Hold UP Hotels, says Ashish Tater

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Hold UP Hotels, says Ashish Tater

Hold UP Hotels, says Ashish Tater, Head of Research, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Ashish Tater See what other Experts & Brokerages are saying about UP Hotels See messages about UP Hotels BSE | NSE 01/01/70 Are Mutual Funds betting on ?

Hold UP Hotels , says Ashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "UP Hotels is better known as Hotel Clarks, this company owns four hotels in Uttar Pradesh, Madhya Pradesh and Jaipur region and these are all five star hotels. Hotel Amer and another hotel that is based in Jaipur and Hotel Khajuraho have total land bank of close to Rs 700 crore and the marketcap is Rs 140 crore. The company has been consistent dividend payer for last five-six years and has been doing a consistent EPS between Rs 16 to Rs 20 range."

He further added, "Interesting thing in this stock is the promoter holds 88% into the stock and with the recent changing norms of 75% promoter holding, we are banking on this particular stock that will definitely get an open offer or there will be a placement from promoter side at very high level because the net asset value of this stock are way higher."

"A company that is available on a marketcap of just Rs 140 crore having a replacement cost of over Rs 700 crore and is not having single rupee debt into the company and is having additional investment of close to Rs 10-12 crore into the bank, we feel that this stock is a clear cut multibagger and has been recommended to our clients from a very longer-term perspective, one year or so with a modest target of Rs 380."

"We feel by 2011 March the promoters can come out with an open offer where we have pegged our target at close to Rs 320 but we feel there is tremendous potential into the stock because the company has been not rated by the market as of now and Hotel Clarks is one of the premium group available in Agra. Hotel Siraj itself is more than the current marketcap of the company, which is based in Agra and the 18 acre land that the company owns in Khajuraho and the Jaipur land, the value of the Jaipur land is mind boggling and at current levels the stock is not even trading at a premium valuation to its replacement cost, which it should deserve because looking at its peers Hotel Leela and others they are not making that modest EPS in terms of valuation PE multiple but this company has been a consistent performer in terms of bottomline and has been making profit of close to Rs 20 per share. It's a very small equity of 5 crore and promoter owns 88%, with the new norms we feel the stock is a definite re-rating candidate and should be hold from a longer-term perspective from a multibagger perspective on to the stock."

Disclosure: I am not suppose to own the stock recommended here but this has been Diwali picks from Fort to all our clients and thus we feel this stock I have vested interest for our side maybe this stock have also been bought into the portfolio of the firm, so we might have also vested interest in that sense.