Mehabe score: 3 G Factor: 5 Piotski Score: 4 The stock has a rating SELL. 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 5 and Piotski score of 4.
Description
TajGVK Hotels & Resorts Limited, incorporated in 1995, is a joint venture between the Hyderabad based GVK Group and Indian Hotels Company Limited (IHCL). The Company is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts under the brand name of “TAJ”. The company currently has six premium hotel properties (5-star/5-star deluxe) with a cumulative inventory of 1,083 rooms. The Co. also has another property in Mumbai, which is set up under an SPV named Green Woods Palaces & Resorts Private Limited, in which TajGVK holds about a 49% stake.
Main Points
Market Position
Co. has Approx. 11% share of the available premium inventory(rooms) in Hyderabad.#Site:TAJGVKMain Symbol:TAJGVK
Stock trades at 128.0, below its 50dma 132.68 and below its 200dma 131.89. The stock remains bearish on technicals
The 52 week high is at 158.30 and the 52week low is at 102.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -18.98% over past five years.
– has a low return on equity of 1.31% for last 3 years.
-Debtor days have increased from 25.46 to 36.63 days.
Competition
– The industry trades at a mean P/E of 71.8x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. TAJGVK trades at a P/E of x
– Industry’s mean G-Factor is 3.2 while the mean Piotski score is 5.0. TAJGVK has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is -3.8%. The max 1- month return was given by Barbeque-Nation: a return of 13.64 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 25.0 cr compared to Rs 3.0 cr for period ended Jun 2020, a rise of 733.3%
Company reported negative operating profit of Rs -4.0 cr for period ended Jun 2021. For same period last year, operating profit was -14.0
The EPS for Jun 2021 was Rs -2.07 compared to Rs -0.77 for previous quarter ended Mar 2021 and Rs -3.38 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 116.0 cr for period ended TTM vis-vis sales of Rs 94.0 cr for the period ended Mar 2021, a healthy growth of 19.0%. The 3 year sales cagr stood at -28.5%.
Operating margins expanded to 7.0% for period ended TTM vis-vis -2.0% for period ended Mar 2021, expansion of 900.0 bps.
Net Profit reported at Rs -32.0 cr for period ended TTM vis-vis sales of Rs -40.0 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 -10.0% compared to 1.0% over the last 3 Years. – The stock has given a return of -11% on a 1 Year basis vis-vis a return of -16% over the last 3 Years. – The compounded sales growth on a TTM bassis is -53% vis-vis a compounded sales growth of -31% over the last 3 Years. – The compounded profit growth on a TTM basis is -3213% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.0% vis-vis 0.0% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 23.01% vis-vis 19.66% for Mar 2021
Conclusion
– is expected to give good quarter – has low interest coverage ratio.
-The company has delivered a poor sales growth of -18.98% over past five years.
– has a low return on equity of 1.31% for last 3 years.
-Debtor days have increased from 25.46 to 36.63 days.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 132.68 and is trading at 128.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
