Mac Hotels Limited

Started in 1990, Mac Hotels Limited is Panaji - Goa based company, engaged in the business of owning, operating and managing hotels, restaurants and resorts in Goa since last 25 years. Company has been incorporated with the main object to carry on the business of hotels, restaurant, café, caravan site, apartment house-keeper etc and related services. Company has entered into Management Services Agreement (OYO Agreement) with Alcott Town Planners Private Limited on September 09, 2017 for providing the services such as - Managing the day to day operations of the property, manage maintenance and supervision of the property, providing food and beverages services. Mac Hotels Limited operates Resort Park Avenue near Calangute Beach, Goa since year 2004. They have signed up with The Chocolate Room India, an Australian Chain of chocolate Cafe and opened two stores in Goa, in Calangute and Panjim respectively. As per financial performance, Mac Hotels has posted total income/net profits of Rs. 1.42 cr. / Rs. 0.09 cr. (FY14), Rs. 1.93 cr. / Rs. 0.09 cr. (FY15), Rs. 1.88 cr. / Rs. 0.08 cr. (FY16), Rs. 3.10 cr. / Rs. 0.13 cr. (FY17) and Rs. 4.16 cr. / Rs. 0.41 cr. (FY18). So company has shown growth in top-line, but bottom-line remained almost static and than there is sudden jump just before IPO. For last three fiscals it has posted an average EPS of Rs. 2.39 and an average RoNW of 13.86%. Issue is priced at a P/BV of 1.58 on the basis of post issue NAV of Rs. 15.21. If we consider latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 17.65 and comparison with peers are in above table. On BRLM's front, for Gretex Corporate Services Private Limited this is the 15th IPO. From last 10 IPOs, 2 listed below issue price, 3 at par and remaining above issue price. As of now, from last 10 IPOs, 5 are trading below issue price and remaining above issue price. ( As on 18.09.18 ) Company has shown growth except FY16 (but bottom-line remained almost constant and than sudden jump in FY18), RoNW is 13.86% and issue is fully priced. Hotel industry has good potential to grow in upcoming years, but there is high competition also. Performance of BRLM is poor. So we give NEUTRAL rating to this SME IPO.

• 1 Mr Edgar Maximiano Do Rosario Cotta
• 2 Mr Edwin E R Cotta
• 3 Hotel Miramar Comfort Private Limited