Kamat Hotels' Q3 financials show mixed performance, with concerns over rising debt

Kamat Hotels (India) has recently announced its financial results for the quarter ended December 2023. The company, which operates in the hotel industry, has seen a negative performance in this quarter with a score of -16, compared to -5 in the previous quarter.

Despite this, there are some positive aspects to Kamat Hotels' financials. The company has shown a strong inventory turnover ratio, with a record high of 89.45 times in the last five half-yearly periods. This indicates that the company has been able to sell its inventory at a faster rate. Additionally, the net sales for the quarter were at Rs 86.08 crore, the highest in the last five quarters, showing a positive trend in sales.

However, there are also some concerning factors in Kamat Hotels' financials. The interest cost for the company has increased by 361.56% in the last half-yearly period, indicating a rise in borrowings. The profit before tax (PBT) for the quarter has also fallen by -65.42% year on year, showing a negative trend in the near term. Similarly, the profit after tax (PAT) has also decreased by -54.45% year on year, indicating a negative trend in the near term.

Moreover, the debt-equity ratio for Kamat Hotels has reached a record high of 2.27 times, with a continuous increase in the last five half-yearly periods. This suggests that the company is relying more on borrowings to fund its operations, which may lead to a stressed liquidity situation.

Based on these financial results, MarketsMOJO has given a 'Sell' call for Kamat Hotels' stock. Investors should carefully consider these factors before making any investment decisions.