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Hospitality company TAJGVK Hotels & Resorts Limited has put off its capital expenditure plans and renovation initiatives across its properties, to focus on getting back to normalcy while the economy opens up gradually.
Adversely hit due to lockdown, the company said it is not in a position to gauge with certainty future impact on operations since the situation is changing.
“We believe there will be impact in sales volumes, revenue, and profitability for Q1& Q2FY2021 as our hotel operations are presently shut and will gradually ramp up only after the resolution of the pandemic. The company is confident about adapting to the changing business environment and respond suitably to fulfil the needs of the customer,” the company management stated. Significantly, the company has initiated cash conservation measures such as deferral of capex and renovations plans unless absolutely required for upkeep of the operations.
The company has long term credit of ₹165.63 crore, which are rated by ICRA along with short-term working capital of ₹30 crore.
Relief package
TajGVK Hotels has availed of the Covid-19 relief package announced by the RBI and has received moratorium relief from March to May and expects it to be extended from June to August. Some of the contracts could be impacted due to the force majeure clause.
With the lockdown, the hospitality company has shut down five of its properties entirely and one hotel operating hosting repatriated passengers.
It expects a recovery in business to be driven mainly by domestic business travel, staycations, and a limited international travel during the current financial year.
IHCL
Having taken a hit in the first quarter of this fiscal, the company’s revival measures have been based on ‘survive, revive and thrive’ strategy of Indian Hotels Company Limited.
Considering all the company hotels are operated under the Taj Brand, the company does not foresee any challenge in recovery, post the revival of the economy. However, revenues are expected to be softer for sometime mainly due to lower occupancy and limited F&B due to reduced business.
In a regulatory filing, the company has stated it has also taken necessary measures to reduce fixed costs, rationalise resources and taking steps to uplift revenues. The company is in discussions with its lessors for waiver of lease rentals or concession fee during the lockdown period.
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