Manac_ Group 8_Profitability Problem-Viceroy Hotels Limited

7/30/2019 Manac_ Group 8_Profitability Problem-Viceroy Hotels Limited

1/19

Profitability problem:Viceroy Hotels

Sarabjot Singh 12P043

Saurabh Mishra 12P044

Vineet Gupta 12P045

Swapnil Sheth 12P046

Shrey Tandon 12P047

Shrimoy Tripathy 12P048


2/19

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


3/19

Introduction

Viceroy

Hotels

LuxuryHotels

BusinessHotels

Restaurants F & B Retail


4/19

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


5/19


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


6/19


ROE = PATNet Worth

Managements ability to employ equity profitably

Operating ratio = Total Operating ExpenseSales

It the expense incurred for every unit sale.


7/19

0

10

20

30

40

50

60

70

20112010200920082007

EBIT/SALES

Viceroy

IHC

Asian

EIH

Leela

Operating Profit Ratio

%


8/19

0

10

20

30

40

50

60

70

80

90

100

20112010200920082007

Operating ratio = operating expense/SALES

Viceroy

IHC

LEELA

Asian

EIH

Operating Ratio

%


9/19

-10

-5

0

5

10

15

20

25

30

35

20112010200920082007

PAT/SALES

Viceroy

IHC

LEELA

Asian

EIH

Net Profit Ratio

%


10/19

-5

0

5

10

15

20

25

30

20112010200920082007

ROI

Viceroy

IHC

Asian

EIH

Leela

ROI

%


11/19

-10

-5

0

5

10

15

20

25

30

20112010200920082007

ROE

Viceroy

IHC

Asian

EIH

Leela

ROE

%


12/19

-3

-2

-1

0

1

2

3

4

5

6

7

20112010200920082007

EPS

Viceroy

IHC

EIH

Leela

EPS


13/19

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


14/19

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


15/19

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


16/19

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.


17/19

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


18/19

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/


19/19

THANK YOU!!

Documents

Manac_ Group 8_Profitability Problem-Viceroy Hotels Limited