THELEELA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.6
| Stock Code | THELEELA | Market Cap | 14,227 Cr. | Current Price | 425 ₹ | High / Low | 475 ₹ |
| Stock P/E | 64.1 | Book Value | 268 ₹ | Dividend Yield | 0.00 % | ROCE | 5.06 % |
| ROE | 1.08 % | Face Value | 10.0 ₹ | DMA 50 | 421 ₹ | DMA 200 | 425 ₹ |
| Chg in FII Hold | 0.52 % | Chg in DII Hold | -0.50 % | PAT Qtr | 78.3 Cr. | PAT Prev Qtr | 72.8 Cr. |
| RSI | 52.9 | MACD | -2.21 | Volume | 1,37,236 | Avg Vol 1Wk | 13,86,292 |
| Low price | 381 ₹ | High price | 475 ₹ | PEG Ratio | 2.10 | Debt to equity | 0.05 |
| 52w Index | 47.3 % | Qtr Profit Var | 673 % | EPS | 6.83 ₹ | Industry PE | 32.6 |
📊 Financials: The Leela has a market cap of 14,227 Cr. with quarterly PAT improving to 78.3 Cr. from 72.8 Cr. (673% YoY growth). However, ROE at 1.08% and ROCE at 5.06% are weak, showing poor efficiency in generating returns. Debt-to-equity ratio of 0.05 indicates very low leverage, which is positive. EPS stands at 6.83 ₹, but margins remain thin.
💹 Valuation: Current P/E of 64.1 is significantly higher than the industry average of 32.6, suggesting overvaluation. P/B ratio is ~1.58 (425 ₹ / 268 ₹), which is reasonable. PEG ratio at 2.10 indicates growth is priced expensively. Intrinsic value appears lower than current market price, making the stock richly valued.
🏨 Business Model & Competitive Advantage: The Leela operates in luxury hospitality, a sector with strong brand-driven demand but cyclical risks. Its competitive advantage lies in premium positioning and brand recognition. However, profitability is highly sensitive to tourism cycles and economic conditions.
📈 Entry Zone: With RSI at 52.9 (neutral) and DMA 200 near 425 ₹, the stock is trading close to fair technical levels. A better entry zone would be around 380–400 ₹, closer to its 52-week low, to mitigate valuation risk.
🕰️ Long-Term Holding Guidance: The company has brand strength and growth potential in hospitality, but weak return metrics and high valuation suggest cautious accumulation. Long-term holding is viable only if profitability improves and valuations normalize.
Positive
- Strong brand presence in luxury hospitality.
- Debt-to-equity ratio at 0.05 shows minimal leverage.
- Quarterly profits improving (78.3 Cr. vs 72.8 Cr.).
- FII holdings increased by 0.52%, showing investor confidence.
Limitation
- High P/E (64.1) compared to industry average (32.6).
- Weak ROE (1.08%) and ROCE (5.06%).
- Low trading volumes compared to average weekly volume.
- PEG ratio of 2.10 indicates expensive growth.
Company Negative News
- Profitability remains weak despite revenue growth.
- DII holdings decreased by 0.50%, showing reduced domestic confidence.
Company Positive News
- Strong YoY profit growth (673%).
- Luxury hospitality demand recovery supports revenue expansion.
Industry
- Hospitality sector is cyclical but benefits from tourism growth.
- Industry P/E at 32.6 indicates moderate valuation compared to The Leela.
Conclusion
⚖️ The Leela is fundamentally stable with strong brand equity but weak return metrics and stretched valuations. Entry is advisable near 380–400 ₹ for long-term investors. Sustained profitability improvement is essential before strong conviction in long-term holding.
Would you like me to also create a side-by-side HTML table comparing The Leela’s metrics with industry averages for quick visualization?