Mehabe score: 2 G Factor: 2 Piotski Score: 6 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 2 and Piotski score of 6.
Description
Sinclairs Hotels has 4-star properties in eight locations in India – 5 in West Bengal and
one each at Ooty in Tamil Nadu, Port Blair in the Andamans and Gangtok in Sikkim. The company owns and operates hotels/resorts at prime locations in Burdwan, Darjeeling, Dooars, Kalimpong, Ooty, Port Blair Siliguri and Gangtok.
As of FY2020, it has a total of 396 rooms, 24 suites, 2 villas and several restaurants & banquets across all its hotels.
Main Points
Launch of a New Hotel: #
Company had planned to open a new 60 room hotel in Gangtok, Sikkim in April 2020 but, it has been delayed due to Covid-19 lockdown. And, has been finally launched on 27 Nov 2020.
New property located at the posh Zero Point, minutes away from the bustling MG Market, affording wonderful views of Kanchenjunga range with a built up area of 45,000 sq.ft.
It signed a MoU with a reputed organization of Sikkim to take this hotel on lease.
Company now has 8 hotels spread across India-Siliguri, Darjeeling, Port Blair, Ooty, Dooars, Kalimpong, Burdwan & GangtokSite:523023
Market Cap:
Rs 197 cr
Price:
70.9
Trading pe:
324.0x
Book-value:
37.4/share
Div yield:
1.13 %
Earning yield:
0.33%
Face-value:
2.00/share
52week high:
78.00
52week low:
32.10
Technical Analysis
Stock trades at 70.9, above its 50dma 56.98. It also trades above its 200dma 49.81. The stock remains bullish on techicals
The 52 week high is at 78.00 and the 52week low is at 32.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 25.58%
Weakness
– The company has delivered a poor sales growth of 9.21% over past five years.
– has a low return on equity of 10.15% for last 3 years.
-Earnings include an other income of Rs.3.38 Cr.
Competition
– The industry trades at a mean P/E of 100.1x. Indian Hotels Co trades at the industry’s max P/E of 323.7x. 523023 trades at a P/E of 324.0x
– Industry’s mean G-Factor is 2.6 while the mean Piotski score is 7.0. 523023 has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 25.4%. The max 1- month return was given by Sinclairs Hotels: a return of 49.89 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 9.97 cr compared to Rs 9.45 cr for period ended Mar 2020, a rise of 5.5%
Operating Profits reported at Rs 3.82 cr for period ended Mar 2021 vis-vis 2.3 for period ended Mar 2020 .
Operating Margins expanded 1397.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.76 compared to Rs 0.45 for previous quarter ended Dec 2020 and Rs -0.29 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 17.27 cr for period ended Mar 2021 vis-vis sales of Rs 45.45 cr for the period ended Mar 2020, a fall of 163.2%. The 3 year sales cagr stood at -27.8%.
Operating margins shrank to 25.13% for period ended Mar 2021 vis-vis 37.45% for period ended Mar 2020, contraction of 1232.0 bps.
Net Profit reported at Rs 3.51 cr for period ended Mar 2021 vis-vis sales of Rs 9.49 cr for the period ended Mar 2020, falling 170.4%.
Company reported a poor Net Profit CAGR of -33.1% over the last 3 years
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 had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 9.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 64% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -65% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is -95% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.0% vis-vis 0.0% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 37.12% vis-vis 37.12% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 25.58% – The company has delivered a poor sales growth of 9.21% over past five years.
– has a low return on equity of 10.15% for last 3 years.
-Earnings include an other income of Rs.3.38 Cr.
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 56.98 and is trading at 70.9 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
