This lesser-known Tata Group stock has generated better returns for its shareholders as compared to other well-known companies in the group. For example, in the last one year, Tata Consultancy Services gained merely 1.20%, Tata Motors gained 44.91% and Indian Hotels Company gained 68.08%.
In fact, the company has outperformed the benchmark indices as well. In the past month, it gained 17.24%, as compared to a 3.85% increase in the Sensex. In the past six months, it gained 63.80% as compared to a 7.50% gain in the Sensex.
Benares Hotels is a Tata Group company that operates its hotels, viz. Taj Ganges and Nadesar Palace in Varanasi and Ginger Hotel, Gondia in Maharashtra. It became a subsidiary of The Indian Hotels Company Limited in 2011.
In the past year, the company’s share price escalated from ₹ 1829.95 apiece to ₹ 4529.00, delivering multibagger returns of 147.49% during the period. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.47 lakhs today!
The company’s net profit increased by 283% to ₹ 23 crores in FY23, as compared to ₹ 6 crores in FY22. Moreover, its revenue increased by 86% to ₹ 93 crores as compared to ₹ 50 crores in the previous year.
Benaras Hotels is a micro-cap company with a market capitalization of ₹ 575 crores. It has a high return on equity of 26.33% and an ideal debt-to-equity ratio of 0.04. Its shares were trading at a price-to-earnings ratio (P/E) of 24.58, which is lower than the industry P/E of 37.42, indicating that the stock might be undervalued as compared to its peers. The company’s promoters hold a 62.57% stake in it, followed by retail investors with 37.43%
Written By Simran Bafna
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