TajGVK Hotels & Resorts Upgraded to 'Hold' by MarketsMOJO, Strong Financials but Decreasing Institutional Interest Raises Concerns

TajGVK Hotels & Resorts, a smallcap company in the hotel, resort, and restaurant industry, has recently been upgraded to a 'Hold' by MarketsMOJO on November 4, 2024. This decision is based on the company's positive financial results for the last four consecutive quarters.
The company's operating cash flow has been the highest at Rs 123.79 crore, while its profit before tax less other income has grown by 58.72% at Rs 23.65 crore and its profit after tax has grown by 69.9% at Rs 24.23 crore. These numbers indicate a strong financial performance by the company.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The stock has generated a return of 2.53% since the technical trend deteriorated from sideways on September 20, 2024.

At a price to book value of 3.4 and a return on equity of 16.9, the stock is currently trading at an attractive valuation. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 41.95%, while its profits have only risen by 2.8%. This gives the company a PEG ratio of 7.2.

TajGVK Hotels & Resorts has consistently outperformed the BSE 500 index in the last three annual periods, with a return of 41.95%. However, its long-term growth has been poor, with net sales growing at an annual rate of 5.28% and operating profit at 14.78% over the last five years.

Institutional investors have also decreased their stake in the company by -1.31% over the previous quarter and currently hold only 2.21% of the company. This could be a cause for concern as institutional investors have better resources and capabilities to analyze a company's fundamentals compared to retail investors.

Overall, while TajGVK Hotels & Resorts has shown strong financial performance in the last four quarters, its technical trend is currently sideways and its long-term growth has been poor. The stock is currently trading at an attractive valuation, but the decreasing participation of institutional investors could be a red flag for potential investors.