Mehabe score: 1 G Factor: 4 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 4 and Piotski score of 4.
Description
Best Eastern Hotels is primarily engaged in the business of owning, operating hotel and resort.(Source : 201903 Annual Report Page No: 46)Site:508664
Market Cap:
Rs 32.0 cr
Price:
19.0
Trading pe:
x
Book-value:
1.41/share
Div yield:
0.00 %
Earning yield:
-2.12%
Face-value:
1.00/share
52week high:
23.30
52week low:
7.08
Technical Analysis
Stock trades at 19.0, above its 50dma 18.98. However it is trading below its 200dma 20.67. The stock remains weak though short term bullish momentum supports price action. It needs to close above 20.67 for bullish price action to continue
The 52 week high is at 23.30 and the 52week low is at 7.08
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 13.51 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.38% over past five years.
– has a low return on equity of 1.47% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 55.5x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. 508664 trades at a P/E of x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. 508664 has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 17.9%. The max 1- month return was given by Barbeque-Nation: a return of 44.85 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1.21 cr compared to Rs 0.96 cr for period ended Mar 2020, a rise of 26.0%
Operating Profits reported at Rs 0.33 cr for period ended Mar 2021 vis-vis 0.11 for period ended Mar 2020 .
Operating Margins expanded 1581.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.14 compared to Rs 0.02 for previous quarter ended Dec 2020 and Rs -0.07 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2.34 cr for period ended Mar 2021 vis-vis sales of Rs 4.3 cr for the period ended Mar 2020, a fall of 83.8%. The 3 year sales cagr stood at -21.2%.
Operating margins shrank to 8.55% for period ended Mar 2021 vis-vis 10.47% for period ended Mar 2020, contraction of 192.0 bps.
Net Profit reported at Rs -0.57 cr for period ended Mar 2021 vis-vis sales of Rs -0.35 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
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 -9.0% compared to 1.0% over the last 3 Years. – The stock has given a return of 181% on a 1 Year basis vis-vis a return of -41% over the last 3 Years. – The compounded sales growth on a TTM bassis is -53% vis-vis a compounded sales growth of -3% over the last 3 Years. – The compounded profit growth on a TTM basis is -225% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 24.98% vis-vis 24.98% for Dec 2020
Conclusion
– – Stock is trading at 13.51 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -2.38% over past five years.
– has a low return on equity of 1.47% for last 3 years.
– might be capitalizing the interest cost
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 18.98 and is trading at 19.0 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
