Indian Resort Hotels Ltd. or IRH, incorporated in 1972, belongs to the House of Tatas and was promoted by Indian Hotels. IRH entered into a technical assistance agreement with Indian Hotels to provide assistance on all matters concerning working of hotel and established a beach resort at the southern end of Calangute beach near Fort Aguada, Goa. IRH set up 20 deluxe cottages equivalent to 40 rooms near the existing cottages on the hillside at an estimated cost of Rs 1.50 cr.

The project, under the name New Aguada Hermitage, was completed during 1983-84. The resort is now known as the Fort Aguada Beach resort, one of the oldest and the best known hotel resorts in Goa. The company completed a share buy-back program last year buying back shares at Rs 70 a piece, which reduced share capital from Rs 4.19 crore to Rs. 3.62 crore. A look at its past financials reveals that the company has been pretty consistent in performing despite setbacks to the overall market conditions. 

Between FY99 and FY03 in bad market conditions sales remained more or less stagnant at around Rs 17 crore to Rs 18 crore except in FY02 when sales dipped to Rs.13.46 crore. The company did not incur any losses. Its net profit in these years was Rs 5.91 crore, Rs 3.90 crore, Rs 2.16 crore, Rs 0.32 crore and Rs 1.15 crore. Its dividend ratio has been 50%, 40%, 30%, 15% and 25%. FY04 has been even better with sales at Rs 25.87 crore and net profit at Rs 2.84 crore. Dividend has been raised to 45%.

The company has spent substantial sums at renovating and refurbishing its facilities which has / will pay rich dividends in the future. Hospitality sector has not done too well in the recent past but all this could change going forward. With the Indian economy doing better and expected to maintain momentum on the back of a better-predicted monsoon, tourism could boom in the next peak season. Even in the current lean season tourists have poured in and expected to convert into a flood going forward. Time to buy therefore is now. The scrip trades at Rs 95 or thereabouts after touching its yearly high and low of Rs 143 and Rs 41 respectively.