Hotel Leela
The company is showing an increasing topline – for Q4FY14 it rose 10% (YoY) at Rs.222 crore and it even posted an operating profit of Rs.27 crore v/s loss of Rs.208 crore in previous Q4. But the gargantuan interest cost did it in. The interest outgo for the quarter was at Rs.126 crore and for the entire fiscal, consolidated finance cost was at Rs.502 crore, which was 70% of the net sales for the fiscal. Thus it comes as no surprise to see that it ended Q4Fy14 with a net loss at Rs.57 crore – the good part is that the loss is lower than the loss of Rs.100 crore in Q3 and loss of Rs.142 crore in previous Q4. But then, this fall in loss is all thanks to the write back of deferred tax to the tune of Rs.50 crore. But for this w/b of tax, the loss would actually have come around the same levels, Rs.107 crore. It ended the fiscal with a consolidated net loss at Rs.441 crore v /s loss of Rs.433 crore in FY13.
The company is currently trying its level best to cut down it debt so that interest costs will come down and it can actually return back to the black. Its total borrowings as at 31st March 2014 stood at Rs.3101 crore, which has gone up from Rs.3048 crore at end of FY13. The company is a part of a CDR process and in the process of hiving off its majority stake in its Delhi and Chennai hotels but is not finding takers at the right price due to poor macro economic consitions. It hopes to raise around Rs.2000 crore from the same. If one may recollect, it had sold its Kovalam beach hotel in Kerala for Rs 500 crore in 2011 and its Chennai business park for Rs 172 crore in 2012. Recently talks with the PE fund, KKR for a bridge loan of Rs.2000 crore @interest rate of 18% fell off and the company is back at looking around for buyers. Any news of its property sale will be the big trigger for this stock in the near future.