Sharing the concall notes:

• Management is expecting EBITDA margins to remain same as Q2 going forwards. Note: This is in conflict with their expected revenue and EBITDA guidance. Not sure if any of these guys have heard of Excel

• Their target is to become net debt positive by FY25 end. EBITDA + cash > debt

• Revenue growth is primarily in the room segment, F&B has not contributed much

• Their hotel in Noida is expected to give good revenue as the location has plenty of MNCs like Google, Microsoft and hotel market has a big vacuum

• Targeting EBITDA of ~100 Cr in FY25. The promoter has mentioned ~90 Cr earlier but then the CFO chimed in and said 100 Cr. Not sure why this information is not known to the promoter previously

• 7 Cr interest in next 6 months. Note: Honestly, I have given up on understanding how their interest costs are structured.

• They mentioned debt of 120 Cr @10.5% interest but they had mentioned the interest rate @10.75% in previous ppts and concall. Felt these numbers were given a little casually and makes me doubt on their other numbers

• Tax costs of 2.5-3 Cr in next 6 months to be incurred with a 2 Cr tax refund expected. The CFO was again fumbling in the background with these numbers

• Growth guidance: 400 Cr has now been reduced to 350 Cr in their ppt, they didn’t mention this in the concall by themselves.

• Reason for margins having reduced from 30% to 18% in Q1 and 26% in Q2

  • Orchid, Dehradun and Chandigarh got delayed and expected to open in late FY25 or FY26
  • Election and heat affected us too much. Earlier, he said electricity costs have increased (how?!)

• Long-term outlook:

  • Company is planning for sustainable growth without taking on too many risks or expensive lease rentals
  • Company wants to open hotels in niche location as they feel that domestic tourism is stagnating

• Rough valuation math:
  

• The stock is cheaply available and there is a reason for that but the risk-reward is still favorable as H2 is expected to be much better. Although I feel the expected margins seem unlikely

• Also, the interest and tax numbers were given by the CFO and well, my trust in her is a little lacking

may be its not that big of a land and its residential project and not data center related… Anant raj seems being considered as a data center stock … but i still think this calls for management governance issues… but i think in real-estate you cant be pure white

I agree.
In my opinion, there are still levers for decent growth given the much lower blended ARPU (relative to India Mart) along with rising growth of B2B share (which has better retention and pricing power).
And offcourse, in case the management announces any capital allocation policy, it generally will be too late to enter at that time.

Good discussion, so adding my perspectives in general about SIP’s. Been doing SIP’s since 10 years, though increased the weightage of flow into SIP’s (vs direct equity) since 2020. Core idea behind SIP’ is its gives you the discipline and eliminates all the biases about market movements. To build a corpus and to continue your saving journey, SIP helps you immensely.

Though I started with few Small caps, value funds and blue chip, later I realized, since maintaining a direct equity investment/demat, its better to go with index funds and ensuring general market returns on my SIP’s. So tilted a bit towards Nifty 50 and next 50, along Balance advantage fund to ensure stability of PF. The following are few points I found over the years, and I am still learning.

1. Nifty 50 Index fund from ICICI was doing well for 4-5 yrs, but recently I found that its better to go with Factor funds with an index like Momentum/ Value, Low Volatility etc. So gradually shifted to Mom 30 and Low vol (out of 100/200).
2. Few thematic fund like PHD, (Pharma, health, diagnostics) started prior to COVID, and still continuing. Pharma as a sector, not an easy segment to invest directly. Although I do have exposure to few pharma/hospital stocks, after 5-7 yrs, what I realized is we do miss a lot of good investment stories here. I believe, India has a lot of space/segments (within PHD) here to grow, and will continue to expand the global market share as a supplier of critical medicines. Maintains a specific annual increment in SIP here.
3. US fund has been doing since 7-8 years, so continue to it, though didn’t want to increase the annual SIP. The idea is to maintain at least 3-5% of overall PF exposure into US blue chip funds.
4. Started a china fund, a year back as a bottom fishing idea… considering cheap valuation and thought the bottom is around… Here, am not expecting much as the % overall PF and SIP is too low to do any bit to total PF. The idea is to keep track of global-china movement, and continue with a small allocation (5-7 yr view) and if required, move out once the valuation is in favor.
5. India Technology fund was started 2 yrs back, when the IT sector started to hit bottoms. Here too, similar to pharma segment, its one of the key GDP contributor to India and should do well over the next decade. So a thematic fund was a go to option for me.
6. Has a Focused fund and Quant fund (focused), both contributes to around 10% of overall PF. Here too, idea is to continue watch the performance closely, and to evaluate over 5-7 yrs.
7. Criteria for choosing the fund is the fund size (liquidity), churn ratio (mind set), expense ratio and fund house/manager credibility.
8. Some of the funds have few overlaps, though not at exceeding levels.
9. Booking/selling is to the minimum. Though I do try to trim a bit from index funds, Debt funds if the market seems to show froth and corrections are due…, and normally it helps me to maintain the 5-10% cash requirement in direct equity investments (where mostly into small/mid caps).

Nothing much more, will add further upon your comments and feedbacks.

Suddenly 3 top management execs have resigned including the MD. Is this a clean up exercise or a fraud or something else? I believe the previous MD had not displayed even an intent of showing any performance