Shares of a hotel company were in the green after it announced a buyback of its shares. Its shares settled at ₹ 166.65 apiece on Thursday.
According to an exchange filing by Sinclairs Hotels, the company’s shareholders have approved the proposal to buy back up to 15,20,000 equity shares of a face value of ₹ 2.00 for an aggregate consideration amount not exceeding ₹ 30.40 crores.
These shares will be bought at ₹ 200.00 apiece, indicating a premium of 20.81 percent as compared to its share price of ₹ 165.55 each.The company has fixed Friday September 29, 2023, as the record date for determining the purpose of determining the names of shareholders who are eligible for buyback.
Sinclairs Hotels has 4-star properties in various locations in India including Burdwan, Darjeeling, Dooars, Kalimpong, Ooty, Port Blair, Siliguri and Gangtok.
With a market capitalization of ₹ 449 crores, Sinclairs Hotels is a micro-cap company. It has a low return on equity of 14.57 percent and an ideal debt-to-equity ratio of 0.08. Its shares were trading at a price-to-earnings ratio (P/E) of 13.22, which is lower than the industry P/E of 48.25, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 62.78 percent stake in it, while retail investors hold a 37.22 percent stake in it as per the latest shareholding pattern.
The company’s net profit increased by 48 percent to ₹ 8.48 crores in the June quarter of the current financial year (Q1FY24), compared to ₹ 5.73 crores in the same period last year. Its revenue alo witnessed a marginal increase to 18.46 crores in the latest quarter, as compared to ₹ 18.33 crores in the same quarter last year.
Written by Simran Bafna
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