During the year under review, sales and other operating income increased to Rs 595.11 crore from Rs 576.823 crore last year, while other non-operating income was lower at Rs 28.80 crore compared to the previous year's Rs 36.51 crore. A release issued by the company stated that other non-operating income last year includes Rs 16.47 crore arising out of the difference in exchange earned by the company on remittance of $35 million by its US subsidiary.

While gross profit fell to Rs 221.57 crore from Rs 253.21 crore last year, interest almost halved to Rs 25.19 crore from Rs 45.55 crore. Reduction in interest costs to was owing to repayment of loans given to its subsidiary earlier.

Depreciation was higher at Rs 32.42 crore against Rs 27.18 crore in theprevious year. Provision for tax decreased to Rs 26 crore from Rs 33.60 crore.

Operating cost has gone up by 12 per cent to Rs 45 crore which was attributed to pay-roll costs owing to wage settlements and increase in power tariff by around 20 per cent in metros.

The company has performed satisfactorily considering the general slowdown in the industry, managing director RK Krishna Kumar said. The hotel managed an average occupancy ratio of 68 per cent.

Indian Hotels, part of the Tata group, which operates a number of properties targeting leisure and business travels reported an increase in business travels. It has already upgraded facilities for business travellers in some of its properties and plans to undertake similar enhancement of services at other locations as well.

The business has been also affected by the country's economic growth and external factors such as economic sanctions imposed by the US and Japan. The company has expansion plans which include building a number of properties in Mumbaiand other parts of the country.

Insight -- Not a sweet fare

The results posted by Indian Hotels have been in line with market expectations. What with international tourists opting for decidedly cheaper holiday options in South-east Asia, tourist arrivals and as a corollary occupancy levels have dipped in India and the story at Indian Hotels is no different.

Thus, operating revenue of the company has increased a mere 3.17 per cent to Rs 595.11 crore. However, a disproportionate 11.72 per cent increase in operating expenses on account of a wage settlement and increased power tariffs, has created a drain on profitability. A fact reflected by the depressed operating margins which dipped from 37.57 per cent to 32.39 per cent. In fact, it is only a lower effective tax rate of 15.86 per cent and a drop in the interest charges to Rs 25.19 crore (Rs 45.55 crore last year), which have helped restrict losses. With no relief apparent in the interim, margins at Indian Hotels could continue to remaindepressed. A fact which is mirrored in the market sentiment for the stock which pierced its previous fifty two week low on Tuesday, touching Rs 360.