Asian Hotels (West) rating downgraded from 'IND BBB' to 'IND BBB-'

Anthony Fernandes
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Asian Hotels (West) rating downgraded from 'IND BBB' to 'IND BBB-'

In the early trading session on Monday, stock of Asian Hotels (West) Limited (AHWL) fell by over 3 per cent after credit rating agency, India Ratings downgraded the company's long-term issuer rating to 'IND BBB-' from 'IND BBB' and placed it on Rating Watch Negative (RWN).

The downgrade in rating mirrors the credit rating agency's expectation that the average room rent (ARR) and occupancy levels of AHWL will be adversely impacted in FY21 given that the company registered low revenue from operations during Q1FY21. Furthermore, the ARR and occupancy levels for H2FY21 are also subject to additional downside due to the uncertainty associated with the pandemic.

The company's operating performance dipped in FY20, during which the company booked revenue of Rs 137.17 crore from Rs 148.84 crore in FY19. In FY20, it achieved an ARR of Rs 8,265 from Rs 8,375 in FY19, whereas its occupancy level dropped from 76 per cent in FY19 to 71 per cent in FY20.

In India, the hospitality industry remains adversely affected and is likely to have a delayed recovery. This stems from the persistent uncertainty around the pick-up travel demand even once the threat of COVID-19 subsides and travel bans are lifted.

Incorporated in 2007 under its former name Chillwinds Hotels Private Limited, AHWL is operating a 401-room five-star hotel in Mumbai and has associated with Hyatt Hotels India for operating, branding and marketing the hotel under the Hyatt Regency brand.

At 11 a.m. on Monday, the company's stock was trading at Rs 262.75, down by 3.40 per cent or Rs 9.25 per share. The 52-week high is Rs 395 and the 52-week low is recorded at Rs 190 on BSE.

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