% 19% 19% 19% 18%
52 59 63 66 70 74
-4% 13.5% 6.3% 5% 7% 5%
20% 21% 20% 20% 20% 20%
101 64 74 82 84 91
5% -36.5% 14.8% 11% 3% 8%
7% 4% 5% 5% 5% 5%
1997 2367 2456 2607 2812 2954
-35 370 89 151 205 142
-2% 18.5% 3.7% 6% 8% 5%
141% 155% 150% 149% 151% 150%
275 319 340 357 384 406
-6% 16.2% 6.6% 5% 8% 6%
19% 21% 21% 20% 21% 21%
437 510 530 564 607 638
1% 16.6% 4.0% 7% 8% 5%
31% 33% 32% 32% 33% 32%
-162 -191 -190 -208 -223 -233
-19 -28 1 -18 -15 -10
-153 238 -55 1 44 -29
408 45 329 307 278 363 9472 Terminal Va

8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% Growth Rate
1 2 3 4 5 5
41 280 240 200 241 6299
7302
57.2
127.75
104.85
22%
%) below GDP growth (7.6%). So the terminal
rate can be 3-4%

al Value Formula FCFF of 5th Year *(1+g)/(WACC-g)

Ratios Mär.06 Mär.07 Mär.08 Mär.09
EPS (PAT/Shares Outstanding) 36.0 5.1 5.5 4.3
EPS Growth -86% 8% -22%
Net Worth 1045 1174 1305 1418
Book Value (Net Worth/Shares) 199.5 29.9 33.2 36.1
Sales/Share 144.4 23.9 27.5 22.6
Operating Cashflows
Operating Cashflow per share 0.0 0.0 0.0 0.0
DPS 10 1.4 1.8 1.2
Current Market Price 92.77 94.00 137.00 86.45
Debt (STB+LTB) 709 792 813 1019
Cash and Cash Equivalents 66 51 26 42
Net Debt (STB+LTB-Cash) 643 741 786 977
Market Capitalization (CMP*Shares) 486.0 3693.7 5383.4 3397.1
Number of Shares Oustanding 5.24 39.30 39.30 39.30
EV (Mcap+Net Debt) 1129 4435 6170 4374
Operating Revenues 756 939 1,080 889
EBITDA (Revenue-Op Exp) 250 338 405 229
EBIT (EBITDA-Dep) 210 296 360 174
Price to Earnings (CMP/EPS) 2.6 18.4 24.8 19.9
Price to Book Value (CMP/Book Value) 0.5 3.1 4.1 2.4
Price to Sales (Price/Sales per Share) 0.6 3.9 5.0 3.8
Price to Operating Cashflow #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Price to Earnings Growth (P/E Ratio/EPS Growth*100) -1.1 16.4 -4.0
Dividend Yield (DPS/CMP) 11% 1% 1% 1%
EV/Sales 1.5 4.7 5.7 4.9
EV/EBITDA 4.5 13.1 15.2 19.1
EV/EBIT 5.4 15.0 17.1 25.1

1.5 1.1 2.1 0.9 1.7 1.7 1.8
-66% -22% 90% -58% 86% 2% 5%
1417 2588 2635 2625 2648 2657 2687
36.1 45.3 46.1 45.9 46.3 46.5 47.0
19.7 18.0 19.3 19.8 21.5 23.1 24.8
216.93 133.61 221.99 246.71 210.62
0.0 0.0 3.8 2.3 3.9 4.3 3.7
1.2 0.9 1.1 0.9 1.1 1.1 1.1
121.10 80.80 85.60 55.30 72.85 107.15 104.85
1260 535 160 340 240 168 209
14 594 12 20 16 24 10
1246 -59 148 319 224 144 200
4758.6 4618.1 4892.5 3160.7 4163.7 6124.2 5992.7
39.30 57.16 57.16 57.16 57.16 57.16 57.16
6004 4559 5041 3480 4387 6268 6192
774 1,028 1,102 1,134 1,231 1,323 1,417
127 217 246 201 231 263 264
59 130 153 100 132 139 147
83.1 71.6 40.0 62.0 43.8 63.4 59.1
3.4 1.8 1.9 1.2 1.6 2.3 2.2
6.1 4.5 4.4 2.8 3.4 4.6 4.2
#DIV/0! #DIV/0! 0.39 0.41 0.33 0.43 0.50
-1.8 -3.6 1.0 -0.9 0.8 64.0 20.9
1% 1% 1% 2% 2% 1% 1%
7.8 4.4 4.6 3.1 3.6 4.7 4.4
47.1 21.0 20.5 17.3 19.0 23.9 23.4
101.1 35.2 33.0 34.8 33.3 45.2 42.2

Mär.06
Profitability Ratios
Gross Profit Ratio (GP/Sales) 77%
Return on Sales (PAT/Sales) 25%
Return on Assets (PAT/Assets) 9%
Return on Equity (PAT/Networth) 18%
Net Profit Ratio (NP/Sales) 25%
Liquidity Ratios
Current Ratio 1.6
Quick Ratio 1.5
Cash Ratio (Cash+Cash Equivalents+Invested Funds)/CL 0.2
Net Working Capital 184.4
Management Efficiency Ratios
Receivable Turnover (Sales/Avg Acc Receivable) 8.9
Average Days outstanding (Net sales/365) 2.1
Day Sales Outstanding (Trade Recevivables/Average) 41.2
Inventory Turnover (COGS/Avg Inventory) 3.9
Average inventory outstanding (COGS/365) 0.5
Days Inventory Outstanding (Inventory/Average) 92.5
Accounts Payable Turnover (COGS/Avg Acc Payable) 1.8
Average payables outstanding (COGS/365) 0.5
Days Payable Outstanding (Acc Payable/Average) 204.3
Operating Cycle (Acc Rec+Inventory) 133.8
Cash Conversion Cycle (Acc Rec+Inventory-Acc Pay) -70.5
Total Asset Turnover (Sales/Average Total Assets) 0.3
Leverage Ratios
Debt Ratio (Total Liabilities/Total Assets) (Provisions not included) 0.4
Equity Ratio (Total Equity/ Total Assets) 0.5
Debt-Equity Ratio (Total Liabilities/ Total Equity) (Provisions not included) 0.9
Times Interest Earned (EBIT/Interest Expense) 2.4

79% 79% 76% 70% 87% 86% 85% 85% 85%
21% 20% 19% 7% 6% 11% 4% 8% 7%
8% 9% 6% 2% 2% 4% 1% 3% 3%
17% 17% 12% 4% 2% 5% 2% 4% 4%
21% 20% 19% 7% 6% 11% 4% 8% 7%
1.3 1.1 1.8 1.3 1.5 0.6 0.5 0.6 0.7
1.2 1.0 1.6 1.2 1.4 0.5 0.5 0.5 0.6
0.1 0.1 0.1 0.0 1.1 0.1 0.0 0.0 0.1
135.3 18.8 223.1 120.5 250.3 -130.1 -224.7 -188.2 -143.0
9.3 9.4 9.6 7.8 8.2 7.8 6.5 7.2 7.0
2.6 3.0 2.4 2.1 2.8 3.0 3.1 3.4 3.6
39.4 38.7 37.9 46.8 44.6 46.8 55.9 50.5 52.0
6.4 6.7 7.2 7.7 4.1 4.7 4.9 4.7 4.9
0.5 0.6 0.6 0.6 0.4 0.4 0.5 0.5 0.5
56.6 54.2 51.0 47.7 88.7 78.1 73.9 76.9 73.8
2.2 2.0 1.5 2.4 2.5 3.0 2.5 2.5 2.5
0.5 0.6 0.6 0.6 0.4 0.4 0.5 0.5 0.5
163.5 178.4 242.5 151.5 145.8 119.8 146.3 144.1 144.4
96.0 92.8 88.9 94.4 133.4 124.8 129.7 127.4 125.9
-67.5 -85.5 -153.6 -57.0 -12.5 5.0 -16.5 -16.8 -18.5
0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.4 0.4
0.4 0.4 0.5 0.5 0.3 0.2 0.2 0.2 0.2
0.5 0.5 0.5 0.5 0.7 0.8 0.8 0.8 0.8
0.9 0.9 1.0 1.1 0.5 0.2 0.3 0.3 0.2
3.0 4.8 2.1 0.6 0.8 2.8 2.2 3.2 4.5

Mär.16
85%
7%
3%
4%
7%
0.6
0.5
0.0
-162.4
7.6
3.9
47.9
5.0
0.6
73.5
1.4
0.6
256.6
121.4
-135.2
0.4
0.2
0.8
0.2
6.7

Standlaone Profit and Loss
INCOME
Revenue From Operations [Gross] 1,084 1,545 1,765 1,620
Revenue From Operations [Net] 1,084 1,545 1,765 1,620
Total Operating Revenues 1,084 1,545 1,765 1,620
Total Revenue 1,151 1,645 1,824 1,716
EXPENSES
Cost Of Materials Consumed 68 80 93 99
Total Expenses 879 1,170 1,244 1,348
Exceptional Items 0 0 0 0
Less: MAT Credit Entitlement 0 0 0 0
Deferred Tax -2 84 2 9
Tax For Earlier Years 0 0 0 0
Prior Period Items 0 0 -4 -4
Extraordinary Items 0 0 0 -6
844 1,229 1,398 1,270
COGS 240 315 367 349
inventories

1,473 1,673 1,809 1,876 1,930 2,024 2,274
1,473 1,673 1,809 1,876 1,930 2,024 2,274
1,473 1,673 1,809 1,876 1,930 2,024 2,274
116 64 56 49 48 79 109
1,589 1,737 1,865 1,925 1,977 2,104 2,382
101 0 0 0 0 0 0
250 458 524 563 604 639 707
360 412 471 477 473 531 616
175 146 112 105 99 89 88
104 108 114 125 122 118 127
383 384 408 432 464 496 522
1,373 1,510 1,629 1,702 1,761 1,873 2,060
216 227 236 223 216 231 322
0 -6 -6 -433 -737 -229 -10
216 221 230 -210 -521 2 312
56 49 50 53 58 41 52
0 33 34 0 0 41 52
5 59 68 25 16 84 112
1 0 0 0 0 0 0
0 5 85 -11 -5 0 -1
62 80 145 67 70 84 111
154 141 145 -277 -590 -82 201
-3 0 0 0 0 0 0
2 0 0 0 0 0 0
153 141 145 -277 -590 -82 201
153 141 145 -277 -590 -82 201
1,123 1,215 1,285 1,313 1,326 1,386 1,567
350 458 524 563 604 639 707

Standalone Balance Sheet
SHAREHOLDER'S FUNDS
Money Received Against Share Warrants 0 0 0 0
Equity Share Application Money 2 2 20 0
Other Long Term Liabilities 0 0 0 0
CURRENT LIABILITIES
ASSETS
NON-CURRENT ASSETS
Fixed Assets 892 1472 1637 1801
CURRENT ASSETS
Current Investments 0 0 0 0
Inventories 26 29 33 39
Total Assets 2745 3352 3797 5478

72 76 76 81 81 81 99
72 76 76 81 81 81 99
2621 3029 3167 3227 2613 2534 3787
2621 3029 3167 3227 2613 2534 3787
0 124 124 0 0 0 0
2693 3229 3368 3308 2694 2615 3886
0 0 0 0 0 0 0
2636 1259 2040 2268 2154 2898 1558
171 28 96 96 107 191 303
0 23 83 75 77 585 485
0 567 585 674 581 27 49
2807 1876 2804 3113 2919 3702 2395
15 14 123 194 162 1 7
245 133 149 152 173 165 203
170 1326 790 343 633 634 942
700 142 131 117 185 81 129
1130 1615 1192 806 1153 881 1282
6631 6720 7364 7226 6766 7198 7562
1534 1710 1827 1745 1678 1989 2115
28 16 12 11 20 23 41
370 333 225 308 430 140 55
0 3 4 2 1 1 0
1931 2062 2068 2066 2129 2154 2212
2446 2409 3622 3369 2762 2546 2781
202 0
0 1255 1347 1441 1555 1440 1437
0 10 28 12 5 3 2
4580 5736 7065 6888 6450 6143 6432
0 617 0 0 0 432 136
31 32 40 38 40 43 45
122 104 125 125 124 139 161
447 90 23 49 43 356 22
1451 113 72 93 68 53 717
0 28 40 33 41 33 49
2051 984 299 338 316 1056 1130
6631 6720 7364 7226 6766 7198 7562

Mär.06
Revenue 1,084
Growth %
Total Expenses 879
Growth %
% of Revenue 81%
Depreciation 66
Growth %
Finance Costs 44
Growth %
Growth %
% of Revenue 71%
Growth %
EBITDA Margin 29%
Growth %
PAT 184
Growth %
PAT Margin 17%
Fixed Assets 892
Growth %
% of Revenue 82%
Current Assets 1183
Growth %
% of Revenue 109%
Growth %
% of Revenue 37%
Working Capital 781

1,545 1,765 1,620 1,473 1,673 1,809 1,876 1,930 2,024
42% 14% -8% -9% 14% 8% 4% 3% 5%
1,170 1,244 1,348 1,373 1,510 1,629 1,702 1,761 1,873
33% 6% 8% 2% 10% 8% 4% 3% 6%
76% 70% 83% 93% 90% 90% 91% 91% 93%
91 85 94 104 108 114 125 122 118
39% -7% 11% 10% 4% 5% 10% -2% -4%
6% 5% 5% 5% 5% 6% 6% 6% 5%
98 101 122 175 146 112 105 99 89
124% 3% 21% 44% -17% -24% -6% -6% -9%
981 1,057 1,131 1,093 1,255 1,403 1,471 1,540 1,666
27% 8% 7% -3% 15% 12% 5% 5% 8%
64% 60% 70% 74% 75% 78% 78% 80% 82%
564 708 489 380 418 406 404 389 359
79% 26% -31% -22% 10% -3% 0% -4% -8%
36% 40% 30% 26% 25% 22% 22% 20% 18%
152 199 125 62 80 145 67 70 84
73% 31% -37% -50% 28% 81% -54% 4% 21%
27% 28% 25% 16% 19% 36% 17% 18% 23%
322 377 234 153 141 145 -277 -590 -82
75% 17% -38% -35% -8% 3% -290% 113% -86%
21% 21% 14% 10% 8% 8% -15% -31% -4%
1472 1637 1801 1931 2062 2068 2066 2129 2154
580 165 163 131 130 7 -3 64 24
65% 11% 10% 7% 7% 0% 0% 3% 1%
95% 93% 111% 131% 123% 114% 110% 110% 106%
901 1164 1630 2051 984 299 338 316 1056
-24% 29% 40% 26% -52% -70% 13% -7% 234%
58% 66% 101% 139% 59% 17% 18% 16% 52%
550 699 527 1130 1615 1192 806 1153 881
37% 27% -25% 114% 43% -26% -32% 43% -24%
36% 40% 33% 77% 97% 66% 43% 60% 44%
351 465 1,103 921 -631 -893 -468 -837 174
-430 114 638 -182 -1552 -262 426 -370 1012
488 80 69 27 22 -107 -128 -59 -93
378 339 -319 491 1,889 671 60 770 -616

7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%
Upside/Downside
growth rate can
Years (t)
Discounted FCFF
Shares Outstanding
FCFF per share

2,274 2456 2652 2838 3036 3249
12% 8% 8% 7% 7% 7%
2,060 2246 2428 2588 2775 2969
10% 9% 8% 7% 7% 7%
91% 91% 92% 91% 91% 91%
127 145 153 164 177 188
8% 14% 5% 7% 8% 6%
6% 6% 6% 6% 6% 6%
88 92 90 90 91 90
-1% 4% -2% 0% 1% -1%
1,845 2,009 2,184 2,335 2,508 2,691
11% 9% 9% 7% 7% 7%
81% 82% 82% 82% 83% 83%
429 447 468 503 528 558
19% 4% 5% 8% 5% 6%
19% 18% 18% 18% 17% 17%
111 100 112 121 124 133
32% -10% 12% 8% 2% 7%
26% 22% 24% 24% 23% 24%
201 109 113 129 137 147
-345% -46% 3% 14% 7% 7%
9% 4% 4% 5% 5% 5%
2212 2570 2726 2882 3128 3328
58 359 155 157 245 201
3% 16% 6% 6% 9% 6%
97% 105% 103% 102% 103% 102%
1130 968 1249 1288 1335 1478
7% -14% 29% 3% 4% 11%
50% 39% 47% 45% 44% 45%
1282 1307 1354 1520 1597 1703
45% 2% 4% 12% 5% 7%
56% 53% 51% 54% 53% 52%
-152 -339 -105 -231 -263 -225
-326 -187 234 -126 -31 38
-69 213 2 -7 69 13
746 354 156 555 409 420 14620 Terminal Va

7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% Growth Rate
1 2 3 4 5 5
329 135 447 306 292 10184
11693
98.9
118.19
99.33
19%
rate can be 3-4%

EPS Growth -83% 14% -48%
Net Worth 1715 1797 2017 3048
Sales/Share 191.3 26.3 29.3 22.4
Operating Cashflows
DPS 13 1.6 1.9 1.2
Debt (STB+LTB) 544 944 1134 1766
Net Debt (STB+LTB-Cash) 454 877 1060 1743
EV (Mcap+Net Debt) 1163 8735 7803 4594
Operating Revenues 1,084 1,545 1,765 1,620
EBIT (EBITDA-Dep) 249 472 622 394
Price to Earnings Growth (P/E Ratio/EPS Growth*100) -1.6 8.0 -0.8
EV/Sales 1.07 5.65 4.42 2.84
EV/EBITDA 3.7 15.5 11.0 9.4
EV/EBIT 4.7 18.5 12.5 11.7

2.1 1.9 1.9 -3.4 -7.3 -1.0 2.0
-35% -12% 3% -279% 113% -86% -300%
2693 3229 3368 3308 2694 2615 3886
37.2 42.5 44.3 41.0 33.4 32.4 39.3
20.4 22.0 23.8 23.2 23.9 25.1 23.0
448.62 332.02 367.86 399.78 431.95
0.00 0.00 5.91 4.11 4.56 4.95 4.37
1 1 1 0.8 0 0 0
102.55 84.20 63.85 53.50 72.30 116.85 99.30
2651 1273 2163 2462 2315 2899 1566
447 90 23 49 43 356 22
2203 1182 2140 2413 2272 2543 1543
7419.2 6394.8 4849.2 4320.0 5838.0 9435.3 9823.5
72.35 75.95 75.95 80.75 80.75 80.75 98.93
9623 7577 6989 6733 8110 11979 11367
1,473 1,673 1,809 1,876 1,930 2,024 2,274
380 418 406 404 389 359 429
276 310 292 279 267 241 301
48.5 45.3 33.4 -15.6 -9.9 -115.0 48.9
2.8 2.0 1.4 1.3 2.2 3.6 2.5
5.0 3.8 2.7 2.3 3.0 4.7 4.3
#DIV/0! #DIV/0! 0.14 0.16 0.20 0.29 0.23
-3.0 -7.0 22.0 -0.2 0.6 -1.4 -0.3
1% 1% 2% 1% 0% 0% 0%
6.53 4.53 3.86 3.59 4.20 5.92 5.00
25.3 18.1 17.2 16.6 20.8 33.4 26.5
34.8 24.4 23.9 24.1 30.4 49.7 37.7

Mär.06
Liquidity Ratios
Current Ratio 2.9
Quick Ratio 2.9
Accounts Payable Turnover (COGS/Avg Acc Payable) 1.8
Cash Conversion Cycle (Acc Rec+Inventory-Acc Pay) -134.5
Leverage Ratios

80% 79% 78% 76% 73% 71% 70% 69% 68%
21% 21% 14% 10% 8% 8% -15% -31% -4%
10% 10% 4% 2% 2% 2% -4% -9% -1%
18% 19% 8% 6% 4% 4% -8% -22% -3%
21% 21% 14% 10% 8% 8% -15% -31% -4%
1.6 1.7 3.1 1.8 0.6 0.3 0.4 0.3 1.2
1.6 1.6 3.0 1.8 0.6 0.2 0.4 0.2 1.1
0.1 0.1 0.0 0.4 0.4 0.0 0.1 0.0 0.9
351.2 465.0 1103.1 920.6 -631.2 -893.3 -467.8 -837.4 174.5
12.1 12.7 15.9 12.1 16.1 14.5 15.0 15.5 14.6
4.2 4.8 4.4 4.0 4.6 5.0 5.1 5.3 5.5
30.1 28.6 22.9 30.1 22.7 25.2 24.4 23.5 25.0
10.9 11.2 9.0 11.2 14.4 13.2 14.7 15.0 14.8
0.9 1.0 1.0 1.0 1.3 1.4 1.5 1.7 1.7
33.6 32.7 40.6 32.6 25.4 27.7 24.9 24.3 24.7
1.7 2.5 2.0 1.4 3.4 3.5 3.7 3.5 3.9
0.9 1.0 1.0 1.0 1.3 1.4 1.5 1.7 1.7
219.1 147.9 185.7 255.6 106.3 103.7 98.9 104.9 94.6
63.7 61.3 63.6 62.7 48.0 52.9 49.3 47.8 49.7
-155.5 -86.6 -122.1 -192.9 -58.3 -50.8 -49.7 -57.0 -44.9
0.5 0.5 0.3 0.2 0.2 0.2 0.3 0.3 0.3
0.4 0.5 0.4 0.5 0.4 0.4 0.4 0.5 0.6
0.5 0.5 0.6 0.4 0.5 0.5 0.5 0.4 0.4
0.8 0.8 0.7 1.2 0.9 1.0 0.9 1.2 1.7
4.8 6.1 3.2 1.6 2.1 2.6 2.7 2.7 2.7

Mär.16
69%
9%
3%
5%
9%
0.9
0.8
0.1
-151.9
14.1
6.2
25.9
15.7
1.9
23.3
3.5
1.9
105.0
49.2
-55.9
0.3
0.5
0.5
0.9
3.4

Standalone Income Statement
INCOME
Revenue From Operations [Gross] 153 232 353 393
Revenue From Operations [Net] 153 232 353 393
Other Operating Revenues 0 0 0 0
Total Operating Revenues 153 232 353 393
Total Revenue 156 239 373 444
EXPENSES
Total Expenses 123 173 247 312
Exceptional Items 0
Deferred Tax 11 10 4 6
148 226 345 382
COGS 5 7 8 11
inventories

469 487 574 659 730 734 885
469 487 574 659 730 734 885
0 0 0 0 47 61 67
469 487 574 659 778 795 952
47 47 63 57 21 13 11
516 534 637 716 799 808 963
16 0 0 0 0 0 0
74 85 126 150 174 162 192
1 0 0 2 1 0 0
19 20 20 21 38 65 71
230 280 344 385 444 453 528
339 385 491 557 658 681 791
177 149 146 159 141 127 172
0 0 0 -22 0
177 149 146 159 141 105 172
55 43 41 47 29 19 50
4 3 0 5 18 7 5
0 0
59 47 41 52 47 26 55
118 103 105 107 95 79 117
118 103 105 107 95 79 117
118 103 105 107 95 79 117
453 487 574 659 778 795 952
16 0 0 0 0 0 0

Standalone Balance Sheet
SHAREHOLDER'S FUNDS
Preference Share Capital 0 0 0 0
Revaluation Reserves 0 0 0 0
Money Received Against Share Warrants 0 0 0 0
Employees Stock Options 0 0 0 0
Equity Share Application Money 0 0 0 0
Government/Other Grants 0 0 0 0
Other Long Term Liabilities 0
CURRENT LIABILITIES
ASSETS
NON-CURRENT ASSETS
Fixed Assets 163 200 270 409
CURRENT ASSETS
Current Investments 0 0 0 0
Inventories 1 2 3 5

Total Assets 352 477 742 1006

83 84 84 84 88 88 88
0 0 0 0 0 0 0
83 84 84 84 88 88 88
0 0 0 0 0 0 0
356 420 485 550 702 643 604
356 420 485 550 702 643 604
0 0 0 0 0 0 0
0 0 0 0 0 0 0
439 503 569 634 790 731 692
0 0 0 0 0 0 0
0 1028 1123 0 0 0 0
0 0 0 0 0 0 0
34 37 37 41 59 60 66
0 1259 1400 1514 1689
0 1 1 4 4 5 7
34 38 38 1304 1463 1579 1763
10 2 1 2 3 6 0
142 64 85 77 92 114 126
806 83 117 185 221 241 266
41 40 40 42 42 43 54
999 188 243 306 358 404 446
1473 1757 1973 2244 2611 2714 2901
395 438 439 449 667 773 902
11 2 2 3 23 22 16
98 135 184 231 64 64 33
0 0 12 21 5 7 4
505 575 636 705 758 868 954
227 32 82 176 146 142 80
1 0
0 74 129 151 177 196 173
0 445 363 330 384 437 515
733 1126 1211 1361 1465 1642 1722
0 113 126 10 13 10 58
3 3 4 6 10 5 6
632 438 518 626 843 870 992
24 63 8 34 39 17 28
81 13 104 198 221 154 84
0 1 1 9 20 16 12

740 631 762 883 1146 1072 1179
1473 1757 1973 2244 2611 2714 2901

Mär.06
Revenue 153
Growth %
Total Expenses 123
Growth %
% of Revenue 80%
Depreciation 8
Growth %
Finance Costs 1.93
Growth %
Growth %
% of Revenue 74%
Growth %
EBITDA Margin 26%
Growth %
PAT 21
Growth %
PAT Margin 14%
Fixed Assets 163
Growth %
% of Revenue 107%
Current Assets 180
Growth %
% of Revenue 118%
Growth %
% of Revenue 34%
Working Capital 129

232 353 393 469 487 574 659 778 795
52% 52% 11% 19% 4% 18% 15% 18% 2%
173 247 312 339 385 491 557 658 681
41% 43% 26% 9% 13% 28% 13% 18% 4%
74% 70% 79% 72% 79% 86% 85% 85% 86%
9 11 17 19 20 20 21 38 65
14% 27% 48% 14% 5% 1% 4% 79% 72%
4% 4% 4% 4% 3% 3% 3% 5% 8%
1.36 0.89 4.28 1.16 0.16 0.35 1.60 0.97 0.25
-30% -35% 381% -73% -86% 119% 357% -39% -74%
163 235 291 319 365 470 534 619 615
44% 44% 24% 10% 14% 29% 14% 16% -1%
70% 67% 74% 68% 75% 82% 81% 80% 77%
70 118 102 150 123 103 124 159 180
76% 69% -14% 47% -18% -16% 20% 28% 13%
30% 33% 26% 32% 25% 18% 19% 20% 23%
25 45 48 59 47 41 52 47 26
95% 84% 7% 21% -21% -12% 27% -10% -45%
35% 39% 48% 39% 38% 40% 42% 29% 14%
42 81 83 118 103 105 107 95 79
100% 93% 4% 41% -13% 2% 2% -12% -16%
18% 23% 21% 25% 21% 18% 16% 12% 10%
200 270 409 505 575 636 705 758 868
37 70 139 95 70 61 68 53 110
23% 35% 51% 23% 14% 11% 11% 8% 14%
86% 77% 104% 108% 118% 111% 107% 97% 109%
277 471 595 740 631 762 883 1146 1072
53% 70% 26% 24% -15% 21% 16% 30% -6%
119% 134% 151% 158% 130% 133% 134% 147% 135%
58 577 777 999 188 243 306 358 404
13% 887% 35% 29% -81% 29% 26% 17% 13%
25% 163% 198% 213% 39% 42% 47% 46% 51%
219 -105 -183 -259 443 519 577 788 668
90 -324 -77 -77 702 76 58 211 -119
28 59 122 76 50 41 47 15 44
-70 342 16 99 -669 -46 -24 -103 238

10.6% 10.6% 10.6% 10.6% 10.6% 10.6% 10.6% 10.6% 10.6%
Upside/Downside
growth rate can
Years (t)
Discounted FCFF
Shares Outstanding
FCFF per share

952 952 952 952 952 952
20% 18% 18% 7% 19% 19%
791 803 803 799 802 801
16% 2% 0% 0% 0% 0%
83% 84% 84% 84% 84% 84%
71 65 71 69 69 70
9% -9% 10% -3% -1% 2%
7% 7% 7% 7% 7% 7%
0.08 0.43 0.25 0.26 0.31 0.27
-68% 442% -41% 1% 23% -13%
719 738 731 729 733 731
17% 3% -1% 0% 0% 0%
76% 78% 77% 77% 77% 77%
232 214 220 222 219 220
29% -8% 3% 1% -2% 1%
24% 22% 23% 23% 23% 23%
55 48 44 49 47 47
111% -12% -8% 10% -4% -1%
24% 22% 20% 22% 22% 21%
117 100 104 104 103 103
49% -15% 4% -1% -1% 1%
12% 11% 11% 11% 11% 11%
954 973 989 972 978 980
86 19 15 -17 6 2
10% 2% 2% -2% 1% 0%
100% 102% 104% 102% 103% 103%
1179 1288 1250 1239 1259 1249
10% 9% -3% -1% 2% -1%
124% 135% 131% 130% 132% 131%
446 456 462 455 457 458
10% 2% 1% -2% 1% 0%
47% 48% 49% 48% 48% 48%
733 832 788 784 802 791
65 99 -44 -4 17 -10
15 -46 -56 -86 -63 -68
115 126 290 278 232 267 5002 Terminal Va

10.6% 10.6% 10.6% 10.6% 10.6% 10.6% 10.6% Growth Rate
1 2 3 4 5 5
114 237 206 155 161 3023
3896
8.8
442.43
386.85
14%
rate can be 3-4%

EPS Growth 100% -28% 3%
Net Worth 46 78 142 198
Sales/Share 53.8 81.8 46.2 51.1
Operating Cashflows
DPS 0 3 3 3
Debt (STB+LTB) 249 326 20 25
Net Debt (STB+LTB-Cash) 241 318 13 -7
EV (Mcap+Net Debt) 1142 1219 2437 2434
Operating Revenues 153 232 353 393
EBIT (EBITDA-Dep) 32 61 107 85
Price to Earnings Growth (P/E Ratio/EPS Growth*100) 3.2 -11.2 111.8
EV/Sales 7.48 5.25 6.91 6.19
EV/EBITDA 28.90 17.49 20.67 23.87
EV/EBIT 35.95 20.04 22.86 28.55

14.1 12.3 12.5 12.8 10.7 9.0 13.3
31% -13% 2% 2% -16% -16% 48%
439 503 569 634 790 731 692
52.7 60.2 67.8 75.6 89.7 83.0 78.6
56.3 58.3 68.4 78.5 88.3 90.3 108.1
189.89 212.88 31.77 269.09 118.60
0.0 0.0 22.6 25.4 3.6 30.6 13.5
4 4 4 4 4 4 5
543.85 353.35 301.60 257.00 232.35 257.05 386.85
10 2 1 2 3 6 0
24 63 8 34 39 17 28
-14 -61 -8 -32 -36 -10 -28
4529.7 2954.4 2528.9 2155.7 2045.1 2262.8 3406.6
8.329 8.361 8.385 8.388 8.802 8.803 8.806
4515 2893 2521 2124 2009 2253 3379
469 487 574 659 778 795 952
150 123 103 124 159 180 232
131 102 83 103 121 114 161
38.4 28.8 24.2 20.2 21.6 28.6 29.0
10.3 5.9 4.4 3.4 2.6 3.1 4.9
9.7 6.1 4.4 3.3 2.6 2.8 3.6
#DIV/0! #DIV/0! 1.6 1.2 7.3 1.0 3.3
17.8 -26.9 196.1 116.8 -14.7 -15.7 8.0
1% 1% 1% 2% 2% 2% 1%
9.63 5.94 4.39 3.23 2.58 2.83 3.55
30.12 23.62 24.37 17.09 12.64 12.53 14.54
34.52 28.25 30.33 20.61 16.61 19.69 20.97

Mär.06
Liquidity Ratios
Current Ratio 3.5
Quick Ratio 3.5
Accounts Payable Turnover (COGS/Avg Acc Payable)
Cash Conversion Cycle (Acc Rec+Inventory-Acc Pay) 416.9
Leverage Ratios

97% 98% 97% 97% 100% 100% 100% 100% 100%
18% 23% 21% 25% 21% 18% 16% 12% 10%
9% 11% 8% 8% 6% 5% 5% 4% 3%
54% 57% 42% 27% 20% 18% 17% 12% 11%
18% 23% 21% 25% 21% 18% 16% 12% 10%
4.7 0.8 0.8 0.7 3.4 3.1 2.9 3.2 2.7
4.7 0.8 0.8 0.7 3.3 3.1 2.9 3.2 2.6
0.1 0.0 0.0 0.0 0.9 0.6 0.1 0.1 0.1
218.5 -105.4 -182.5 -259.1 443.2 518.8 576.7 787.7 668.3
1.1 0.9 0.8 0.7 1.1 1.1 1.1 0.9 0.9
0.6 1.0 1.1 1.3 1.3 1.6 1.8 2.1 2.2
343.7 417.5 449.6 491.8 328.1 329.5 347.0 395.9 399.7
3.7 2.4 2.1 5.3 0.0 0.0 0.0 0.0 0.0
0.02 0.02 0.03 0.04 0.0 0.0 0.0 0.0 0.0
97.6 153.8 172.3 69.5
0.1 0.0 0.0 0.0 0.0 0.0
0.02 0.02 0.03 0.04 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 3328.29
441.2 571.2 621.9 561.2 328.1 329.5 347.0 395.9 399.7
441.2 571.2 621.9 -2767.0 328.1 329.5 347.0 395.9 399.7
0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.3 0.3
0.8 0.8 0.8 0.7 0.1 0.1 0.7 0.7 0.7
0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3
5.0 4.1 3.9 2.3 0.4 0.4 2.5 2.2 2.6
44.7 119.8 19.9 112.8 640.1 237.5 64.4 124.7 457.6

Mär.16
100%
12%
4%
17%
12%
2.6
2.6
0.2
732.8
1.0
2.6
380.5
0.0
0.0
0.0
0.00
380.5
380.5
0.3
0.7
0.2
3.1
2013.6

Company Profiles
Indian Hotels Company
EIH Limited
Mahindra Holidays and Resorts India Limited
Discounted Cash Flow Valuation Analysis
 Revenue Growth: The revenue growth of the companies have been assumed as fo
o Indian Hotels Company: A growth rate of 8% has been assumed or FY17 and
o EIH Limited: A growth rate of 7.5% has been assumed for FY17 and FY18, 7
o Mahindra Hotels and Resorts India Limited: A growth rate of 18% has been assum
 The other financials are based on the revenue and the average of the last three y
 WACC (Weighted Average Cost of Capital) for the companies is taken as follows:
o Indian Hotels Company: 7.5%
o EIH Limited: 8.5%
o Mahindra Hotels and Resorts India Limited: 10.6%
 The Indian Hospitality industry is growing at 7% and the GDP growth is 7.6%. The
 After calculating the value of the company the following recommendation can be
 Investors are recommended to BUY the stock of Indian Hotels Company with a targ
 Investors are recommended to BUY the stock of EIH Limited with a target of Rs12
 Investors are recommended to BUY the stock of Mahindra Holidays with a target
Relative Valuation
Analysis
I dia Hotels Co pa a d its su sidia ies olle ti el k o as Taj G oup of Hotels, o ed Tata G oup
company was incorporated in 1903 and completed a century in 2003. It has 100 hotels in 62
Maldives, Malaysia, the UK, USA, Bhutan, Sri Lan
EIH Limited backed by the Oberoi Group, operates hotels and cruisers in five countries und
1934 and is also engaged in flight catering, airport restaurants, travel and tour serv
Mahindra Holidays & Resorts India Ltd., (MHRIL) is a part of the Leisure and Hospitality secto
a d Clu Mahi d a Holida s a d toda has a fast g o i g usto e ase of o e , e e s a d
India and abroad.
Price to Earnings: The ratio tells how much investors are willing to pay per rupee of earnings. A h
is currently undervalued and can be a good investment opportunity for the investors. Indian Ho
invest in Mahindra Holidays than EIH and Indian Hotels Company.

EV/Sales: EV-to-sales gives investors a quantifiable metric of how much it costs to purchase the c
prospects are not very attractive. EV-to-sales values usually are between 1 and 3. Indian Hote
Hotels Company will greatly increase in the future.
EV/EBITDA: EV-to-EBITDA is a valuation multiple which gives the value of the company along w
indicates that the company might be overvalued. Indian Hotels Company, EIH Limited and Mah
all the companies.
EV/EBIT: EV-to-EBIT is a aluatio ultiple hi h a s e s the uestio What is a o pa ei g alued pe e
Limited and Mahindra Holidays have EV/EBIT multiple of 37.7, 42.2, 20.97 respectively in 201
Price to Earnings Growth: The ratio is a valuation metric for determining the relative trade-off betw
the sto k i a o da e ith the sto k s u e t esti ated EP“ g o th. If the atio is less tha the sto k s EP
aluatio a d the sto k is o e alued. I dia Hotels Co pa , EIH Li ited a d Mahi d a Holida s ha e a P/E
Price to Sales: The P/S ratio measures the price of a company's stock against its annual sales. P
company is overvalued. Indian Hotels Company, EIH Limited and Mahindra Holidays have a P/
Price to Cash Flow: This ratio compares the stock's market price to the amount of cash flow the c
a high price but is not generating enough cash flows to support its operations. Indian Hotels Co
Dividend Yield Ratio: The dividend yield is a financial ratio that measures the amount of cash di
companies with low dividend yield and for investors who are looking for dividend as a regular
are looking for capital appreciation can invest in these companies. This is because every rupee
Price to Book Value: This ratio tells how many times a company's stock is trading per share co
Company, EIH Limited and Mahindra Holidays have a P/B of 2.5, 2.2 and 4.9 respectively in 20

ed as follows:
r FY17 and FY18 and 7% for FY19, FY20 and FY21.
FY18, 7% for FY19 and 6% for FY20 and FY21.
as been assumed for FY17 and FY18, 7% for FY19 and 19% for FY20 and FY21.
ree years.
ws:
. The hospitality industry is growing marginally below GDP growth rate so a terminal growth rate between 4-5%
an be given for each of the companies:
a target of Rs118.19 and an upside of 19% on the current market price (31/3/2016).
f Rs127.75 and an upside of 22% on the current market price (31/3/2016).
target of Rs442.43 and an upside of 14% on the current market price (31/3/2016).
f Hotels, o ed Tata G oup is o e of the Asia s la gest a d fi est g oup of hotels. The
ls in 62 locations across India and its international presence includes 15 hotels in the
tan, Sri Lanka, Africa and the Middle East.
tries under the luxury 'Oberoi' and five-star 'Trident' brands. Its history dates back to
r services, car rentals, project management and corporate air charters.
sector of the Mahindra Group. It started its operations in 1996 with its flagship
of o e , e e s a d 6 eautiful eso ts at so e of the ost e oti lo atio s i
abroad.
ings. A high P/E ratio means that the investors are expecting higher earnings from the company when compared
ian Hotels Company, EIH Limited and Mahindra Holidays have a P/E of 48.9, 59.1 and 29 respectively in 2016

ase the company's sales. A high EV-to-sales can be a sign that investors believe the future sales will greatly increase. A lo
Hotels Company, EIH Limited and Mahindra Holidays have EV/Sales multiple of 5, 4.4, 3.55 respectively in 20
ng with the debt of the company. It is a common ratio which is used for valuation of takeovers. A low ratio ind
Mahindra Holidays have EV/EBITDA multiple of 26.5, 23.4, 14.54 respectively in 2016. This indicates that M
a o pa ei g alued pe ea h upee of EBIT? A high ultiple ea s the o pa is o e alued a d lo ultiple ea s the o
in 2016. It is costlier to takeover Indian Hotels Company and EIH Limited when compared to Mahindra Holidays
e-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growt
io is less tha the sto k s EP“ g o th ill su pass a ket s aluatio a d the sto k is u de alued. If the atio is g eate tha the
Mahi d a Holida s ha e a P/E G o th of . , . a d espe ti el i 6. I dia Hotels Co pa s sto k is u de alued hile the
al sales. P/S reflects how many times investors are paying for every rupee of a company's sales. A lower ratio means the
a P/S of 4.3, 4.2 and 3.6 respectively in 2016.
f cash flow the company generates on a per-share basis. A smaller ratio is considered better than a higher multiple. This is becau
tels Company, EIH Limited and Mahindra Holidays have a P/B of 0.23, 0.50 and 3.3 respectively in 2016.
f cash dividends distributed to common shareholders relative to the market value per share. Investors who are
a regular income will prefer companies with high dividend yield. Indian Hotels Company, EIH Limited and Mahind
rupee that is not distributed as dividend is used for the growth of the company.
per share compared to the company's book value per share. A lower P/B ratio is considered good for investment as
in 2016. By considering the P/B ratio investors are recommended to invest in EIH than Indian Hotels Compan

n 4-5% can be assumed for each of the companies.
mpared to companies with lower P/E. A lower P/E means the company
in 2016. By considering the P/E ratio investors are recommended to

reatly increase. A lower EV-to-sales can signal that the future sales
in 2016. This indicates that the investors believe that the sales of Indian
ratio indicates that a company might be undervalued, and a high ratio
that Mahindra Holidays can be a potential target for a takeover among
d lo ultiple ea s the o pa is u de alued. I dia Hotels Co pa , EIH
lidays.
ed growth. If the ratio is 1 it means that the market is correctly valuing
he atio is g eate tha the the sto k s EP“ g o th is less tha the a ket s
sto k is u de alued hile the othe t o a e o e alued.
r ratio means the company is undervalued and a high ratio means the
ltiple. This is because a high P/CF ratio would mean the firm is trading at
are looking for a capital appreciation as the main return will prefer
ahindra Holidays have a dividend yield of 0-1% in 2016. Investors who
ent as the stock is undervalued and it is good to invest. Indian Hotels
pany and Mahindra Holidays.

Valuation of Indian hospitality industry

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