In the past year, listed hotel enterprise, Royal Orchid Hotels saw a gain of over 105.14 percent, doubling investors’ wealth in one year.
The company recently found itself in the headlines over its renewed license agreement for its hotel – The Royal Brindavan Garden Palace & Space, located in Mysore, Karnataka, India. An investment of ₹1,00,000 would have left investors wealthier by ₹1,05,140 in a period of 12 months.
On Friday, after its recent announcement, the shares of Royal Orchid Hotels gained 6.04 percent in the mid-morning trading session.
The license for the Mysore Hotel Royal Brindavan expired on March 31st this year. In a filing with BSE India on 6th April, the company announced that its license got renewed and extended for a period of 10 years. After the expiry of the 10-year license renewal, it has the option of renewing it for an additional 5 years.
The hotel in question – The Royal Brindavan, is a tourist hotspot, overlooking the Brindavan Gardens, at the base of the KRS Dam. This strategic location makes it extremely desirable for tourists flouting to the dam and the world-famous garden. Given the fact that it has just 24 grand rooms, the exclusivity makes it a must-have for tourists worldwide.
The filing made by Royal Orchid highlights the importance of the hotel and its various amenities for the guests and important clientele staying at the Royal Brindavan, including a spa, a cafe, boutique dining, a “giant” chessboard, a swimming pool, and a balcony view overlooking the KRS dam and Brindavan Gardens.
With a market cap of ₹772 crores, the Royal Orchid Hotels is a chain of luxury staycations, resorts, and hotels in India. The company saw its best year by net profit in FY 2022, clocking in ₹27 crores from revenues of ₹139 crores. In the 9 months of FY 2023 (Revenue: ₹190 crores), they have already netted profits of ₹36 crores, beating their previous year’s figures in just 3 quarters.
Royal Orchid’s shares are currently trading at ₹266.1 per share, having a Price To Earnings ratio of 17.9, almost half of its industry P/E of 32.6. Interestingly, Promoters of the company have trimmed their stake by almost 6 percent in the past two years. As of March 2021, promoters held a 69.42 percent stake in Royal Orchid. That figure has come down to 63.59 percent as of December 2022.
The hotel and tourism industry is looking to make a revival and comeback in the upcoming years after shedding the impact of 2020 and afterward.
Written By Karan N
