Tata Buzz: Tata Group's Most Expensive Stock Turns Rs 1 Lakh To Rs 7.25 Lakh In 36 Months, 625% Returns

In terms of market value, Tata Group has many popular stocks listed on the BSE and NSE for trading. Some of the renowned ones are the flagship, Tata Consultancy Services, another IT firm Tata Elxsi, and the investment holding company Tata Investments Corporation. Their share price is the highest among other Tata stocks in the range of Rs 4,000 to Rs 8,000. But these three aren't the most expensive stock of Tatas. Not many are aware but hold a majority stake in hotel stock, Benares Hotels which is a multi-bagger and performing better than its peers.

Beneras is above Rs 9,000 per share, and closing the gap to the Rs 10,000 mark. It has potential. The company's latest quarterly earnings were also healthy, while its parent Indian Hotels through which Tata Group holds stakes in the company, has been positive long-term growth prospects.

On BSE, on February 22nd, Benares Hotels share price ended at Rs 9,241.70 apiece, up by Rs 11.70 or 0.13%. The company is small with a market cap of Rs 1,201.42 crore. Benares during the trading hours of Thursday jumped as much as Rs 9,347.25 apiece.

The stock is just a couple of hundred away from hitting the Rs 10,000 mark, and chances are it may touch even its 52-weel high of Rs 10,051.

From its 52-week low of Rs 3,050 apiece, Benares has rallied by a whopping 203% as of now.

On a month-on-month basis, Benares is slightly down. However, there is a profit booking since the stock touched its 52-week high at the start of February month, a boost after its Q3 earnings. But it looks like this stock is gaining momentum this week, as it has been in green for two consecutive days straight.

As per HDFC Securities data, Benares has a price-to-equity ratio of 37.50x, while its price-to-book ratio is at 10.90x, deliverables are around 71.43%, dividend yield at 0.22%, and earnings per share at Rs 246.44.

Benares has also been outperforming benchmarks Sensex and Nifty for the past three years with triple-digit upside. But relative to Sensex, Benares' 3-year return is around 1,229.73%, and against Nifty, the return is around 1,117.93%.

Compared to its peers, Benares has given huge returns. In a year, Benares share price rallied by 178.39%, versus its peers such as Sinclairs Hotels which gained by 142.04%, Emerald Leisures which is up by 101.73%, Gujarat Hotels jumped by 33.06%, and Sinclairs Hotels whose yearly performance is down by 2%, as per HDFC Securities data.

Rs 1 lakh investment in Beneras rises to Rs 2,78,394.90, a return of 178.39% in 12 months. The capital will turn into a corpus of Rs 7,25,884.80 in 36 months, a return of 625.88%. And in the longer term, Rs 1 lakh will bag returns of 587.73%, taking their corpus to Rs 6,87,728.60.

Benares is also hefty dividend paying stock. In 2023, the company paid dividends upto 200% amounting to Rs 20 per share. This was more than double the amount of dividend paid to the tune of 100% valuing Rs 10 per share in 2022.

Tata Group holds stakes in Benares through its hotel flagship, Indian Hotels. Before May 2011, Benares was lesser known. But in May, it became a subsidiary of The Indian Hotels Company Limited, a company promoted by Tata Sons Private Limited. Benares gained attention with its new hotel branch under the Indian Hotels, namely Taj Ganges and Taj Nadesar Palace in Varanasi, followed by the rebranding of its The Gateway Hotel in Maharashtra to Ginger Hotel.

In the third quarter of the current fiscal, the company reported a PAT of Rs 11.3 crore versus Rs 8.3 crore in Q3FY23. EBITDA came in at Rs 16.7 crore in Q3FY24, higher compared to Rs 12.7 crore in the same quarter a year ago. While revenue from operations zoomed to Rs 34.5 crore in Q3FY24, as against Rs 28.6 crore in Q3FY23.

In the nine months of FY24, the company's net profit was at Rs 24.4 crore versus Rs 15.8 crore in the corresponding period of the same year. Revenue from operations stood at Rs 87.2 crore in 9MFY24, compared to Rs 66.8 crore a year ago same period.

Disclaimer: The write-up highlights about the stock's performance, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.