INDHOTEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | INDHOTEL | Market Cap | 90,509 Cr. | Current Price | 636 ₹ | High / Low | 822 ₹ |
| Stock P/E | 56.8 | Book Value | 80.5 ₹ | Dividend Yield | 0.35 % | ROCE | 16.6 % |
| ROE | 13.1 % | Face Value | 1.00 ₹ | DMA 50 | 644 ₹ | DMA 200 | 692 ₹ |
| Chg in FII Hold | -1.86 % | Chg in DII Hold | 1.92 % | PAT Qtr | 570 Cr. | PAT Prev Qtr | 289 Cr. |
| RSI | 49.1 | MACD | 4.73 | Volume | 15,20,251 | Avg Vol 1Wk | 17,78,848 |
| Low price | 565 ₹ | High price | 822 ₹ | PEG Ratio | 0.17 | Debt to equity | 0.10 |
| 52w Index | 27.6 % | Qtr Profit Var | 21.6 % | EPS | 13.6 ₹ | Industry PE | 28.8 |
Core Financials:
Indian Hotels (INDHOTEL) shows solid fundamentals. ROE is 13.1% and ROCE 16.6%, reflecting decent efficiency. EPS at ₹13.6 is moderate, supported by strong quarterly PAT growth (₹570 Cr vs ₹289 Cr, +21.6%). Debt-to-equity is very low at 0.10, highlighting a strong balance sheet.
Valuation:
Stock P/E of 56.8 is significantly higher than industry average (28.8), suggesting overvaluation. PEG ratio of 0.17 highlights undervaluation relative to growth, balancing the high P/E concern. Price-to-book is ~7.9, expensive relative to intrinsic value. Dividend yield of 0.35% provides minimal income support.
Business Model & Health:
Indian Hotels operates in hospitality and luxury hotels, benefiting from tourism recovery and premium brand positioning. Competitive advantage lies in strong brand equity, diversified portfolio, and debt-light structure. However, valuations remain stretched compared to peers.
Entry Zone:
Ideal entry zone: ₹610–₹630. Current price ₹636 is near fair entry. Long-term holding is viable given strong fundamentals, but investors should monitor valuation risks.
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Positive
- Strong ROCE (16.6%) and ROE (13.1%)
- Debt-to-equity very low (0.10)
- PEG ratio (0.17) indicates undervaluation relative to growth
- Quarterly PAT growth (+21.6%)
- DII holdings increased (+1.92%)
Limitation
- High P/E (56.8) vs industry (28.8)
- Price-to-book (~7.9) expensive
- Dividend yield negligible (0.35%)
- RSI 49.1 indicates neutral momentum
Company Negative News
- FII holdings reduced (-1.86%)
- Valuation concerns due to premium multiples
Company Positive News
- Quarterly PAT growth (₹570 Cr vs ₹289 Cr)
- DII confidence improved (+1.92%)
- Technical indicators show mild bullishness (MACD 4.73)
Industry
Hospitality sector trades at industry P/E of 28.8, supported by tourism recovery and premium demand. Indian Hotels trades at a premium due to brand strength and strong fundamentals, but valuation risks remain.
Conclusion
Indian Hotels is fundamentally strong with decent efficiency, low debt, and strong brand positioning. Rating: 3.8. Entry near ₹610–₹630 is preferable. Long-term holding (5+ years) is justified, with exit strategy around ₹800–₹820 if fundamentals stagnate.
Would you like me to also prepare a hospitality sector peer comparison HTML table (Indian Hotels vs ITC Hotels vs EIH) so you can benchmark valuation, ROE, and debt levels side by side?