Sell Hotel Leela, says Eastern Financiers

Rajesh Agarwal, Head of Research at Eastern Financiers Limited advised selling Hotel Leela. He feels the company will not report good financial numbers going ahead.

Agarwal told CNBC-TV18, "The kind of buzz which we are seeing in Hotel Leela today is just because of the deal. However, if you look at the debt, it is around Rs 4282 crore as on September 2012 and a deal of just Rs 170 crore doesn't make much of a difference."
"The debt is the biggest concern for Hotel Leela although the management has said that they are trying aggressively to reduce debt. However, if you look at the numbers, loss for nine months (April-December 2012) is around Rs 290 crore, out of which only Rs 280 crore is just interest cost. So, with this kind of interest cost, I don't think the company is going to report better numbers in the very near future. It is better to sell," Agarwal added.