Kamat Hotels (India) Ltd- A Possible Turnaround Story!

Meh results. It seems like there’s some delay in opening or ramping up the hotels that the management has expected to open given the 400 Cr Sales guidance.

Do keep in mind that Q1Fy25 was expected to be poor due to elections, heat wave and this was communicated by the management as well as other hospitality companies

Costs have risen, probably because lease costs, hotel cutlery, linen, etc. costs have increased to acquire new properties. This has hit the EBITDA margin hard whereas sales haven’t increased on par.

Finance costs should have reduced more, was expecting around ~7.2 Cr interest costs instead of the current 11.4 Cr. Not sure why the interest payment is higher.

Still bullish but this will add more lead time for any possible re-rating of the stock.

Also, the company has merged with other promoter companies which own some land in Ville Parle. Will need to check whether the valuation and shares issue to the company is at fair price. Promoter equity has increased considerably post this merger, hope the dilution is fair for minority holders.