CHALET - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.9

📊 Core Financials:

- Quarterly PAT declined from 205 Cr. to 168 Cr., showing short-term weakness despite strong YoY growth (+228%).

- EPS of 27.8 ₹ reflects moderate profitability.

- ROCE (11.9%) and ROE (6.88%) are relatively weak, indicating limited efficiency.

- Debt-to-equity ratio of 0.64 shows moderate leverage, manageable but worth monitoring.

- Cash flows supported by hospitality operations, though cyclical demand impacts consistency.

💹 Valuation Indicators:

- Current P/E of 31.5 is slightly below industry average (34.1), suggesting fair valuation.

- P/B ratio ~ 5.5 (873 ₹ / 158 ₹), indicating stretched valuation relative to book value.

- PEG ratio of 0.51 signals earnings growth potential compared to valuation, a positive sign.

- Intrinsic value appears close to current price, offering balanced risk-reward.

🏨 Business Model & Competitive Advantage:

Chalet Hotels operates premium hospitality assets including hotels and commercial spaces. Its competitive advantage lies in strategic locations, partnerships with global hotel chains, and exposure to India’s growing tourism and corporate travel sectors. However, profitability remains cyclical and sensitive to economic conditions.

🎯 Entry Zone & Long-Term Guidance:

- Entry zone: 820–850 ₹ (near support levels and undervaluation zone).

- Long-term holding: Suitable for investors seeking exposure to hospitality and real estate growth. Accumulate on dips for long-term compounding, but monitor debt and profitability trends.

Positive

• Strong YoY profit growth (+228%)
• PEG ratio of 0.51 indicates undervaluation relative to growth
• Strategic assets in premium hospitality sector
• FII holdings increased (+0.44%)

Limitation

• Weak ROE (6.88%) and ROCE (11.9%)
• Debt-to-equity ratio of 0.64 shows moderate leverage
• P/B ratio (~5.5) indicates overvaluation relative to book value
• Weak technical momentum (RSI 37.2, MACD negative)

Company Negative News

• Quarterly PAT declined from 205 Cr. to 168 Cr.
• DII holdings decreased (-0.52%)

Company Positive News

• Strong YoY profit growth (+228%)
• FII holdings increased (+0.44%)
• 52-week performance shows strong growth (+53.4%)

Industry

• Industry P/E at 34.1 indicates sector is richly valued
• Hospitality demand driven by tourism, corporate travel, and real estate expansion
• Competition from domestic and global hotel chains

Conclusion

⚖️ Chalet Hotels shows strong growth potential with premium assets and improving profitability. However, weak efficiency metrics, moderate leverage, and stretched valuations limit upside. Best accumulated near 820–850 ₹ for long-term exposure to India’s hospitality and real estate growth story.