Kamat Hotels India Ltd - 108.00 Rs

Incorporated in 1986, Kamat hotels India Ltd (KHIL) was founded by Late Venkatesh Krishna Kamat and is the flagship company of Mumbai based Kamat Group which is one of the fastest growing hospitality groups in the country. Presently under the leadership of Mr. Vithal Kamat, KHIL boast of developing and running the Asia’s first Ecotel hotel – “THE ORCHID” way back in 1997. Since then, the hotel has won around 42 national and international awards. Presently the company is engaged in operating and managing following hotels.

The Orchid (Mumbai) - This is the 245 room 5 star Ecotel hotel located adjacent to the domestic airport in Mumbai. With an ARR of almost 10,000 Rs and Occupancy rate of more than 85%, this flagship hotel contributes roughly around 70% of company’s revenue. On the back of robust demand, KHIL is in the midst of expanding its room capacity by further 130 rooms in a phase manner.

VITS (Mumbai) – KHIL owns and operates 190 rooms service apartment in Andheri near International Airport. Erstwhile known as Lotus Suite, this is a four star Ecotel hotel with Occupancy rate of 75% and ARR of around 6000 Rs.

Orchid Heritage (Pune) – KHIL took over an existing fort Jadhav Gadh on Pune-Saswad highway on a long term lease and got it converted into a 40 room palace hotel in Phase I. It has been recently opened in Dec 2007 and commands an ARR of Rs 15,000.Another 60 rooms will be developed in phased manner.

VITS (Nagpur) – KHIL’s has taken an existing 55 room hotel ‘Sunny International’ on lease and is converting it into ‘VITS’ the 4 Star business hotel brand of the company. Company is also developing 120 room 5 star eco friendly hotel under the brand The Orchid near the International Airport by 2010.

Kamats Hotel Siddharth (Nasik) – Lately company has upgraded and renovated all the 32 rooms of the hotel. It is also looking at setting up a 80 room new luxury hotel at Nashik, under the brand name 'VITS' within a year

VITS (Belgaum+Aurangabad+Baroda+Aronda+Amboli) - KHIL also manages or is looking to manage 60 rooms hotel in Belgaum, 100 room hotel in Aurangabad, 100 room in Baroda, 34 room in Amboli Sindhudurg & 34 room in Aronda, Goa.

White Orchid (Vaishnodevi) – Under the joint venture with Concept Hospitality last year company undertook the management of a property in Katra Jammu consisting of approx 200 rooms.

The Orchid (Raipur) – Considering the fat development of Raipur state into a hub for for steel, mining, cement and power industry, company is constructing a 120 room 5 star ecotel under brand name The Orchid to be operation within next two year.

Hotel in Balewadi (Pune) - KHIL has entered into a joint venture with BSEL Infrastructure Realty Limited and Unity Infraprojects Limited to build, operate and manage 200 room 5 star and 200 room 3 star hotels at Balewadi, Pune

KHIL currently operates around 7 F&B outlets and 6 banquet halls in Orchid Hotel and VITS. It has a variety of F&B outlets in its hotels namely Boulevard, Gourmet, Vindhyas, Mostly Grills, Merlins, Cirkus Cirkus and Behind Bars which add to its revenues and creates wide publicity for both the hotels. Presence of these outlets ensures that the company has an active clientele apart from their room guests and provides stability to revenues in case of a fall in occupancy rates and room rates. F&B revenue is estimated to have contributed around 20% of revenue for FY08. Besides KHIL is operating around 20 restaurants in various locations in Maharashtra state and is well on track to establish around 100+ Vithal Kamat veg restaurants in various locations in Maharashtra, Gujarat, Rajasthan, Goa and Karnataka in the next 5 years, some of which will be executed under a tie-up with HPCL and ONGC.

Lately company has acquired 60% stake in Concept Hospitality Ltd @ Rs 127/- per share thereby making it a subsidiary of the company. Concept Hospitality is engaged in hotel management of reputed hotels like Rodas-Mumbai, Uppals Orchid-Delhi, Lagoona Resort-Lonavala, Floatel-Kolkatta, Wall Street-Jaipur, Beach Orchid-Kerala etc. Earlier to fund its expansion KHIL has raised nearly Rs 80 cr thru FCCB route to be converted into equity @ 225 per share. Not a single FCCB has been converted yet. For FY08, company reported 30% growth in topline as well as bottomline to Rs 148 cr and Rs 27 cr respectively. This translates into EPS of Rs 20 on current equity of Rs 13.80 cr. Incidentally, foreigners contribute around 40% of the total revenue but company follows single-rupee tariff system. Although company boasts of very aggressive expansion plan but is actually slow in execution. Hence on a conservative basis for FY09 it may report total revenue of Rs 175 cr and net profit of Rs 30 cr which works out to an EPS of Rs 22 on current equity and Rs 17 on diluted equity of around Rs 17.50 cr. Investors can buy with a price target of Rs 180 in 12~15 months.

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