Grand Continent Hotels IPO Review

Grand Continent Hotels operate in the mid-scale hotel sector, consisting of the upper-mid priced, mid-priced and economy hotel segments. They seek to cater to Indian middle-class guests and business travellers and to deliver differentiated yet comfortable service offerings, with a value-for-money proposition. The Company along with the JV Partner Entities have 16 operational hotel properties and operates a total of 753 hotel keys as of September 30,2024 across states of Karnataka (Bengaluru/Mysuru), Tamil Nadu (Hosur), Goa (Anjuna/Morjim), Andhra Pradesh (Tirupati) and Telangana (Secunderabad).

The Company benefit from the industry experience, guidance and the vision of their Promoter, Mr. Ramesh Siva, who is also the Chairman and Managing Director and has more than two decades of experience in the hotel and hospitality industry. He has demonstrated ability to manage and grow operations organically and also by acquiring and integrating hotels. They also have a strong management team with significant industry experience and domain knowledge leading key aspects of the business.

The Revenues from operations for the period ended on Sep 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 3,186.32 Lakh, ₹ 3,153.16 Lakh, ₹ 1,704.70 Lakh and ₹ 602.73 Lakh respectively. The EBITDA for the period ended on Sep 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 1,126.94 Lakh, ₹ 1,015.95 Lakh, ₹ 649.86 Lakh, and ₹ 238.48 Lakh, respectively. The Profit after Tax for the period ended on Sep 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 622.37 Lakh, ₹ 407.77 Lakh, ₹ 103.49 Lakh, and ₹ -79.29 Lakh respectively. This indicates a steady growth in financial performance.

The Company Key Performance Indicates the pre-issue EPS of ₹ 2.54 and post-issue EPS of ₹ 1.64 for FY24. The pre-issue P/E ratio is 44.49x, while the post-issue P/E ratio is 69.06x against the Industry P/E ratio is 45x. The company's ROCE for FY24 is 18.35%, ROE for FY24 is 25.00% and RoNW 26.67%. The Annualised EPS based on the latest financial data is ₹ 7.48 and PE ratio is 15.10x. These metrics suggest that the IPO is fully priced.

The Grey Market Premium (GMP) of Grand Continent Hotels showing listing gains of 19.00 %. Given the company's financial performance and the valuation of the IPO, we recommend Risky Investors to Apply to the Grand Continent Hotels Limited IPO for Listing gain.

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About the Author
CA Abhay Kumar (Also known as  CA Abhay Varn) is a qualified Chartered Accountant by profession and cleared CA at age 21. He is a SEBI Registered Research Analyst with Registration Number - INH300008465. He Possesses 8+ years of experience in the Stock Market Field and has also worked in Big CA firms.