Cindrella Hotels Faces Mixed Performance Amid Profit Decline and Valuation Concerns

Cindrella Hotels, a microcap player in the Hotels & Resorts industry, has recently undergone an adjustment in its evaluation score. This revision reflects a shift in technical trends, moving from a bullish stance to a mildly bullish outlook.
The stock's performance indicators present a mixed picture. Over the past year, Cindrella Hotels has generated a return of 41.71%, significantly outperforming the BSE500 index. However, this positive return comes alongside a notable decline in profits, which have decreased by 45%. The company reported a net sales figure of Rs 5.20 crore over the latest six months, marking a growth rate of 25%. Additionally, the latest quarter showed a higher profit after tax of Rs 0.12 crore and a peak PBDIT of Rs 0.56 crore.

Despite these positive short-term results, the long-term fundamentals indicate challenges. The average return on equity stands at 6.38%, and the company's ability to service its debt is weak, as evidenced by a poor EBIT to interest ratio of 0.14. Furthermore, the stock is trading at a premium compared to its peers, reflecting a very expensive valuation with a 2 Enterprise value to capital employed.

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