During the period under review, the company earned a total income of Rs 274.32 crore, against Rs 266.43 crore during the corresponding period last year. A company release said, the net profit also includes a net credit of Rs 2.60 crore related to the period ended March 31, 1997.

Gross profit of the company increased to Rs 71.04 crore from Rs 70.71 crore. The company's expenditure rose 5 per cent to Rs 192.28 crore, against Rs 183.04 crore last year. Interestingly, the company managed to reduce interest at Rs 11 crore, against Rs 12.68 crore.

The company has made a provision for tax at Rs 6.44 crore, against Ra 9.10 crore earlier and the depreciation has been reported at Rs 15.58 crore, against Rs 14.91 crore during the same period last year.

The financial results ofthese months are not indicative of a full year's working, the release said.

INSIGHT:

Revival seems distant: Operating revenues at Indian Hotels have increased a mere 3.49 per cent to Rs 257.79 crore for the half year ended September 1998, mirroring the low tourist and business arrivals. Indian Hotels had posted a similar revenue growth of a mere 3.17 per cent for the year ended March 1998. But aggressive marketing, made more attractive by hefty discounts is helping entice domestic tourists and thus paying some dividends.

With revenues stagnating, increased operating costs have eaten into margins. In fact operating margins have dipped albeit slightly from 26.52 per cent to 25.41 per cent. This, however, is in stark contrast to the margins in the first quarter, which had improved from 24.23 per cent to 27.26 per cent. Aided by a containment of the interest and depreciation charges, net profits improved 4.97 per cent to Rs 49.02 crore.

Many hotel companies are planning new room additions,which will only lead to an overcapacity problem. Also with the sluggish trend of lower occupancy levels and stagnant ARR's slated to continue, any revival for Indian Hotels at present seems distant.