Advani hotels and Resort

Stock Opportunities Not-so-Hidden Gems
1

Starting a new thread about this stock.

Market cap: 496 (as of Dec1 2023).
Stock looks undervalued to me and below are some interesting numbers:

  • Market Cap₹ 496 Cr.
  • Current Price₹ 107
  • Stock P/E20.0 Industry P/E : 34.6
  • Book Value₹ 13.2
  • Dividend Yield4.47 %
  • ROCE66.4 %
  • ROE50.6 %
  • Face Value₹ 2.00
  • Altman Z Score11.5
  • Piotroski score8.00
  • 5Yrs PE22.5
  • Debt to equity0.01

Advani Hotels & Resorts (India) is engaged in the Hotel Business through its “Caravela Beach Resort”, a five-star Deluxe Resort situated in Varca Beach, South Goa

It owns and operates the Caravela Beach Resort Goa, an independent, 201-key, 5-Star Deluxe golf resort on the Arabian Sea, designed by the world-famous architects WATG (who designed both the ‘Atlantis’ resorts)

The Caravela is located on a 23-acre estate with a 275-meter long beach-front on the powdery white sands of Varca Beach, South Goa, The Caravela is surrounded by immaculately landscaped gardens and a golf course designed by the international andscape architect, Belt Collins.
The Company is managed by the Founder and Chairman & Managing Director- Mr Sunder G. Advani, the Chief Executive Officer & Whole-Time Director-Mr. Prahlad S Advan and the Executive Director Mr. Haresh G. Advani together with a distinguished Board of Independent Directors.
Mr. Sunder G. Advani is the Chairman and Managing Director of the Company. He obtained his undergraduate degree at Temple University and his M.B.A. from the Wharton School of Business Administration at the University of Pennsylvania, U.S.A. He was a marketing consultant in a U.S. based company. for over 10 years.

Mr. Sunder G. Advani’s foray into the hospitality industry in India started of as a Promoter and later as the Executive Director of the Bombay Holiday Inn Hotel at Juhu Beach. He was also appointed as a representative of Holiday Inn Inc. (worldwide). He played a pivotal role in developing Holiday Inn hotels in South-Asia. He successfully established Holiday Inns in Bombay, Agra, Madras and Colombo.

A well experience and expertise management which can turn around the story.

Risks On Dec 1 company secratery and compliance officer resigned to take new professional opportunity
on 17 Oct one of it’s independent director resigned due to his age advancing and ill health

My opinion Overall I am bullish on this stock and expecting a decent turnaround in coming quarters and current fall in numbers looks temporary.

2

poor topline growth over the last ten years. Bottom line has gone up 10 X in this period mainly because of the big jump in operating leverage this year. On the whole, this industry has not created a lot of wealth. Even market leader Indian Hotels is only enjoying the benefits of tail winds from the post-Covid travel.

dis: no holdings

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3

A few observations on a quick look at the company

  • The average revenue per Occupied room per night is constantly increasing–only a few listed companies could charge this level to their customers.
  • Occupancy is at a historic high. Practically going up from this level will be a challenge.
  • EBITDA margin in FY 23 is bit high if I compare to with historic numbers. This is the case with all the players in the industry.
  • When I compare it with Sinclairs Hotel relative valuation looks bit attractive

Few questions

  • I did not see any expansion from the company - any management plan to expand the number of keys they have?
  • What do you think the future growth will come from?
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4

Unfortunetly ther’s no concall or any meeting held by the management so can’t comment on either of questions. Though Management is well experiensed not sure why I don’t see any expansion plan.

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The content is not sufficient for a new thread on a company. You need to add last 5 yrs financials, investment rationale, risk analysis in detail & disclosure of your holding. Till you comply, the thread remains locked.

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