Hotel Leela

Hotel Leela was up in the green yesterday, reacting to the news that Competition Commission of India (CCI) has approved the Rs 725 crore slump sale deal of the Hotel, to sell off their Goa resort hotel to Malaysian company, Met Tube. This deal was already signed up in Sept’15. But its cup of woes continues to remain full, mainly on account of its debt and higher operating costs.

For Q2FY16, the company posted a 5% (YoY) rise in net revenue earned but costs at Rs.200 crore made losses a certainty. Further the interest outgo of Rs.22 crore pushed it further into the red. The company ended the quarter with a net loss of Rs.56 crore, the only silver lining being that it was lower than previous Q2 loss of Rs.160 crore. Loss for H1Fy16 stood at Rs.113 v/s Rs.260 crore (YoY). Its debt stands at around Rs.5000 crore and it looks like it could take a while to get back firmly on its feet. The CMD of the company in a TV interview recently said that occupancy in hotels were up in current Q3 owing to better tourist arrivals as also upswing in business prospects. Lets see if that gets translated into better numbers for Hotel Leela.