Mehabe score: 1 G Factor: 2 Piotski Score: 3 The stock has a rating SELL. 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 3.
Description
Chalet Hotels is engaged in the business of hospitality (hotels), commercial and retail operations and real estate development.(Source : 202003-01 Annual Report Page No:113)
Main Points
CHL, promoted by the K Raheja Corp Group, is engaged in hospitality and real estate development. The promoter group is one of the leading business houses in the country with a presence in real estate development with thirty years of legacy.Site:CHALETMain Symbol:CHALET
Stock trades at 173.0, below its 50dma 176.5. However it is trading above its 200dma 171.4. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 176.5.
The 52 week high is at 217.70 and the 52week low is at 122.65
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– Stock is trading at 2.50 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.76% over past five years.
– has a low return on equity of -0.90% for last 3 years.
-Promoters have pledged 32.01% of their holding.
-Earnings include an other income of Rs.18.17 Cr.
Competition
– The industry trades at a mean P/E of 75.7x. Indian Hotels Co trades at the industry’s max P/E of 0.0x. CHALET trades at a P/E of x
– Industry’s mean G-Factor is 2.7 while the mean Piotski score is 5.0. CHALET has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is 1.9%. The max 1- month return was given by Mahindra Holiday: a return of 22.47 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 98.0 cr compared to Rs 228.0 cr for period ended Mar 2020, a fall of 57.0%
Operating Profits reported at Rs 1.0 cr for period ended Mar 2021 vis-vis 63.0 for period ended Mar 2020 .
Operating Margins contracted -2661.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs -1.27 compared to Rs -1.51 for previous quarter ended Dec 2020 and Rs 2.09 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 294.0 cr for period ended Mar 2021 vis-vis sales of Rs 981.0 cr for the period ended Mar 2020, a fall of 233.7%. The 3 year sales cagr stood at -28.3%.
Operating margins shrank to 1.0% for period ended Mar 2021 vis-vis 34.0% for period ended Mar 2020, contraction of 3300.0 bps.
Net Profit reported at Rs -139.0 cr for period ended Mar 2021 vis-vis sales of Rs 100.0 cr for the period ended Mar 2020, falling 0%.
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 -9.0% compared to -1.0% over the last 3 Years. – The stock has given a return of 33% on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is -70% vis-vis a compounded sales growth of -28% over the last 3 Years. – The compounded profit growth on a TTM basis is -233% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 4.53% vis-vis 4.99% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 5.95% vis-vis 5.66% for Mar 2021
Conclusion
– – Stock is trading at 2.50 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of -12.76% over past five years.
– has a low return on equity of -0.90% for last 3 years.
-Promoters have pledged 32.01% of their holding.
-Earnings include an other income of Rs.18.17 Cr.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 176.5 and is trading at 173.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
