Mehabe score: 5 G Factor: 5 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 5 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 [1] Site:BENARAS Main Symbol:BENARAS
Stock trades at 1734.0, above its 50dma 1733.73. It also trades above its 200dma 1609.0. The stock remains bullish on techicals
The 52 week high is at 2223.00 and the 52week low is at 1163.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– is expected to give good quarter
Weakness
– Stock is trading at 3.20 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 150.0x. Indian Hotels Co trades at the industry’s max P/E of 150.4x. BENARAS trades at a P/E of x
– Industry’s mean G-Factor is 3.9 while the mean Piotski score is 5.0. BENARAS has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 6.7%. The max 1- month return was given by Indian Hotels Co: a return of 13.93 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 19.27 cr compared to Rs 9.74 cr for period ended Dec 2020, a rise of 97.8% .
vis-vis 2.69 for period ended Dec 2020 .
Operating Margins expanded 1182.1 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 7.6 cr for period ended Dec 2021 and operating profit margin at 39.4 % for same period.
The EPS for quarter ended Dec 2021 is Rs 33.92 compared to Rs 3.69 for previous quarter ended Sep 2021 and Rs 4.15 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 44.73 cr for period ended TTM vis-vis sales of Rs 24.24 cr for the period ended Mar 2021, a healthy growth of 45.8%. The 3 year sales cagr stood at -9.2%.
Operating margins expanded to 27.43% for period ended TTM vis-vis 1.65% for period ended Mar 2021, expansion of 2578.0 bps.
Net Profit reported at Rs 3.63 cr for period ended TTM vis-vis sales of Rs -5.23 cr for the period ended Mar 2021, rising 244.1%.
Company reported a poor Net Profit CAGR of -25.3% 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 6.0% over the last 3 Years. – The stock has given a return of 34% 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 -20% vis-vis a compounded sales growth of -20% over the last 3 Years. – The compounded profit growth on a TTM basis is -109% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Dec 2021 public holding stood at 37.43% vis-vis 37.43% for Sep 2021
Conclusion
– has reduced debt.
– is almost debt free.
– is expected to give good quarter – Stock is trading at 3.20 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 1733.73 and is trading at 1734.0 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
