Mehabe score: 4 G Factor: 3 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 3 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 2371.0, above its 50dma 2058.51. It also trades above its 200dma 1781.37. The stock remains bullish on techicals
The 52 week high is at 2629.00 and the 52week low is at 1163.15
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
Weakness
– Stock is trading at 4.27 times its book value
-The company has delivered a poor sales growth of 0.11% over past five years.
– has a low return on equity of 5.07% for last 3 years.
Competition
– The industry trades at a mean P/E of 78.3x. Indian Hotels Co trades at the industry’s max P/E of 382.2x. BENARAS trades at a P/E of 54.6x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. BENARAS has a G-Factor of 3 and Piotski scoreof 4.
– Average 1 month return for industry is 11.3%. The max 1- month return was given by Benares Hotels: a return of 19.56 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 16.12 cr compared to Rs 11.01 cr for period ended Mar 2021, a rise of 46.4% .
vis-vis 3.42 for period ended Mar 2021 .
Operating Margins expanded 466.9 bps for period ended Mar 2022 vis-vis Mar 2021.
Company reported operating profit of Rs 5.76 cr for period ended Mar 2022 and operating profit margin at 35.7 % for same period.
The EPS for quarter ended Mar 2022 is Rs 23.31 compared to Rs 33.92 for previous quarter ended Dec 2021 and Rs 7.85 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 49.84 cr for period ended Mar 2022 vis-vis sales of Rs 24.24 cr for the period ended Mar 2021, a healthy growth of 51.4%. The 3 year sales cagr stood at -5.8%.
Operating margins expanded to 29.33% for period ended Mar 2022 vis-vis 1.65% for period ended Mar 2021, expansion of 2768.0 bps.
Net Profit reported at Rs 5.65 cr for period ended Mar 2022 vis-vis sales of Rs -5.23 cr for the period ended Mar 2021, rising 192.6%.
Company reported a poor Net Profit CAGR of -13.5% 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 stock has given a return of 95% on a 1 Year basis vis-vis a return of 15% over the last 3 Years. – The compounded sales growth on a TTM bassis is 106% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is 208% vis-vis a compounded profit growth of -13% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2022 public holding stood at 37.43% vis-vis 37.43% for Dec 2021
Conclusion
– is almost debt free.
– is expected to give good quarter – Stock is trading at 4.27 times its book value
-The company has delivered a poor sales growth of 0.11% over past five years.
– has a low return on equity of 5.07% 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 2058.51 and is trading at 2371.0 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
