Oriental Hotels Ltd. (OHL) posted Q4 revenue of Rs. 1.08 billion (-16.9% YoY), with gross margin improving to 24.12% but net income dropping to Rs. 29.55 million. EPS fell to Rs. 2.50, while ROE slipped to 0.76%. Despite weaker fundamentals, the stock remains valued at Rs. 880.45 vs. book value Rs. 329.45, indicating strong investor sentiment. Dividend declaration for FY 2024/25 is pending
Oriental Hotels Ltd. (OHL) has released its audited financial results for the fourth quarter of FY 2024/25, showing weaker revenue and profit compared to last year, though operating margins improved modestly over the previous quarters.
The company reported a total revenue of Rs. 1.08 billion in Q4, down 16.90% year-on-year compared to Rs. 1.22 billion in Q4 of FY 2023/24. Sequentially, revenue was flat versus Q3 but still far below the peak levels seen last fiscal year, indicating continued pressure on hotel and tourism-related income.
The gross profit stood at Rs. 259.42 million, translating to a gross margin of 24.12%, an improvement from 18.05% in Q3 and 10.90% in Q1. However, this remains below the 29.11% margin achieved in Q4 last year. The improvement reflects better cost control, though revenue contraction limited overall gains.
On the earnings side, OHL recorded a net income of Rs. 29.55 million in Q4, a steep drop from Rs. 122.31 million in the same quarter last year and Rs. 44.76 million in Q3. The net profit margin narrowed sharply to 2.75%, compared to 10.06% in Q4 of FY 2023/24, indicating weaker overall profitability despite efficiency gains.
Return indicators highlighted the downward pressure. Return on Assets (ROA) fell to 0.50%, from 2.31% a year ago, while Return on Equity (ROE) dropped to 0.76%, compared to 3.48% in Q4 last year.
Per-share earnings weakened. EPS (annualized) stood at Rs. 2.50, down significantly from Rs. 10.84 in Q4 of last year and from Rs. 5.04 in Q3. The reported PE ratio rose sharply to 352.89, reflecting expensive market valuation relative to weaker earnings.
From a balance sheet perspective, the book value per share was Rs. 329.45, while the market value per share traded at Rs. 880.45, more than 2.5 times book value. This suggests that investor sentiment still values OHL highly despite declining profitability.
Dividend payout for FY 2024/25 has not been declared yet. Last year, OHL had distributed Rs. 5.26 per share, and shareholders will be watching closely to see if the company maintains or adjusts its dividend policy in light of weaker earnings.
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