Mehabe score: 3 G Factor: 0 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 0 and Piotski score of 4.
Description
Gujarat Hotels Ltd was established in 1982. It is an associate company of ITC Limited, It owns the Welcome Hotel Vadodara in Vadodara which is operated by ITC Limited under an Operating Licence Agreement. [1]Site:507960Main Symbol:GUJHOTE
Stock trades at 155.0, below its 50dma 158.74. However it is trading above its 200dma 139.18. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 158.74.
The 52 week high is at 204.45 and the 52week low is at 78.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 28.20%
Weakness
– The company has delivered a poor sales growth of -22.27% over past five years.
– has a low return on equity of 11.16% for last 3 years.
-Earnings include an other income of Rs.1.51 Cr.
– has high debtors of 320.76 days.
Competition
– The industry trades at a mean P/E of 84.5x. Indian Hotels Co trades at the industry’s max P/E of 26.34x. 507960 trades at a P/E of 26.3x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 5.0. 507960 has a G-Factor of 0 and Piotski scoreof 4.
– Average 1 month return for industry is 23.2%. The max 1- month return was given by Indian Hotels Co: a return of 51.26 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 0.6 cr compared to Rs 0.16 cr for period ended Sep 2020, a rise of 275.0%
Operating Profits reported at Rs 0.5 cr for period ended Sep 2021 vis-vis 0.07 for period ended Sep 2020 .
Operating Margins expanded 3958.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 1.77 compared to Rs 1.5 for previous quarter ended Jun 2021 and Rs 1.06 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1.44 cr for period ended TTM vis-vis sales of Rs 0.99 cr for the period ended Mar 2021, a healthy growth of 31.2%. The 3 year sales cagr stood at -27.0%.
Operating margins expanded to 76.39% for period ended TTM vis-vis 68.69% for period ended Mar 2021, expansion of 770.0 bps.
Net Profit reported at Rs 2.23 cr for period ended TTM vis-vis sales of Rs 2.27 cr for the period ended Mar 2021, falling 1.8%.
Company reported a poor Net Profit CAGR of -18.2% over the last 3 years
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 11.0% over the last 3 Years. – The stock has given a return of 76% on a 1 Year basis vis-vis a return of 13% over the last 3 Years. – The compounded sales growth on a TTM bassis is -37% vis-vis a compounded sales growth of -33% over the last 3 Years. – The compounded profit growth on a TTM basis is -38% vis-vis a compounded profit growth of -12% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 46.3% vis-vis 46.3% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 28.20% – The company has delivered a poor sales growth of -22.27% over past five years.
– has a low return on equity of 11.16% for last 3 years.
-Earnings include an other income of Rs.1.51 Cr.
– has high debtors of 320.76 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 158.74 and is trading at 155.0. 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
