Mehabe score: 4 G Factor: 4 Piotski Score: 5 The stock has a rating 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 5.
Description
TGB Banquets & Hotels Ltd, commenced its operations in June 2002 with a three star hotel property located in Ahmedabad, Gujarat. TGB also provides outside catering service and operates restaurants & food courts at Ahmedabad, Surat & Indore. It has restaurants at Surat and Jamnagar under franchisee agreement. TGB’s economy hotel brand, TGB Express, is operational at Ahmedabad and Nadiad under franchisee arrangement on revenue sharing basis. It also operates room facilities at Karnavati club and operates restaurants at YMCA Club, Karnavati Club, and Patang (the revolving restaurant at Ahmedabad) in Ahmedabad on management contract basis.
Main Points
Facilities
TGB has 35 rooms, 2 suits, restaurants and banquets.#
It also has a windmill business which is mostly used to power its hotel and the rest is sold to Torrent Power Ltd.#Site:TGBHOTELS
Market Cap:
Rs 23.2 cr
Price:
8.1
Trading pe:
x
Book-value:
33.5/share
Div yield:
0.00 %
Earning yield:
-10.35%
Face-value:
10.0/share
52week high:
10.05
52week low:
2.68
Technical Analysis
Stock trades at 8.1, above its 50dma 6.68. It also trades above its 200dma 5.53. The stock remains bullish on techicals
The 52 week high is at 10.05 and the 52week low is at 2.68
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
-Stock is trading at 0.24 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.81% over past five years.
-Promoter holding is low: 31.71%
– has a low return on equity of -17.00% for last 3 years.
-Promoters have pledged 66.73% of their holding.
Competition
– The industry trades at a mean P/E of 80.9x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. TGBHOTELS trades at a P/E of x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. TGBHOTELS has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 7.1%. The max 1- month return was given by TGB Banquets: a return of 36.13 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 5.1 cr compared to Rs 9.37 cr for period ended Mar 2020, a fall of 45.6%
Company reported negative operating profit of Rs -1.73 cr for period ended Mar 2021. For same period last year, operating profit was -18.19
The EPS for Mar 2021 was Rs -0.24 compared to Rs -0.42 for previous quarter ended Dec 2020 and Rs -0.14 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 14.79 cr for period ended Mar 2021 vis-vis sales of Rs 33.58 cr for the period ended Mar 2020, a fall of 127.0%. The 3 year sales cagr stood at -50.1%.
Operating margins expanded to -45.23% for period ended Mar 2021 vis-vis -46.31% for period ended Mar 2020, expansion of 108.0 bps.
Net Profit reported at Rs -8.25 cr for period ended Mar 2021 vis-vis sales of Rs 0.86 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs 0.0 cr for period ended Mar 2021 vis-vis Rs -3.29 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 1.0% compared to -17.0% over the last 3 Years. – The stock has given a return of 108% on a 1 Year basis vis-vis a return of -32% over the last 3 Years. – The compounded sales growth on a TTM bassis is -57% vis-vis a compounded sales growth of -37% over the last 3 Years. – The compounded profit growth on a TTM basis is 92% vis-vis a compounded profit growth of 28% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 68.29% vis-vis 68.29% for Dec 2020
Conclusion
– is almost debt free.
-Stock is trading at 0.24 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of -24.81% over past five years.
-Promoter holding is low: 31.71%
– has a low return on equity of -17.00% for last 3 years.
-Promoters have pledged 66.73% of their holding.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 6.68 and is trading at 8.1, thus bullish price action wise.
