EIHOTEL - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 4.4

📊 Core Financials

Earnings & Profitability: EPS of ₹11.2 and PAT of ₹134 Cr this quarter (down from ₹247 Cr) show solid profitability despite a sequential dip. ROCE at 21.9% and ROE at 17.5% are strong, indicating efficient capital deployment.

Debt Profile: Debt-to-equity of 0.04 — virtually debt-free, which supports financial resilience and long-term scalability.

Cash Flow: While not explicitly stated, consistent profits and low debt imply healthy operating cash flows. The company has maintained strong margins and a robust balance sheet.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 34.9 Fairly valued vs. industry PE (37.5)

P/B Ratio ~5.9 Premium over book value, typical for quality brands

PEG Ratio 0.33 Undervalued relative to growth

Dividend Yield 0.37% Modest, consistent payout

Valuation is attractive, especially given the PEG ratio and strong return metrics.

🏨 Business Model & Competitive Advantage

EIH Ltd. operates luxury hotels under the Oberoi and Trident brands. Key strengths include

Premium positioning in the hospitality sector with global recognition

Diversified operations across hotels, flight catering, airport restaurants, and corporate air charters

Asset-light expansion and high operating leverage

Strong brand loyalty and customer experience focus

Over the past five years, EIH has delivered a 383% share price gain, with EPS compounding at 196% annually. The company’s total shareholder return (TSR) stands at 398%, outperforming its share price return due to reinvested dividends

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📈 Technical & Sentiment Indicators

RSI: 53.0 – Neutral zone, suggesting balanced momentum.

MACD: 3.92 – Mild bullish crossover.

Volume Dip – Below weekly average, indicating reduced participation.

DMA 50 & 200: Price is above both, confirming medium-term strength.

Analyst consensus shows a 1-year price target of ₹467, implying ~16% upside from current levels

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💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹385–₹395, near DMA 50 and below current price.

Current Price ₹401: Slightly above ideal entry — consider partial accumulation or wait for a dip.

🕰️ Long-Term Holding

Strong Hold or Accumulate on Corrections: Premium brand equity, low debt, and high ROE/ROCE make EIH Ltd. a compelling long-term play.

Watch Earnings Consistency & Institutional Sentiment: FII outflow (−0.16%) and DII inflow (+0.14%) suggest mixed sentiment, but fundamentals remain solid.

You can explore EIH Ltd.’s live share price and financial dashboard or review its long-term performance and shareholder returns for deeper insights. Let me know if you'd like a peer comparison with Indian Hotels or Lemon Tree.

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