Economic slowdown, growing competition in the hospitality sector, high interest outgo and high costs paid for power have impacted the overall performance of TajGVK Hotels Resorts Ltd.
The Hyderabad-based hospitality company posted a steep fall in net profit at Re 0.58 crore for the fourth quarter ended March 31, 2013 against Rs 6.9 crore in the corresponding quarter last year.
Revenues were also down at Rs 64.26 crore (Rs 71.48 crore).
For the financial year ended March 31, 2013, the company has registered a steep fall in net profit at Rs 8.78 crore on a turnover of Rs 254.23 crore (down 1 per cent) against a net profit of Rs 29.33 crore and a turnover of Rs 255.93 crore in the previous financial year.
G. Indira Krishna Reddy, Managing Director of TajGVK, said high interest and depreciation for new property have impacted the financials of the company during the quarter. However, the investments made will bear fruit once the operations stabilise.
“With the continuing recovery in economy, the hotel industry is expected to perform well,’’ she said.
The company is in the process of taking up the expansion of its flagship project Taj Krishna and expects to gain from the potential for conferencing and hosting events.
Through a joint venture, the company expects to invest up to Rs 110 crore in the 275-room project coming up at Mumbai International Airport. This is being developed with Greenridge Hotels & Resorts, a GVK company.
The company has initiated work on a project near Hyderabad airport.
The scrip ended the session down by 1.02 per cent at Rs 63.25 on the BSE today.