INDHOTEL - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 3.7

📊 Core Financials

• Revenue & Profit: Quarterly PAT rose from ₹245 Cr. to ₹289 Cr. (12.5% growth).
• Margins: ROE (13.1%) and ROCE (16.6%) show moderate efficiency.
• Debt: Debt-to-equity ratio at 0.10 indicates very low leverage risk.
• Cash Flows: Dividend yield of 0.31% is minimal, suggesting reinvestment focus.

💹 Valuation Indicators

• P/E Ratio: 69.6 vs Industry PE of 34.1 → trading at a steep premium.
• P/B Ratio: Current Price ₹730 / Book Value ₹80.5 ≈ 9.1 (premium valuation).
• PEG Ratio: 0.21 → attractive relative to growth prospects.
• Intrinsic Value: Overvalued on earnings multiples, but supported by strong growth outlook.

🏢 Business Model & Competitive Advantage

• Indian Hotels operates luxury and mid-scale hotels under the Taj brand.
• Strong brand recognition and heritage provide competitive advantage.
• Expansion in leisure and business travel segments supports long-term growth.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Reasonable accumulation between ₹670–₹710.
• Long-Term Holding: Suitable for growth-oriented investors, but premium valuation requires cautious entry.

✅ Positive

• Quarterly profit growth of 12.5%.
• Low debt-to-equity ratio (0.10).
• DII holdings increased (+1.01%).

⚠️ Limitation

• High P/E ratio (69.6) compared to industry average.
• Dividend yield is minimal (0.31%).
• Stock trading below 200 DMA (₹742), showing medium-term weakness.

📉 Company Negative News

• Decline in FII holdings (-1.04%).
• Premium valuation may limit near-term upside.

📈 Company Positive News

• Quarterly profits improved.
• DII holdings increased, showing domestic institutional support.
• PEG ratio of 0.21 indicates strong growth potential relative to valuation.

🏭 Industry

• Industry PE at 34.1 suggests INDHOTEL trades at a premium.
• Hospitality sector benefits from rising tourism and corporate travel demand.
• Peers trade at lower multiples, highlighting INDHOTEL’s premium positioning.

🔎 Conclusion

Indian Hotels demonstrates strong brand equity, consistent profit growth, and low leverage.

However, high P/E and P/B ratios reflect premium valuations, limiting near-term upside.

Accumulation near ₹670–₹710 is recommended for long-term investors seeking exposure to India’s growing hospitality sector, with cautious allocation due to elevated valuations.