Best Eastern Hotels' Q3 Financial Performance: A Mixed Bag

Nov 07 2023 12:00 AM IST

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Best Eastern Hotels, a microcap company in the hotel industry, reported a decline in net sales and standalone net profit for the quarter ended September 2023. The company's operating profit and interest expenses also saw a significant decrease, resulting in a lower operating profit margin. However, the company has shown consistent growth in operating cash flow and has been able to settle its debtors at a faster rate. On the other hand, its operating profit and profit before tax were the lowest in the last five quarters, and its earnings per share and cash and cash equivalents have also been declining. Investors should carefully consider these factors before making any decisions regarding the company's stock.

Best Eastern Hotels, a microcap company in the hotel industry, recently announced its financial results for the quarter ended September 2023. The company's net sales saw a decline of 36.65% compared to the previous quarter, while its standalone net profit also decreased by 90%. These numbers have led to a 'Strong Sell' stock call by MarketsMOJO.

The company's operating profit (PBDIT) excluding other income also saw a significant decline of 53.66%, and its interest expenses increased by 50% compared to the previous quarter. This has resulted in a decrease in the operating profit margin (excluding other income) from the previous quarter.

Despite these challenges, there are some positive aspects of Best Eastern Hotels' financial performance in the quarter. The company has shown a consistent growth in its operating cash flow over the last three years, with the highest amount of Rs 0.87 crore generated annually. Additionally, the company has been able to settle its debtors at a faster rate, with a debtors turnover ratio of 602 times in the last five half-yearly periods.

However, there are also some areas of concern for the company. Its operating profit (PBDIT) in the quarter was the lowest in the last five quarters, indicating a negative trend in the near term. The same can be said for its profit before tax (PBT) less other income, which was also the lowest in the last five quarters. Furthermore, the company's earnings per share (EPS) have been consistently declining, and its cash and cash equivalents have also decreased in the last six half-yearly periods.

Overall, Best Eastern Hotels has seen a flat financial performance in the quarter ended September 2023, with a score of 0 compared to 4 in the previous quarter. Investors should carefully consider these factors before making any decisions regarding the company's stock.

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