CHALET - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials

Earnings Growth: PAT surged 207% QoQ (₹133 Cr → ₹205 Cr), indicating a strong turnaround.

Return Metrics: ROCE at 11.9% and ROE at 6.88% are modest, suggesting room for operational improvement.

EPS: ₹14.2 is decent, but not yet justifying the high valuation.

Debt Profile: Debt-to-equity of 0.76 is moderate for the hospitality sector, where capital intensity is common.

Cash Flow: Not explicitly stated, but rising profits and stable debt imply improving cash generation.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 74.9 Extremely expensive vs. industry PE (37.5)

P/B Ratio ~7.5 High premium over book value

PEG Ratio 1.22 Fairly valued relative to growth

Dividend Yield 0.00% No income play

Valuation is rich, driven by optimism around earnings momentum and asset expansion.

🏨 Business Model & Competitive Advantage

Chalet Hotels Ltd., part of the K Raheja Corp group, operates upscale hotels and mixed-use developments. Its strengths include

Strategic locations in metro cities

Strong brand partnerships (e.g., Marriott, Westin)

Diversification into annuity and rental income

Recent acquisitions like The Westin Resort & Spa, Himalayas, expanding its luxury footprint

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The company has shown impressive net income growth of 52% over five years, outperforming industry averages

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📈 Technical & Sentiment Indicators

RSI: 65.4 – Approaching overbought territory.

MACD: 29.1 – Bullish momentum.

Volume Dip – Below weekly average, suggesting short-term cooling.

DMA 50 & 200: Current price is above both, indicating strength.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹950–₹980, near DMA 50 and below current price.

Current Price ₹1,059: Slightly above fair entry, but not excessive given growth trajectory.

🕰️ Long-Term Holding

Hold or Accumulate on Dips: Strong brand, strategic expansion, and improving profitability make it a promising long-term play.

Watch ROE & Debt: Continued improvement in asset efficiency and debt management will be key to sustaining valuation.

If you'd like, I can also model future earnings or compare it with peers like Indian Hotels or Lemon Tree.

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trendlyne.com

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simplywall.st

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