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Friday, October 14, 2011

Tulip Star Hotels Ltd:-Buy/sell/growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger

Scripscan:Tulip Star Hotels Ltd
BSE code:531088

Story:If you see the arbitration award which has come in, I would call it in favour of Tulip Star and against Siddhivinayak Realties, in fact Siddhivinayak Realties is a joint venture between Oberoi Realty and the promoters of DB and they have lost the case – let me just give the background, this in respect to the 6 acre property that’s Juhu Centaur and that Juhu Centaur Hotel is owned by V Hotels Private Limited. Tulip Star is holding 50% stake in V Hotels that means effectively they are having 50% ownership of the Juhu Centaur Hotel.After this arbitration award they have to refund Rs 73 crore back to the promoters of Siddhivinayak Realties and now they will be able to sell this property on fresh terms and the value of this property is now estimated at close to Rs 3000 crore because if you take 6 acres that’s will translate into developable area of about anywhere between 14-15 lakh square feet and if you go by the valuations of the hotel properties it should be able to fetch them at about 3000 crore.Now if you go by the shareholding pattern, the promoters are holding close to about 57% stake in Tulip Star, out of which 30.4% stake is held by Cox and Kings and that’s the reason we have seen day before Cox and Kings moving up because of this arbitration award coming in. Now the 33% is held by the associates, very close associates of the promoters and all that, so virtually there is no floating stock, 10% floating stock.The present marketcap of this company is just Rs 70 crore and if I am taking a valuation call of about Rs 3,000 crore for the whole hotel, it translates Rs 1,500 crore being the share of this company again there is no debt only the Rs 21 crore debt has come from the associates, friends and body’s corporate of which Rs 37 crore has lent to the V Hotels again the principal company which is owning this hotel.If you take the debt free company, Rs 70 crore marketcap and even if I apply the same criteria of 15-20% of the net present value, which should effectively translates into the valuation of this company, logically this company should get a marketcap of anywhere at least between Rs 200-220 crore and if you apply that I think share has potential to move to Rs 300 plus in fact it works out to about Rs 400 plus but I am taking a conservative call that it should move to Rs 300.The only thing that one has to keep a view of 6-12 months on this stock there is no financial performance, so there is no point in – there is no clarity about the ownership. So if you are convinced with this kind of structure and these kind valuations then one can expect a price of Rs 300 in next 6-12 months time.

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