Hotel Leela Ventures Ltd.
BSE Code/ NSE: 500193/ HOTELEELA
Face Value: Rs 2
CMP: Rs 11
52 Weeks H/L (Rs):25.05/ 8.61
Market Cap Rs (crore): 803
Promoter’s Holding: 47.27%
Not cheap stock even at this price
The Leela Palaces, Hotels and Resorts is owned and managed by Hotel Leela Venture Limited. The company was founded by Late Capt. C. P. Krishnan Nair, Chairman Emeritus and Founder Chairman, in Mumbai in 1983 who envisioned the hotel group to be amongst the finest luxury hospitality brands in the world. Currently, The Leela Palaces, Hotels and Resorts owns and operates five properties and some of the others are managed. These properties are located in prime urban cities like Bangalore, Chennai, Delhi, Gurgaon, Mumbai, New Delhi as well as India’s magical holiday destinations of Goa, Kovalam and Udaipur. Once upon a time this was darling stock for traders and investors. Its price went up to Rs89 level in FY07. Now it is available near single digit. Many investors feel that it is throw away price but as per financial analysis it is not cheap stock even at this price.
Just look at its financial. It has an equity base of Rs126.11 crore. Reserve is around Rs258.08 crore. Current market cap is above Rs803 crore. Company has debt above Rs3230 crore in its books which is horrible.
The Company has posted almost Rs1600 crore LOSSES in last six years and debt remains at higher levels. It has converted some debt into equity but still not able to make profit on net basis. ITC Ltd. is holding around 8 percent stake in this Hotel Company and it is holding some of the finest properties in India but with this financial still it is not an investment material. The Company and its lenders are trying to sell stake to other peers but till date it is not materialized.
In our view, there are lots of opportunities available in the market after sharp crash so don’t try to buy stocks like Hotel Leela whose future is not visible without new management and new funds.