Multibagger from its 52-week low: Board announces 1:1 bonus share; stock trades at high ROE and high ROCE

The stock gave multibagger returns of over 200 per cent from its 52-week low of Rs 92.53 per share.

Sinclairs Hotels Ltd informed that the Board of Directors of the company have approved and recommended the issuance of fully paid bonus shares in the ratio of 1:1 out of its free reserves created out of profit, subject to shareholders’ approval. The company fixed the record date as Monday, January 29, 2024.

The pre-bonus paid-up equity share capital as of date is Rs 5,12,60,000 divided into 2,56,30,000 equity shares of Rs 2 each while the post-bonus equity share capital will double to Rs 10,25,20,000 comprising of 5,12,60,000 equity shares of Rs 2 each.

Earlier, Sinclairs Hotels Limited had done a buy-back of 15,20,000 equity shares of Rs 2 each for Rs 200 per share amounting to Rs 30,40,00,000. The buyback of shares was completed on October 25, 2023.

Sinclairs Hotels has 4-star properties in eight locations in India - 5 in West Bengal and one each at Ooty in Tamil Nadu, Port Blair in the Andamans and Gangtok in Sikkim. The company owns and operates hotels/resorts at prime locations in Burdwan, Darjeeling, Dooars, Kalimpong, Ooty, Port Blair Siliguri and Gangtok.

The company’s Blue Chip Corporate Customer Base includes ITC, Nestle, Sun Pharma, Axis Bank, LIC, etc. The co. also has excellent business relations with various travel Aggregators/ agents such as MakeMyTrip, Goibibo, Thomas Cook, Sita, etc. 

Today, shares of Sinclairs Hotels Ltd plunged 0.96 per cent to Rs 299 per share with an intraday high of Rs 309 and an intraday low of Rs 297.05. The stock’s 52-week high is Rs 220.85 and its 52-week low is Rs 92.53.

The company has a market cap of Rs 764 crore. According to Quarterly Results, the net sales increased by 1.1 per cent to Rs 8.52 crore and net profit decreased by 18.5 per cent to Rs 1.27 crore in Q2FY24 over Q2FY23. In its half-yearly results, the net sales increased 1.1 per cent to Rs 26.98 crore and net profit increased by 33.8 per cent to Rs 9.75 crore in H1FY24 over H1FY23.

The shares of the company have an ROE of 26.7 per cent and an ROCE of 34 per cent. The stock gave multibagger returns of over 200 per cent from its 52-week low of Rs 92.53 per share. Investors should keep an eye on this micro-cap stock.