Numbers thrown by the management in con-calls need to be taken with a pinch of salt. Don’t understand how the management predicts ₹400cr revenue in 2-3 years (src: concall) with management contract model. If we do quick math on the latest quarter numbers, the company does only (~20%) of its revenue through Mgmt contract rooms which when annualized is roughly ₹45-50cr. Now if the company makes ₹50cr with 3500 rooms (under mgmt contract), they will need to do approximately 7000-10000 rooms in order to reach the ₹400cr mark number (FY23 expected revenue if ₹250-280cr). Seems really far-fetched.
There also seems to be a complete mismatch between management talk and actions. They talk about taking managed hotels as the core strategy going forward but but then go ahead raise ₹200cr. Why does the business need so much money if the focus is completely on asset light model?
On top of this, constant promoter selling doesn’t help (Keshav Baljee, son of Chander Baljee has completely sold out his stake).
I would advise caution.
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