Mehabe score: 5 G Factor: 3 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 4.
Description
Benares Hotels Ltd was established in 1971. The Company operates its hotels, i.e. Taj Ganges and Taj Nadesar Palace in Varanasi and The Gateway Hotel, Gondia in Maharashtra. It became a subsidiary of The Indian Hotels Company Limited in 2011 #
Main Points
Hotels
Taj Ganges, Varanasi 144 rooms and suits
Taj Nadesar Palace, Varanasi 144 rooms and suits
The Gateway Hotel, Gondia in Maharashtra. 34 Rooms #Site:509438Main Symbol:BENARAS
Stock trades at 1665.0, above its 50dma 1544.29. It also trades above its 200dma 1378.69. The stock remains bullish on techicals
The 52 week high is at 1835.40 and the 52week low is at 1145.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Stock is trading at 3.00 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -13.55% over past five years.
– has a low return on equity of 6.47% for last 3 years.
Competition
– The industry trades at a mean P/E of 73.0x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. 509438 trades at a P/E of x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 5.0. 509438 has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 3.3%. The max 1- month return was given by Mahindra Holiday: a return of 23.78 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3.85 cr compared to Rs 0.56 cr for period ended Jun 2020, a rise of 587.5%
Company reported negative operating profit of Rs -1.19 cr for period ended Jun 2021. For same period last year, operating profit was -3.61
The EPS for Jun 2021 was Rs -17.54 compared to Rs 7.85 for previous quarter ended Mar 2021 and Rs -28.92 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 27.52 cr for period ended TTM vis-vis sales of Rs 24.24 cr for the period ended Mar 2021, a healthy growth of 11.9%. The 3 year sales cagr stood at -22.7%.
Operating margins expanded to 10.17% for period ended TTM vis-vis 1.65% for period ended Mar 2021, expansion of 852.0 bps.
Net Profit reported at Rs -3.75 cr for period ended TTM vis-vis sales of Rs -5.23 cr for the period ended Mar 2021, rising 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -7.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 40% on a 1 Year basis vis-vis a return of 9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -47% vis-vis a compounded sales growth of -20% over the last 3 Years. – The compounded profit growth on a TTM basis is -158% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 37.43% vis-vis 37.43% for Mar 2021
Conclusion
– is almost debt free. – Stock is trading at 3.00 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -13.55% over past five years.
– has a low return on equity of 6.47% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1544.29 and is trading at 1665.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
