Asian Hotels expects revenues to treble in two-years

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Asian Hotels expects revenues to treble in two-years

In an interview with CNBC-TV18, Sushil Gupta, managing director of Asian Hotels, spoke about the results and his outlook for the company.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Asian Hotels See previous management interviews See what other Experts & Brokerages are saying about Asian Hotels Asian Hotels BSE | NSE 30/05/12 Are Mutual Funds betting on Asian Hotels?

In an interview with CNBC-TV18, Sushil Gupta, managing director of Asian Hotels , spoke about the results and his outlook for the company.

Below is a verbatim transcript of the interview. Also watch the video.

Q: Could you walk us through properties and assets that Asian Hotels West owns and how you value them?

A: Asian Hotels (West) owns a property in Mumbai, Hyatt Regency which is a 400 room hotel and in addition through its subsidiary Aria it is developing a 525 room JW Marriott at Delhi Airport near the terminal T3 that is the new development which is coming. So by year ending 2013, our revenue will grow almost three-fold.

Currently, we expect from 2010-11 from Mumbai property revenue of Rs 135 crore with operating profit of around Rs 62-63 crore. The new hotel will open in 2012 that is the major development which is happening. The entire financial tie up for the new property is already there and IL&FS has also invested some equity in our subsidiary Aria Hotels which is developing the JW Marriott in Delhi.

Q: How is the Mumbai hotel doing, the Hyatt Regency in terms of room rates and occupancy ratios now?

A; Last quarter it did about 67% occupancy at room rate around Rs 9000.

Q: Actually 67% seems to be a bit on the lower side compared to the kind of occupancies that hotels are seeing across the country?

A: Not in April-June. April to September is a low season for the hotel industry and October- March is the high season, so if you ask me 67% is a good number. Especially in the last quarter if you compare in the last year was 63%, so there is a growth, I think it's a good number.

Q: For this year then what is it that you expect Asian Hotels to post in terms of revenues?

A: Revenue of about Rs 135 crore.

Q: On what kind of margins would that be?

A: With an operating profit of Rs 62-63 crore and EBITDA should be around Rs 50 crore.

Q: What is the balance sheet of Asian Hotels (West) like, how much debt are you sitting on?

A: there is hardly any debt; overall we do have a Rs 100 crore debenture which we raised for the investment in the due project and the other properties we are looking at. If I talk pure debt basis then that is just Rs 45 crore but at the same time we have investments we have assets.

Q: And you don't see Asian Hotels (West) diluting its sake in Aria to less than 66% for any other capital needs by the time it gets operational?

A: No not at all, we are totally tied up; the entire financial tie up is there, there is no need to further dilute it.