Market Cap: ₹ 402 Cr.
Apollo Sindoori is in the business of providing hospitality & support services. The company’s main four sections are Catering, Management Services, Restaurants and Hospitality.
The company is a subsidiary of Olive & Twist Hospitality Private Limited. Apollo Sindoori in FY 22, invested ₹7.5 crores in Olive & Twist Hospitality, its promoter company.
Business Model and Focus
As mentioned in the profile, Apollo Sindoori Hotels Ltd operates in 4 major segments. The company provides outdoor catering services to corporate clients, educational institutions, and hospitals, and also offers industrial catering in the catering sector.
In the hospitality and Restaurants segment, Apollo Sindoori owns a hotel in Bangalore and a Cafe in Chennai.
Cafe in Chennai and Hotel in Bangalore
Lastly, in the management services, Apollo Sindoori does consulting for planning, executing and managing the kitchens of 3rd parties.
How is the Top Management of Apollo Sindoori Hotels Ltd?
The company has not provided any details about the directors’ background, expertise, and experience. Furthermore, as an “under the radar” company, Apollo Sindoori Hotels is not listed on major data sources.
Surprisingly, the company’s Draft Red Herring Prospectus (DRHP) was also not found on the NSE website.
How Much Money Does the Management Draw from the Company?
In the FY 23 Annual Report, it was revealed that the ratio of the remuneration of each director to the median Remuneration of the employees of the company was 1:8. This means that, on average, directors receive eight times the salary of a typical employee.
Managing a hotel business is more challenging compared to managing an FMCG or a typical tech firm. For example, in The Indian Hotels Ltd, the figure was 1:14, while in Lemon Tree Hotels, the figure was 1:275.
Financial Analysis of Apollo Sindoori Hotels Ltd
Apollo Sindoori has experienced significant sales growth post covid. During the financial year 23, this figure was close to 80%. The only problem? The company operates with a single-digit net margin; in FY 24 this figure was just 2.13%. Moreover, the company Apollo Sindoori also has less Return on the Capital invested in the business this is due to a lack of good operating margins.
However, the industry standard is close to 16%. This may also mean that the company focuses more on growth than profitability. One of the main indicators of whether a company is focused on growth is its capital expenditure, which involves purchasing fixed assets.
Intense Capital Expenditure Seen in Balance Sheet
In FY23, the company made investments worth ₹10.5 crore in its fixed assets, including computers, kitchen equipment, office equipment, and related items. These investments seem to have started paying off, as the company reported a significant increase in revenue in the September 2023 report.
Source: Company presentation of September 2023
The Industry Growth
After the world has recovered from Covid-19, the Indian hospitality industry has reached its peak. There is a renewed travel enthusiasm among countries, especially among contemporary travelers, with a specific focus on millennials and Generation Z, who prioritize genuine travel experiences. Digitalization has made ticket booking and traveling swift like never before.
Source: Market Research Future
According to a report from Market Research Future, the size of India’s hospitality market was valued at USD 25.3 billion in 2022. The industry is projected to grow from USD 26.6 billion in 2023 to USD 39.2 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.0% during the forecast period (2024 – 2032).
