Mahindra Holidays & Resorts Ltd Q4 FY21 Conference Call Highlights

Q4 Financial Highlights (On a consolidated basis):

• Revenue from operations fell by 25% YoY and 5% QoQ to Rs.465 Cr due to the pandemic.
• Operating expenses fall by 18% YoY and increased by 2% QoQ to Rs.421 Cr 
• EBITDA fall by 57% YoY and 41% QoQ to Rs. 44 Cr.
• Profit before tax stood at Rs.-11 cr in Q4FY21 as compared to Rs.41 in Q4FY20.
• Net loss stood at Rs.10 cr in Q4FY21 as compared to a net profit of Rs.165 cr in Q4FY20.

FY21 Financial Highlights (On a consolidated basis):

• Revenue from operations falls by 27% to Rs.1730 Cr in FY21 over FY20.
• Operating expenses fall by 25% to Rs.1498 Cr in FY 21 over FY20.
• EBITDA fall by 37% to Rs.231 Cr in FY21 over FY20.
• Profit before tax stood at Rs.-2.4 Cr in FY21 over Rs.101 Cr in FY20.
• Net Loss stood at Rs.14 Cr in FY21 over the net loss of Rs.134 Cr in FY20.

Key Metrics Operations:

• Capacity: Despite the unprecedented and challenging times this year, the company closed the quarter with 85% occupancy. The company has quickly recovered the occupancies.
• Member addition: The Company added 4,789 members in Q4 which is up by about 46% on a QoQ basis and 32% on a YoY basis. Total member additions of 12,031 in FY21 lead to total member stood at 2,54,431 members at the end of FY21.
• Inventory: The Company added 465 rooms in Q4FY21. Room inventory increased at the fastest rate to cross the 4,000+ mark in FY21.

Cost Control Measures:

• The total savings that the company received on lease rentals during the year amounts to about Rs. 52 Cr out of which Rs. 31 Cr will be able to see in the other income.
• The company saved costs on account of resort consumption, energy, travel and conveyance, and other corporate overheads.     
• The team in Finland led by Ms. Maisa Romanainen has done an amazing job of controlling the costs. Despite having a lot of fixed costs, operational loss in Q4 was contained to €4.12 million.

Covid 19 impact:

• The company has undertaken a one-off cancellation of 14,782 members. This has impacted the income to the extent of Rs. 8.6 Cr and the impacted on the cost at about Rs. 12 Cr. There is a total impact of Rs. 20.3 Cr on P&L as a result of cancellation.

Demand:

• Happy Family Referral Program (HFRP) and Digital rally picked up momentum, forming 55% of sales in FY21 compared to 40% in FY20. This has been a big savior this year.
• The company has started multiple demand campaigns such as Family Premier League, We Cover India, You Discover India. All of them have also helped to build the saliency of the brand.
• The GoZest product has gained momentum during this year.

Liquidity:

• Cash flows from EMIs, tight control on costs, all of that helped the company to move cash position to about Rs. 940 Cr.

Newly added Resorts in FY21:

• Total resorts have gone up to 79 resorts in India and abroad which include resorts in Dubai, Singapore, Kuala Lumpur, Bhutan, Sri Lanka, etc.  
• The company has launched the ‘Assonora Resort’ in Goa with 152 rooms. The resort offers the experience of a mini water theme park with a lazy river, probably the only resort in the country with that kind of a theme.
• ‘Arookutty Resort’ in Kerala which is just about a 50 minutes drive from Cochin.
• Four resorts in Rajasthan, Jaipur, Ranthambore, Mount Abu, and Gujarat.
• The company has tied up with Symphony Resorts in Andaman & Nicobar and have launched three properties in Havelock, Neil Islands as well as Port Blair
• ‘Tropicana’ Resort in Alibaug. 

Optimistic about Recovery:

• The company believes they have made solid progress in mitigating the impact of covid 19.
• The company said, “With the acceleration of vaccine rollouts we will see a significant rebound in travel. We also believe that high infection states in India will recover by mid-June at the latest and in the rest of the states, the infection curve will flatten sometime by end June or early July.”
• Going forward, as the vaccination drive picks up across the country and travel restrictions ease, the company will see a very strong revival in domestic leisure travel, likes of which they saw in Q3 and Q4.
• Most of their resorts are at drivable distances from cities and they have spacious properties and room units conducive to social distancing.
• The company believe leisure travel will lead recovery, vacations to domestic destinations will become even more popular after the pandemic and there are chances of revenge travelling which will boost the demand.

Expansion plans:

• The company is planning to add up to 5,500+ rooms from 4,197 over the next 4 years. 
• The company also planning to expand existing resorts while parallelly taking very high-quality resorts on lease and management control. Phase-2 of the Goa, Assonora project will be completed this year. The company will be adding another 57 rooms to the existing 152 rooms resort.
• Mahindra holidays are at the advanced stages of getting approval for 130 rooms project near Ganpatipule at a place called Undi village which overlooks the beautiful Arabian sea.
• They are starting an expansion, project at Kandaghat, Shimla with an additional 160 room units.
• The method of delivery of experience could be through building own resorts, through buying, upgrading them, and even when the company takes resort lease, the resort had to meet the Club Mahindra standard, measurement process. Through Product Improvement Program they will give better experience to their members.