U.P. Hotels Ltd

7 years high / low ( Rs.) : 548 / 113

5 years Revenue & PAT figures in Rs.cr:

2008: 63  / 11

2009 : 59 / 9

2010: 62 / 11

2011: 72 / 13

2012 : 75 / 10.5

Snapshot:

4 hotels – 645 rooms

Manpower: 714

Equity : 5.4 cr

Debt : 4 cr ( short term)

MF investments: 10 cr

Bank FD’s : 16 cr

Promoters : 88.39%

Hotel Assets:

1) Khajurao: 18 acres
104 rooms / banquet facilities for 80-7000 people – on the banks of river Khuddar

2) Jaipur : 26 acres

Hotel Clarks Amer Jaipur is situated in a green residential area, in the heart of the city. It lies at a distance of 2.5 kilometres from the airport and 12 kilometres from the railway station. Has 211 rooms. One of the most beautiful and enchanting property of U.P. Hotels Ltd.

Clarks Brij Convention centre @ Jaipur : 50000 sq ft + attached lawn for 5000 persons

3) Agra: 8 acres

Located 2 km. from the Taj Mahal, in the heart of Agra, and yet free from its din and bustle, The Clarks Shiraz is just 7 km. from the Airport and 3 km. from the Railway Station.

This 5-star resort, spread over 8 landscaped acres, has 237 well-appointed and fully renovated rooms, with maximum Taj facing rooms in the city

 

4) Lucknow : approx 3 acres ( not confirmed )

Conveniently located right in the side of the palace of the Nawabs and on the bank of river Gomti, Hotel Clarks Avadh Lucknow is only four kilometers from the railway station, 15 kilometers from the airport and just 1 km from the Main Shopping Area – Hazratga.

Hotel Clarks Avadh Lucknow features 98 rooms and is located on Mahatma GandhiMarg in Lucknow.

Valuation:

@ CMP of about Rs.278, the company trades at a m/cap of about 150 cr & EV of about 128 cr.

Promoters will have to dilute their stake to 75% in the next 6-7 months or delist the company. Considering that they own a little less than 89% ,if they opt for the delisting option, even if the same were to happen @ 2X current market price, i.e say Rs.550, promoters won’t have to shell out more than 35 cr. 

If one thinks from the promoters point of view, it makes sense for a company sitting on about 20 cr of net cash equivalents & hotels located on prime land in 4 locations.

Should be interesting to watch the developments here over the next few months.

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments.

Standard Industries Ltd

Standard Industries Ltd @ CMP of Rs.17.10 ( Market Cap : Rs.110 cr )

Cash & cash equivalents ( nett of debt of 11.53 cr ) : approx 80 cr
Equity : 32.16 cr ( FV: Rs.5)
Promoters : Pradip Mafatlal group
Promoter holding : as per exchange disclosures: 20.12%. Another 38.86% is held by Satin Ltd ( under non promoter shareholding ) which appears to be a promoter related entity.

The company has no major operational business to speak of and is purely an asset monetization play.

Land assets:

1)  Thane - Belapur Road , near Ghansoli station : 62.25 acres.As per lastavailable  information ( may stand corrected), as per prevailing  land usage norms, this can be developed as 20 % residential + 30% commercial + 50% IT park.

They had entered into a MOU for this land which was reversed in the last quarter due to insufficient progress from the opposite party.

In 2008, the company had sold a 30 acre plot here to a subsidiary of Capita Land  Commercial Ltd , Singapore for Rs.230 cr

http://www.capitalandcommercial.com/inITPark.html

2)  Prabhadevi , Mumbai  : Stanroze apartments with a built up area of approx, 30,000 sq ft. This is a sea-front location in one of Mumbai's most prime areas. The building is largely vacant and can be redeveloped. My sense is, if redeveloped, saleable area should be approx 75,000 - 80,000 sq ft. Rates here are approx Rs.30,000 psf.

3)  Sewree - Mumbai : approx  58,275 sq ft plot , wherein the Municipal authorities have notified reservation as a recreation ground. There is some dipute with the municipal authorities regarding the compensatory TDR available against this. This should be about 16,825 sqft  in the worst case scenarion and about 23,300 sq ft in the best case scenarion.

4) Bharuch, Gujarat " approx 10 acre plot . The company has already sought and received shareholder approval for sale of this plot.

5) Surat ( Salt pan land ) : 3200 acres  consisiting of two parts of 2000 acres & 1200 acres. These have been with the company for a long time through its wholly owned subsidiary Standard Salt Works Ltd  though each lease has been for a short period of 5 years. Till now, the company has not faced any lease renewal problem.

Contingent liabilities are about 35 cr which include disputed rent of about 13.64 cr, excise / customes duty of 5.53 cr, & electricity duty on captive power plant of about 13.75 cr.

Management performance leaves a lot to be desired and is a major negative. The stock trades on the BSE & NSE in the Trade to Trade group currently.

Notwithstanding the above, at current valuations, the stock seems to offer a favourable reward to risk ratio. Moreover, dividend yield ( assuming they maintain a dividend of 15% i.e. Rs.0.75 / share) is about 4.5%. 

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments.