Country Club India Ltd
BSE Code: 526550
CMP: Rs.9.02
Book Value: Rs.77.01
Market Cap: Rs.84.07 Cr
EPS: Rs.1.32
P/E: 7.14
Industry P/E: 31.06
Target; Rs.17-19
Time: 9 months.
Country Club India Ltd is Country's biggest chain of Family Clubs recognized by the Limca Book of World Records. Besides prominent citizens from all walks of life, the company has around 600 Corporate Members, including Microsoft, Brooke Bond Lipton (India) Ltd, CMC Ltd and Dr. Reddy's Labs.
Country Club India Ltd provides a state-of-the-art Health Club, multi-cuisine restaurants, business centre, swimming pool and other facilities. Country Club (India) Ltd has entered into Strategic Alliances with all the major banks in the market, wherein all these banks Credit Cardholders will be entitled to the 0% interest free installments starting from 6 months to 36 months to avail Country Club membership.
Shareholding Pattern: The Promoters hold the controlling stake of the company, 52.13% while the General Public holds 47.87%. The FIIs hold 8.31% while, while the corporate bodies hold 6.23%.
Triggers:
(i) At the current price of Rs. 9.02, the marketcap of the company is just about Rs.84.07 Cr. The stock has seen a high of about Rs 225; I am talking about the price which is adjusted for the stock split, and is currently trading at Rs. 9.02.
(ii) The company has been adding properties in its kitty, since the last couple of years, since 2009, it has added five new properties. The total number of properties in its possession (owns) has now moved up to 55.
(iii) Another comforting and heartening factor is that promoters of the company have been doing a creeping acquisition, since the last few quarters, and that is evident when we compare the promoters' holding in December, 2010 quarter which was 49.69%, against the current holding of 52.13% (March, 2011 quarter). So at the current price the risk reward is extremely skewed in favour of the latter.
(iv) The EPS of the company for FY11, is Rs.1.32, while CEPS is a whooping Rs.3.28, but the stock is languishing around Rs.9.02. In the March, 2011 quarter, both the net income and profits increased.
(v) The Company has launched a new concept of ownership of fractional Condos, under which the member is offered part ownership. The product has received good response from the member public. The Company hopes to launch more such innovative products to attract more membership in future.
(vi) During FY10, the Company has set up a new overseas branch at Muscat, Sultanate of Oman. The branch is set up as “Country Vacations International LLC - Oman” and is a subsidiary of Country Vacations International Limited - Dubai, U.A.E.
(vii) Country Club India Ltd earlier informed BSE that the Board of Directors of Company, vide Circular Resolution passed on January 07, 2011, have allotted 43,45,999 Equity Shares of Rs.2 each at the rate of Rs.16.26 per Equity Share upon the conversion of remaining 31,04,285 Warrants of Rs.22.76 each out of 86,00,000 warrants to Mr. Y. Rajeev Reedy, Chairman & Managing Director of the Company for which the Company.
(viii) It is a dividend paying company and in FY11, inter alia, it has recommended a Final Divided @ 5% i.e. Rs. 0.10 each equity share of Rs.2 (Rupees Two Only) each fully paid - up equity share.
(ix) The company's Middle East markets, apart from Dubai, Oman and Abu Dhabi, have already started and have given a very positive indication. That apart, it is starting projects in Bahrain, Saudi Arabia, and Qatar. Hopefully, in the next quarter, its offices will start and commercial operations will began. As far as the East is concerned, its bank of operations has begun and it has taken a property on lease in Bangkok. It is a fantastic piece of land in the heart of Bangkok and it will add a lot to the Country Club brand.
(x) There are about two clubs coming up in Pune (Poona) for which work is going on in full swing. Gujarat also has a few which are just opening, Calcutta and Mangalore too have a few coming soon. Once all these domestic projects are over, we can definitely see a fundamental growth in these markets, because its brand is very strong and there has been a lot of positive vibration.
As far as room rates are concerned, India has become one of the most costly destinations. The amount of money that is coming into India and amount of people that are travelling across India is really mind blowing. The company is increasing roughly about 20% of the Accounting Rate of Return (ARR) in all its projects, because we see the heavy demand.
(ix) The company's Middle East markets, apart from Dubai, Oman and Abu Dhabi, have already started and have given a very positive indication. That apart, it is starting projects in Bahrain, Saudi Arabia, and Qatar. Hopefully, in the next quarter, its offices will start and commercial operations will began. As far as the East is concerned, its bank of operations has begun and it has taken a property on lease in Bangkok. It is a fantastic piece of land in the heart of Bangkok and it will add a lot to the Country Club brand.
(x) There are about two clubs coming up in Pune (Poona) for which work is going on in full swing. Gujarat also has a few which are just opening, Calcutta and Mangalore too have a few coming soon. Once all these domestic projects are over, we can definitely see a fundamental growth in these markets, because its brand is very strong and there has been a lot of positive vibration.
As far as room rates are concerned, India has become one of the most costly destinations. The amount of money that is coming into India and amount of people that are travelling across India is really mind blowing. The company is increasing roughly about 20% of the Accounting Rate of Return (ARR) in all its projects, because we see the heavy demand.
Conclusion: The company is coming up with results today, i.e. 14 th August, 2011. Hence, if the results are good, then the investors should take position in the scrip in all declines or at the CMP of Rs.9.02. But if the results are bad, then they can wait for the scrip to settle before taking with fresh positions. That the scrip is trading with a P/E of only 7.14 while the industry P/E is around 31.06, makes it an ideal candidate for the short to medium term play. The stock has corrected much from its all time high price, and a bounce is expected. This stock is expected to give at least two-bagger returns from the current price of Rs.9.02.
June, 2011, Quarter, Result Update: The company came out with superb set of results for the Q1FY12. The total income of the company came out to be Rs.77.10 Cr as against Rs.70.61 Cr in the same period previous year. The profit interest and exceptional items for Q1FY12 came out to be Rs.15.53 Cr as against Rs.12.05 Cr in the same period previous year. The net profit of the company came out to be Rs.7.23 Cr in Q1FY12, as against Rs.6.51 Cr in the same period previous year. The basic EPS of the company came out to be Re.0.81 as against Re.0.76 in the same period previous year. The annual EPS is expected to be Rs.3--3.4 in view of the massive expansion undertaken by the company. At the CMP of Rs.8.64, the company has a market cap is only Rs.77.3 Cr and P/E of 6.35 against an industry P/E of 30.57--thus it looks very attractive for short to medium term play. The investors should buy the scrip at current CMP of Rs.8.64 or in all declines or after the price stabilizes, for a target of Rs.17-19 in the next 9 months time frame. Even if the scrip gets a moderate P/E of 20, then a price of Rs.25-26 for the scrip cannot be ruled out in the medium to long term--which means around 3 times from the current market price.
June, 2011, Quarter, Result Update: The company came out with superb set of results for the Q1FY12. The total income of the company came out to be Rs.77.10 Cr as against Rs.70.61 Cr in the same period previous year. The profit interest and exceptional items for Q1FY12 came out to be Rs.15.53 Cr as against Rs.12.05 Cr in the same period previous year. The net profit of the company came out to be Rs.7.23 Cr in Q1FY12, as against Rs.6.51 Cr in the same period previous year. The basic EPS of the company came out to be Re.0.81 as against Re.0.76 in the same period previous year. The annual EPS is expected to be Rs.3--3.4 in view of the massive expansion undertaken by the company. At the CMP of Rs.8.64, the company has a market cap is only Rs.77.3 Cr and P/E of 6.35 against an industry P/E of 30.57--thus it looks very attractive for short to medium term play. The investors should buy the scrip at current CMP of Rs.8.64 or in all declines or after the price stabilizes, for a target of Rs.17-19 in the next 9 months time frame. Even if the scrip gets a moderate P/E of 20, then a price of Rs.25-26 for the scrip cannot be ruled out in the medium to long term--which means around 3 times from the current market price.
No comments:
Post a Comment