A comprehensive Technical Analysis of Equity EIH Limited(Parent Company of Oberoi and Trident Group), taking into light its market peers and various financial and stock ratios .

1. Stock Pitch
EIH Limited
-Aditya Goyal, BITS Pilani

2. Company Outlook
• Promoter Group – Oberoi
• Sector – Hotel and Restaurants
• Incorporation Year – 1949
• Chairman – P R S Oberoi
• BSE Code – 500840
• NSE Code- EIHOTEL
2

3. Shareholding Pattern
4%
14%
36%
35%
11%
% of Shares
Foreign Institutions Non Promoter Corp. Hold. Promoters Public & Others
Promoters and Major Investors
• Oberoi Group ( 30 % )
• ITC Limited ( 15 %)
• Reliance Industries (18%)
3

4. Major Competitors/Peers
Taj Group of Hotels – Promoted by Tata Group-Trades as
Indian Hotels Co. Ltd.
Indian Tourism Development Corporation (ITDC)-Govt.
Promoted and Fueled Chain
Hotel Leela –Trades as Leela Subsidiaries
Club Mahindra- Trades as Mahindra Hotels and Resorts Ltd.
4

5. 6032.71
1981
10,402
851
3551
0
0
0
0
0
0
0
0
EIL LIMITED
ITDC LTD
INDIAN HOTELS CO LTD
HOTEL LEELA VENTURES
MAHINDRA HOTELS &RESORTS
MARKET CAPITALISATION OF MAJOR PLAYERS
(IN CRORES)
5

6. 12.77
89.68
-58.3
86.5
16.7
-7.74
2.9
-290
-113
86
-12.8
1.83 2.24
-11.6 -16.4
-350
-300
-250
-200
-150
-100
-50
0
50
100
150
2011 2012 2013 2014 2015
PAT %GROWTH
EIH LTD. IHCL Mahindra
6

7. 0
5
10
15
20
25
30
2011 2012 2013 2014 2015
OPERATING PROFIT MARGIN %
EIL Ltd. IHCL Mahindra
7

8. 1.07
0.86
0.43 0.41 0.45
0.58
0.31
0.39 0.4
0.48
2.53
1.91
2.2
2.61
2.47
1.08
2.05
1.89
1.81 1.82
0
0.5
1
1.5
2
2.5
3
2011 2012 2013 2014 2015
CURRENT RATIO
EIL Ltd. Indian Hotels Co ltd Mahindra Industry Av.
8

9. 0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2011 2012 2013 2014 2015
QUICK RATIO
EIH Ltd. IHCL Mahindra
9

10. 8.96
7.07
5.47
6.71 6.756.59
5.86
4.94
0 0
11.07
9.65
9.41
7.26
6.09
5.86
4.4
3.39
0
3.76
0
2
4
6
8
10
12
2011 2012 2013 2014 2015
RETURN ON CAPITAL EMPLOYED(%)
EIL Ltd. IHCL Mahindra Industry Av
10

11. 0.59
0.23
0.14 0.14
0.1
0.85
0.76 0.78
0.87
1.11
0.87
0 0 0
1
1.09 1.12
1.2
1.38
1.2
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2011 2012 2013 2014 2015
DEBT/EQUITY
EIH Ltd. IHCL Mahindra Industry Av
11

12. 0
5
10
15
20
25
2011 2012 2013 2014 2015
RETURN ON EQUITY
EIH Ltd IHCL Mahindra
12

13. 80.8
43.23
71.28
47
69.58
49.53
36.49
0 0 0
30.36
25.52
21.36
23.12
31.5
0
10
20
30
40
50
60
70
80
90
2011 2012 2013 2014 2015
P/E RATIO
EIH Ltd IHCL Mahindra
13

14. 1.63
3.85
3.35
4.56
5.94
2.39
2.55
3.12 3.2
3.58
0 0
-1.3
3.02
1.941.95
1.2
0.88 0.82
4.19
-2
-1
0
1
2
3
4
5
6
7
2011 2012 2013 2014 2015
INTEREST COVERAGE RATIO
EIH Ltd IHCL Mahindra Industry Av
14

15. SWOT ANALYSIS
Strengths
• Low Debt to Equity Ratio
• Weaker Rupees leading to Greater
Foreign Tourist Occupancy Rate
• Heavy investment in subsidiary
arms ensures stability of stocks
maintained through mergers.
Weaknesses
• Reducing Profit Margins
• Closure of Oberoi Delhi for
renovation
• Poor Current Ratio
• Poor PE Ratio
• Weaker Brand Image than
competitors.
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16. Opportunities
• Merger of arms like In – Flight
Kitchen Services, and other Resorts
currently operated through EIH
Associated Limited
• Exploitation of the 5 year tax
holiday announced on resorts near
UNESCO sites.
Threats
• High Competition and erosion of
market share due to entry of high
brand image foreign competitors
like Marriott, Radisson and
Meriden
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17. Current Scenario
• The BoD recently announced that Oberoi Delhi will be shut for next two
years on account of renovation. It is noteworthy that the property accounted
for 5-8 % of the Operating Profits.
• Lower Occupancy rate caused by oversupply in luxury segment has plagued
the company for last few years
• The company will launch 3 new hotels in Middle East this year, all through
Subsidiary Holdings.
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