Bharat Hotel Ltd Unlisted Shares

Are you looking to invest in a premier Indian luxury hotel chain with a pan-India presence and an iconic brand? Bharat Hotels Limited , which operates the renowned The LaLiT brand, is one of India’s leading privately-owned domestic hotel chains. With a portfolio of luxury hotels, palaces, and resorts across key business and leisure destinations, the company has demonstrated remarkable resilience and a strong financial recovery post-COVID.

From the historic The LaLiT Grand Palace Srinagar to the vibrant The LaLiT Mumbai and the iconic The LaLiT New Delhi , Bharat Hotels offers a unique opportunity to own a stake in India’s luxury hospitality story.

Company Overview: A Legacy of Luxury

• Founded: 1981 by the late Lalit Suri.

• Position: One of India’s leading privately-owned domestic hotel brands (as per CRISIL Report).

• Focus: Luxury segment, with a presence in key business and leisure destinations.

• Global Presence: Also holds exclusive rights to provide management consultancy for The LaLiT London (70 rooms).

Portfolio: The LaLiT Brand – A Mix of Heritage & Modern Luxury

As of March 31, 2018, Bharat Hotels operated 12 luxury hotels, palaces, and resorts under The LaLiT brand, and 2 mid-market hotels under The LaLiT Traveller brand, offering a total of 2,261 rooms.

The LaLiT Luxury Hotels (Three Categories)

1. City Hotels:

• The LaLiT New Delhi

• The LaLiT Mumbai

• The LaLiT Ashok Bangalore

• The LaLiT Great Eastern Kolkata (a historic property)

• The LaLiT Jaipur

• The LaLiT Chandigarh

2. Palaces:

• The LaLiT Laxmi Vilas Palace Udaipur

• The LaLiT Grand Palace Srinagar

3. Resorts:

• The LaLiT Golf & Spa Resort Goa

• The LaLiT Resort & Spa Bekal (Kerala)

• The LaLiT Mangar (near Delhi)

• The LaLiT Temple View Khajuraho

The LaLiT Traveller (Mid-Market Segment)

• The LaLiT Traveller Jaipur

• The LaLiT Traveller Khajuraho

Food & Beverage (F&B) Brands

The company has also developed its own successful F&B brands, operating 45 restaurants, bars, and bakery outlets across its hotels. Key brands include:

• 24/7 (All-day dining)

• Baluchi (Indian cuisine)

• OKO (Pan-Asian)

• The LaLiT Boulangerie (Bakery)

• Kitty Su (Premier nightclub brand)

• The LaLiT Food Truck Company

Future Expansion Plans: Scaling the Brand

Bharat Hotels has a clear roadmap for growth, with new properties and room expansions planned.

Upcoming The LaLiT Properties:

• Ahmedabad: 290 rooms + 115 cottages

• Mangalore

• Dehradun

Expansion at Existing Properties:

• The LaLiT Laxmi Vilas Palace Udaipur: 50 additional rooms planned.

Upcoming The LaLiT Traveller Properties:

• Ahmedabad

• Pune

• Amritsar

• Chitrakoot

• Total: 308 additional rooms across these four properties.

The COVID Challenge: Resilience in Action

FY19-20: The Onset of the Pandemic

• Business was severely impacted from January 2020 onwards due to COVID-19.

• The company faced liquidity issues as fixed costs remained high while revenue declined.

• Adaptation Measures:

  • Accommodated doctors on COVID-19 duty (paid by the government).

  • Started home delivery of bakery, confectionery, and gourmet hampers.

  • Explored digital channels for services like Ayurveda consultancy, wellness packages, “chef at home,” and “Kitty comes home.”

FY20-21: The Worst of the Crisis

• Revenue: Declined sharply from ₹729 Cr (FY20) to ₹172 Cr (FY21) .

• Loss: Incurred a loss of ~₹90 Crore .

• Cost Optimization: Despite the revenue crash, the company focused on critical expenses and was able to generate positive EBITDA, showcasing strong cost discipline.

• Debt Restructuring: Restructured existing borrowings under the RBI’s COVID-19 resolution framework to manage liquidity.

The Phoenix Rise: Stellar Recovery in FY22-23

After two years of pandemic-induced challenges, Bharat Hotels staged a spectacular recovery.

Analysis:

• Revenue More Than Doubled: A phenomenal 117% growth, driven by the reopening of borders, successful vaccination drive, and overall economic recovery.

• Profitability Restored: The company turned around from a net loss of ₹59 Cr to a healthy profit of ₹50 Cr.

• Exceptional Cash Flow: Operating cash flow more than doubled to ₹317 Cr, providing strong liquidity.

FY24 Performance: Sustained Growth & Debt Reduction

Bharat Hotels continued its strong performance in FY24, focusing on growth and balance sheet improvement.

Profit & Loss Account (P&L)

Analysis: Revenue growth continued, and PAT grew much faster (68%) than revenue, indicating improved operational efficiency.

Balance Sheet & Cash Flow (Debt Reduction Story)

• Long-Term Debt: Reduced from ₹1,300 Cr (FY23) to ₹1,019 Cr (FY24) – a significant reduction of ₹281 Cr.

• Gearing Ratio (Debt/Equity): Improved from 59% to 51% , a positive trend.

• Cash Flow from Operations: ₹374 Cr (FY24).

• Cash Flow from Investing: ₹37 Cr (primarily from sale of some properties).

• Total Funds Generated: ₹411 Cr .

• Debt Repaid: ₹245 Cr of long-term debt + ₹164 Cr in finance costs (interest) = ~₹410 Cr used for debt servicing.

Conclusion: Bharat Hotels used its strong operating cash flow and proceeds from asset sales to significantly reduce its debt burden, strengthening its balance sheet.

Short-Term Liquidity (As of March 31, 2024)

• Current Assets: ~₹150 Cr (including ₹75 Cr cash & ₹25 Cr receivables)

• Current Liabilities: ~₹278 Cr (including ₹80 Cr to creditors, ₹10 Cr to small enterprises, ₹25 Cr statutory dues)

Analysis: The current ratio indicates a tight short-term liquidity position (“mouth-to-mouth” operating status), a common characteristic in capital-intensive industries like hospitality post-heavy debt repayment.

Current Valuation & Share Price

• Current Unlisted Share Price: Information not provided in the source. (Please check the Unlisted Network app/website for the latest price).

• Outstanding Shares: Not specified in the source.

• Revenue (FY24): ₹870 Cr

• PAT (FY24): ₹84 Cr

• Net Worth (Implied from Debt/Equity): Strong and improving.

Key Investment Highlights

1. Iconic Brand: The LaLiT is a well-recognized and trusted luxury hospitality brand in India.

2. Prime Portfolio: Owns and operates hotels in key business (Delhi, Mumbai, Bangalore) and leisure (Goa, Udaipur, Srinagar, Kerala) destinations.

3. Strong Recovery Story: Successfully navigated the COVID crisis, with revenue more than doubling in FY23 and PAT growing 68% in FY24.

4. Aggressive Debt Reduction: Significantly reduced long-term debt from ₹1,300 Cr to ₹1,019 Cr in FY24, using strong operating cash flow.

5. Diversified Revenue: Not just rooms; has 45+ successful F&B outlets with自家 brands (Kitty Su, Baluchi, OKO) that are destinations in themselves.

6. Clear Growth Pipeline: New properties planned in Ahmedabad, Mangalore, Dehradun, and expansion of The LaLiT Traveller brand.

7. Asset-Heavy Model: Owns prime real estate assets across India, providing significant underlying asset value.

8. Operational Efficiency: Improved EBITDA margins and strong cash flow generation demonstrate good management.

Risks to Consider

1. Cyclical Industry: Hospitality is highly sensitive to economic cycles, global events, and travel trends.

2. High Fixed Costs: The business has high fixed costs (staff, maintenance, utilities), which can pressure margins during downturns.

3. Significant Debt: Despite reduction, long-term debt remains high at over ₹1,000 Cr, requiring consistent cash flow for servicing.

4. Short-Term Liquidity: Current liabilities exceed current assets, indicating a tight working capital position.

5. Intense Competition: Faces competition from other luxury hotel chains (Taj, Oberoi, ITC, Marriott, Hyatt) and boutique hotels.

6. Geopolitical & Health Risks: Pandemics, terrorism, or regional conflicts can severely impact travel and tourism.

7. Unlisted Liquidity: As an unlisted company, shares are not traded on stock exchanges, and liquidity may be limited.

The Opportunity: Own a Stake in India’s Luxury Hospitality Icon

Bharat Hotels (The LaLiT) offers a unique opportunity to invest in a company that combines prime real estate assets, an iconic brand, and a strong financial turnaround story. With revenue and profitability firmly back on track and a clear focus on debt reduction, the company is well-positioned for future growth as India’s travel and tourism sector expands.

Ready to Add a Luxury Hospitality Leader to Your Portfolio?

Buy Unlisted Shares of Bharat Hotels Ltd (The LaLiT) exclusively through Unlisted Network.

Invest in a legacy of luxury and resilience.