Benares Hotels

Benares Hotel is in the business of hospitality and food production and currently has The Gateway Hotel Ganges with Nadesar Palace at Varanasi having 140 rooms & suites. The company is in the process of setting up a new Hotel at Gondia, Maharashtra.  The promoter holding of the company is at 62.46% of which 22.54% is held by Indian Hotels and 26.99% by Indian Hotel’s wholly owned subsidiary, TIFCO Holding.  And that in many ways explains a lot of things – firstly, the Indian Hotels logo sported by the company, its corporate office located in Taj Palace Hotel in Delhi and the stock price of over Rs.1100, with a market cap of Rs.144 crore.

The first half of a fiscal for any hotel is tough and is seasonally weaker than the second half. And this is reflected in the performance of this hotel too in comparison with Q4. But YoY, the performance is better with net revenue going up 14% at Rs.8 crore and net profit rose 140% from Rs.49 lakh to Rs.1.17 crore. A company with net profit of not even Rs.2 crore commanding a price of over Rs.1100 is purely on the name of Indian Hotels, is debt free and the fact that it’s equity is tiny at Rs.1.30 crore (face value Rs.10), with reserves of Rs.43 crore. Like MRF, this company has since a long time been on the ripe bonus candidate list.