- Consolidated Profit Before Tax (PBT): INR107 crores, growth of 17% year-on-year.
- Total Income from Operations: Growth of 11% at a consolidated level.
- Travel Services and Foreign Exchange PBT: Growth of 20% over the previous year.
- Income from Operations: INR2,132 crores, growth of 11% adjusted for MTM impact.
- Travel and Travel-Related Services: Growth of 15%, led by holidays with 21% growth.
- MICE Business: Growth of 31% adjusted for government business.
- India DMS Business: Growth of 58%.
- Overseas DMS Business: Growth of 26%.
- EBITDA Margins: Stable at 7.6%.
- Foreign Exchange Business Revenue: Grew by 10% excluding Bangalore Airport and Hajj volumes.
- Gross Margins for Foreign Exchange Business: Improved from 1.35% to 1.5%.
- Card Loads: Increased by 13% year-on-year.
- Incremental Float Generation: INR210 crores.
- Distribution Footprint: Expanded by seven outlets.
- EBIT Margins for Foreign Exchange Business: Improved by 500 basis points from 47% to 52%.
- Travel Segment Revenue: Grew by 15%, led by Holidays with 21% growth and MICE with 30% growth.
- Outbound Holidays Revenue: INR610 crores for Q1 FY25.
- Gross Margins for B2C Business: Improved by 50 basis points.
- EBIT Margins for Travel Segment: Improved by 40 basis points from 3.45% to 3.85%.
- Forward Bookings: Strong, with double-digit growth in short-haul and domestic volumes.
- MICE Volumes: Grew by 20% year-on-year adjusted for government business.
- Corporate Travel Ticket Volumes: Increased in double digits.
- International Volume for Corporate Travel: Increased to 52% from 45%.
- DMS and Inbound Business Turnover: INR607 crores, growth of 28% year-on-year.
- India DMS Segment Growth: 58% in this quarter.
- Desert Adventures Performance: Steady despite weather disruptions.
- U.S. DMS Business: Strong volume growth.
- Provision for Doubtful Debt: Close to $0.5 million due to FTI bankruptcy.
- Sterling Holidays Revenue: INR1,257 million, growth of 9% to 10% year-on-year.
- Sterling Holidays Occupancy: Stable at 69%.
- Sterling Holidays Average Room Rate (ARR): Stable at INR7,100.
- Sterling Holidays Non-Member Room Nights: Growth of 12% year-on-year.
- Sterling Holidays F&B Growth: 6% to 7% year-on-year.
- Sterling Holidays EBITDA: Stable at 34%.
- DEI Revenue: Dropped by 7% from INR220 crores to INR206 crores.
- New DEI Partnerships: 13 partnerships signed, worth roughly INR35 crores.
Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated profit before tax grew by 17% year-on-year, reaching INR107 crores.
- Total income from operations increased by 11% at a consolidated level.
- Travel services and foreign exchange segments experienced a 20% growth in profit before tax.
- Sterling Holiday Resorts added five new resorts in the first half of the year and plans to open another eight to ten resorts.
- SOTC celebrated its 75th year with record profits in the quarter.
Negative Points
- Sterling Holiday Resorts is in an investment and expansion mode, which may impact short-term profitability.
- The exit from Bangalore Airport operations and lower Hajj volumes led to flat revenue growth in the foreign exchange segment.
- Weather conditions and geopolitical issues affected performance in some markets, such as the Middle East and Africa.
- Provision for doubtful debt of $0.5 million due to the bankruptcy of a large European travel unit impacted results.
- Long-haul travel recovery remains tepid, with growth in the early teens compared to higher growth in short-haul and domestic segments.
Q & A Highlights
Q: What was the outbound revenue for the quarter?
A: The outbound revenue for the quarter was INR610 crores. This represents about 25% of the total volume compared to FY20, which was close to INR2,400 crores. - Mahesh Iyer, Executive Director and Chief Executive Officer
Q: What was the domestic revenue for the quarter?
A: The domestic travel revenue was INR77 crores. There are multiple segments within travel, including domestic, international DMS, India DMS, MICE, and Corporate Travel. - Debasis Nandy, President, Group Chief Financial Officer
Q: Is there enough visibility for us to reach our pre-COVID outbound revenue numbers?
A: We expect to be closer to the FY20 numbers for the overall holiday portfolio. There will be some change in the mix, with short-haul and domestic segments showing stronger growth. - Mahesh Iyer, Executive Director and Chief Executive Officer
Q: Why has there been no growth in the Forex business?
A: The Forex business appears flat due to the impact of exiting the Bangalore Airport contract and lower Hajj volumes. However, profitability has grown by 10%, driven by retail segments and prepaid card volumes. - Mahesh Iyer, Executive Director and Chief Executive Officer
Q: What should we expect for Forex revenue and EBIT growth in the next two years?
A: We guide the market to a 10-12% growth in Forex revenue. Profitability will continue to grow, with EBIT margins expected to be around 45%. - Mahesh Iyer, Executive Director and Chief Executive Officer
Q: What is the outlook for long-haul recovery in the travel segment?
A: Long-haul recovery is expected to be slower, with growth in the early teens. Short-haul and domestic segments are growing faster and will compensate for any softness in long-haul. - Mahesh Iyer, Executive Director and Chief Executive Officer
Q: What was the impact of elections and heatwave conditions on Sterling's performance?
A: Sterling's conferencing business was impacted by elections, and the wedding business was affected by fewer auspicious dates. However, forward bookings for weddings in Q3 and Q4 look strong. - Vikram Lalvani, Managing Director & Chief Executive Officer, Sterling Holiday Resorts Ltd.
Q: What should we expect for Sterling's margins given the current expansion phase?
A: Despite the expansion, we expect to maintain EBITDA margins between 33-37%. The investment phase will lead to stronger performance in the future. - Vikram Lalvani, Managing Director & Chief Executive Officer, Sterling Holiday Resorts Ltd.
Q: What should be the tax rate for the full year?
A: The tax rate for the group should be around 30%, considering the profitability across different businesses. - Debasis Nandy, President, Group Chief Financial Officer
Q: What is the update on the RBI discussion paper regarding consolidation of money changers?
A: There has been no concrete policy decision from the regulator yet. Active discussions are ongoing, but no updates are available at this time. - Mahesh Iyer, Executive Director and Chief Executive Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
