As mentioned already occupancies have peaked out. The only thing that can increase from here would be ARR.
8 Likes
Am I missing something here
When average revenue per room has grown at 15% + they have added some new rooms the quarter should the asset income should go up by more than 15% yoy in this case!! Why is asset income growth lower than revpar growth unless there are lesser number of rooms
3 Likes
RevPar growth of 15% given is for rooms existing before ACIC acquisition, so seems like lower revenue growth is due to ACIC portfolio. Could be lower F&B / ancillary revenue as well.
Disc: Not Invested
4 Likes
Q4 should have full qtr revenues for noida 133 rooms and Kolkata 107 rooms that probably came on during mid and late Q3, although they would take a couple more qtrs to stabilize.
That being said the numbers are coming in as estimated by Elara and would be a beat on full year PAT
The impact of the one time refinancing cost to the bottomline was significant as it reduced the Q3 net profit number by 28%
The present company valuation is indeed mouthwatering and I’m looking at it like it has the ability right now to generate 300 crores annual net profit… Would mr. market give the same valuation if it didn’t have the debt it did?
6 Likes
Samhi is a business hotel. People go to homes during festive season. Occupancy will be down in this quarter always. Look at Q2 numbers :
4 Likes
ACIC are low cost rooms, with constant renovation and upscaling slowy margins are inching up.
2 Likes
Results are came out , revenue is not so impressive but ebidta & pat very good ,some time it’s demand & supply game , I know lits investor loosing their patience as we stuck in price range , someone’s say ots opportunity cos I totally understand & agree with them ,but you never know when PE fund selling pressure is over stock become re rated , as per my view I get as much quantity for month at same price , past example usha martin ( invested) brother is selling, pix transmission ( invested) fund house is selling. Not making comparison just give a idea not camparing with above mentioned names
Invested in samhi hotel , ( done transaction in last 7 days )
Due your due diligence,not sebi register. No buy & sell recommendations in any stock.
10 Likes
Revenue miss while better margins.
Seems market doesn’t appreciate overall results, I am jumping into the stock now, looks very reasonable and screaming buy now!!
8 Likes
Fair to say that results are in line with the management commentary. Taking a snippet from last concall, Ashish mentioned a revenue growth between 9-11% and that’s what they have delivered.
Results might not match with competitors or even investors expectations but they do match with the management commentary.
Disc invested
14 Likes
Invested and have been waiting for PE funds to exit so that selling pressure goes away but I think it is leading to other problem - Increasing retail share holding. Not all selling by PE is getting absorbed by the other institutions.
From Mar-24 to Dec-24, the PE funds have reduced their stake by more than 10-12%, of which hardly few % were absorbed by other institutions, rest went to retailers. Look at the retail shareholders, increased from 44K to almost 80K.
Point is, is it just moving from PE overhang to retail (high float) overhang kind of a situation.
4 Likes
Last year, Q3 was best quarter for Samhi. going by that logic…Q3FY24 should also have given muted growth…
Why are no block deals happening?
March FII holding 69.48
Dec FII holding 54.76
That is a lot of selling. No institutions want to enter?
1 Like
Overview of Financial Performance:
Mr. Ashish Janwal, the MD and CEO, introduced the financial performance for the quarter ending December 31, 2024, highlighting the presence of key team members including the CFO and other executives.
The quarter marked the first full consolidation of the ACIC portfolio following its acquisition in August 2023, significantly impacting financial results.
Total asset income reached INR 296 crores, reflecting a year-on-year growth of 10%, driven by strong performance from same-store assets which saw a 15% growth.
The ACIC portfolio experienced muted revenue growth due to a focus on transitioning from franchise to managed operations and restructuring costs.
The reported EBITDA for the quarter was INR 122 crores, marking a substantial year-on-year increase of 133%, with an EBITDA margin improvement to 41.2%.
Corporate Expenses and Debt Management:
The company reported a reduction in net corporate G&A and ESOP expenses, both down to INR 4.4 crores, contributing to improved profitability.
Consolidated EBITDA stood at INR 113 crores for the quarter, indicating a 25% year-on-year growth with margins reaching 37.9%.
Depreciation expenses were stabilized at INR 29 crores, and the company refinanced a high-cost loan, potentially saving INR 16 crores annually.
As of December 31, 2024, net debt was reported at INR 260 crores, with a cost of debt at 9.4%.
The increase in net debt was attributed to capital expenditures for acquiring new properties and expanding existing ones.
Market and Business Update
Mr. Janwal noted a robust 15% RevPAR growth for same-store assets, driven by strong office market demand and record passenger movement in key cities.
Despite low new hotel supply in major cities, demand remains strong, particularly in Bangalore and Hyderabad, which are key markets for Sami Hotels.
The company is focused on leveraging revenue growth to improve margins, with same-store assets achieving an EBITDA margin of 42.2%.
Sami Hotels is planning to double its upper upscale and upscale hotel inventory, increasing from approximately 1,000 to over 2,000 rooms through various development projects.
Expansion Projects and Renovations:
Expansion efforts include the addition of 54 rooms in Sheraton Hyderabad and 22 rooms in Pune, expected to be completed by fiscal year 2026.
The company is repositioning two upper mid-scale AIC assets into Courtyard by Marriott, adding approximately 330 rooms to its portfolio.
The W Hotel in Hyderabad and the Western Tribute in Bangalore are set to add around 530 rooms in high-performing micro-markets.
Successful renovations and rebranding of existing hotels, such as the conversion of Caspia Pro into Holiday Express, have begun to capture market share effectively.
Asset recycling initiatives are underway, aimed at reallocating capital to enhance margins and overall performance.
Q&A Session Highlights :
During the Q&A session, management addressed inquiries about market performance, future growth expectations, and strategies for managing debt and capital expenditures.
Questions focused on the potential for revenue growth in the midscale and upscale segments and how this could outperform luxury segments in the coming years.
Management reiterated their confidence in achieving targeted net debt levels through internal cash generation and asset recycling efforts.
The company also discussed the impact of recent renovations and rebranding on revenue performance and future growth projections.
Closing Remarks
Mr. Janwal concluded the call by expressing optimism about the company’s future, emphasizing the strategic initiatives in place to unlock value in both the P&L and balance sheet over the next few years.
The management team looks forward to continued growth and engagement with stakeholders as they implement their strategic plans.
Disc - invested, this is an AI generated concall summary, no recommendations to buy or sell.
3 Likes
Having gone through the conference call and understanding the reasons for:
- Net profit below my expectations of 30 crore for the quarter - attributed to the non cash hit of 6.5 crores in finance expenses
- Muted topline growth of 10% relative to peers - this is due to the ACIC portfolio sub par performance. Management has taken necessary steps of conversion from franchisee model to management contract model in the last 3 quarters and are confident of incremental revenue coming in starting from q4.
SAMHI continues to be valued at a discount to the comparable industry peer group. In my view it is the high debt levels and no long term shareholder/promoter that are the contributing factors. Substantial percentage of existing institutional shareholders seem to want to exit. Retail is lapping it up but our expectations are also short term and therefore supply is giving way to more supply.
It is a small cap and I do believe that if the improved performance in the near term continues and the discount valuation to peers remain it will definitely catch the eye of some fancy pant institutional investor group that will scoop it up, take ownership and management control, wipe out the debt and make ebitda flows result in sizeable net profits of 300+ crores from the existing portfolio and prove to the market what we mavericks already know.
Until then in Mr. Jakhanwala we trust. But it remains to be seen if Mr Market will honour him by valuing SAMHI at an EV to EBITDA multiple of 20.
15 Likes
Q3FY25 Key takeaways - Tamper your Expectations
- DEBT will be elevated levels coming 3 years. (If no external capital fund raise event)
- Consolidated EBITDA margins will be moving higher leading to higher PAT
- Moving to upper upscale segment in coming years - Higher EBITDA Margins, Robust PAT
Coming to peer valuations and stock movement
- It will be compounder kind of company.
- Realistic expectation is to see as 25% CAGR over 3 to 5 years.
- Comparing with large hotel brands and assuming SAMHI would get valuation is not the right expectation imho.
- Remember it caters to MICE economy ( MICE stands for Meetings, Incentives, Conferences, and Exhibitions. )
Reason:
Hotel brands have managed hotels as their verticals, which is very asset light model, which as a hotel operator SAMHI doesn’t have.
Shorten the expectation, Leave to the market. Earnings will drive the price.
9 Likes
Some important Points from Samhi Concall
-
RevPAR Growth of 15% in same store assets
-
ACIC Rev Par Growth was flat. All of the ACIC portfolio have now transitioned from franchise to Marriott managed. Hence the uptick in margins by 300 basis points.
-
From next quarter ACIC will start revenue showing revenue growth. Expect 9%-10% revenue growth from ACIC in FY26 with substantial operating leverage.
-
Food and Beverage growth of only 5%. Venue and event revenue saw growth its the inhouse specialty restaurant which saw degrowth. Company is working on pricing, product and marketing strategies to counter this.
-
Company is now at peak debt levels ~ 2000 crs. Committed to bring net debt/EBDITA to 4.5x by FY25 and 3.5x by FY26 with some asset recycling.
-
Capex - 50 cr Q4FY25. 200 crs- FY26 and 150 crs each for FY27 and FY28
-
How renovation increases room rate - Holiday Inn in Gr Noida now earning 5600 room rate, earlier it was 2300. Q4 is peak quarter, so room rate may come down a little in Q1,Q2. But the point was to understand renovation strategy.
-
Growth Levers for FY26 -
Similar renovated hotels like in point no (7) about to open in Q4FY25 in Kolkata and Bengaluru.
Brownfield inventory additions in Sheraton Hyderabad and Hyatt Regency Pune.
-
A one time refinancing of high cost loans reduced the Q3 profit by 6cr (non cash expense). Would save around 16 crs annually.
-
Company always expense out 40-50 cr of maintenance capex in P&L.
Disc : Invested
Tone : Very bullish
18 Likes
Samhi Hotel anticipates a 35% increase in revenue over the next few years!
The company posted a net profit of ₹22.7 crore, a sharp contrast to the ₹236.4 crore loss recorded in the same quarter last year.
Watch the management interview
Read here - Samhi Hotels Expects New Acquisitions, Product Mix Change To Drive 35% Revenue Growth
7 Likes
Samhi has printed an INR 113Cr EBITDA in Q3. Granted revenue growth was weaker than expected at 10%, but I still don’t see that as enough reason for the stock to fall post results. But the stock has fallen. Why? Nobody can say for sure, but it will be a mix of the reasons I’ve discussed in my last post. When the number improvement is there for the market to see and the business trajectory has been moving more or less exactly as you’d hoped it would, but still the market does not think the stock price should go up, then its time to consider the position if you are not a very long term investor (Mine is not patient capital like institutions).
I exited Samhi post results, mainly after acknowledging that market perceives valuations here differently to how I initially perceived it to be. Also, the lack of a promoter, extremely high float and post IPO selling overhang from institutions does not help the stock price at all.
I really like the business and Mr. Ashish Jakhanwala. He is an absolute stalwart in this industry and his journey from employee to entreprenuer under the tutelage of legends like Sam Zell has been amazing. I wish the company well and hope to own it again in the future. On a lighter note, for the rest of you who continue to hold, I hope the Samhi stock does what Genus Power did after I posted on VP and exited 
39 Likes
Q4 is good for business hotels + Demand > Supply + Very high Occupancy rate for hotel sector as a whole
4 Likes
Too much float and no plan of debt reduction in a cyclical industry keeping away potential investors
3 Likes