This is a small cap company into hotels business with a market cap of around 150 crs. This company owns 4 hotels under the flagship name of CLARK’S in jaipur, khajuraho, agra and Lucknow. This (http://www.hotelclarks.com/) is their website, please sneak through. They have 650 rooms in all and have 5 star ratings for their hotels. It is a zero debt company with cash of around 18 crs on books. Their past performance (last 5 years) has been steady with almost stable revenues (less growth) even during downturn and positive OCF’s. I personally have experienced their Jaipur hotel stay and it was a very nice experience in terms of hotel location, services and popularity. The company looks conservative and is not into any much of expansion mode which to me is a positive (also promoter holding 89%). Their capacity utilization has been good and going forward i feel as the tourism picks up in India, this company can perform well. It is not at cheap valuations even now (11 times trailing earnings) but i feel with healthy financials and good growth going forward, it can be brought at dips. As i went through their AR, it was not much of help and the company’s insights were minimal.
Some counter views:
1). The company has very limited presence across india and hence can be affected badly even if one of the mentioned cities hit by some outside attacks or even political turmoils.
2). Management seems to be conservative with no plans to grow in near term and hence no major revenue increase (also no major capex).
3). Going through their AR, it looks more of a family business and hence minority investor interests may be neglected.
All feed backs are invited. Please have a look at the company and do share your insights.
Disclosures: I have not invested in this company yet, waiting for better valuations which may lead to a miss even. Please do your own research before investing.