EIHOTEL - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 3.8
| Stock Code | EIHOTEL | Market Cap | 22,701 Cr. | Current Price | 363 ₹ | High / Low | 435 ₹ |
| Stock P/E | 32.4 | Book Value | 68.6 ₹ | Dividend Yield | 0.42 % | ROCE | 21.9 % |
| ROE | 17.5 % | Face Value | 2.00 ₹ | DMA 50 | 379 ₹ | DMA 200 | 380 ₹ |
| Chg in FII Hold | 0.01 % | Chg in DII Hold | 0.39 % | PAT Qtr | 97.6 Cr. | PAT Prev Qtr | 134 Cr. |
| RSI | 31.8 | MACD | -3.76 | Volume | 1,14,641 | Avg Vol 1Wk | 87,409 |
| Low price | 293 ₹ | High price | 435 ₹ | PEG Ratio | 0.31 | Debt to equity | 0.04 |
| 52w Index | 49.1 % | Qtr Profit Var | -15.8 % | EPS | 11.0 ₹ | Industry PE | 34.1 |
📊 Analysis: EIHOTEL demonstrates healthy fundamentals with ROE at 17.5% and ROCE at 21.9%, both supportive of long-term compounding. Debt-to-equity at 0.04 reflects a nearly debt-free balance sheet. EPS at 11.0 ₹ is modest but consistent, and PEG ratio at 0.31 suggests attractive growth-adjusted valuation. Valuation is reasonable with P/E at 32.4 compared to industry average of 34.1. Dividend yield at 0.42% provides modest shareholder returns. Technicals show RSI at 31.8 (oversold), MACD negative (-3.76), and price below both 50 DMA (379 ₹) and 200 DMA (380 ₹), indicating bearish sentiment and potential correction. Quarterly PAT declined from 134 Cr. to 97.6 Cr. (-15.8%), raising short-term concerns but long-term fundamentals remain intact.
💡 Entry Zone: Ideal entry would be in the 320–350 ₹ range, closer to valuation comfort and support levels. Current price (363 ₹) is slightly above fair entry zone, making patience advisable for better risk-reward.
📈 Exit Strategy: If already holding, maintain positions for medium to long-term (2–4 years) given strong ROE/ROCE and low debt. Consider partial profit booking near 410–430 ₹ resistance if earnings weakness persists. Long-term holding is favorable if profitability stabilizes and demand in the hospitality sector continues to grow.
Positive
- 📌 Strong ROE (17.5%) and ROCE (21.9%) support compounding potential
- 📌 Debt-to-equity at 0.04 indicates robust balance sheet
- 📌 PEG ratio at 0.31 highlights attractive growth-adjusted valuation
- 📌 EPS at 11.0 ₹ reflects consistent profitability
Limitation
- ⚠️ Quarterly PAT decline (-15.8%) raises sustainability concerns
- ⚠️ Dividend yield at 0.42% is modest
- ⚠️ RSI at 31.8 indicates oversold momentum but bearish trend persists
- ⚠️ Price trading below DMA levels signals weak sentiment
Company Negative News
- ❌ PAT dropped from 134 Cr. to 97.6 Cr.
- ❌ Weak technical momentum with MACD negative (-3.76)
Company Positive News
- ✅ DII holding increased (+0.39%)
- ✅ FII holding stable (+0.01%)
- ✅ Strong balance sheet with minimal debt
Industry
- 🏦 Industry PE at 34.1, sector moderately valued
- 🏦 Hospitality sector benefiting from tourism recovery and premium demand growth
Conclusion
🔎 EIHOTEL is moderately attractive for long-term investment with strong ROE/ROCE, debt-free balance sheet, and attractive PEG valuation. Entry near 320–350 ₹ offers margin of safety. Existing holders can maintain positions for 2–4 years, targeting exits near 410–430 ₹ unless profitability weakens further. Long-term compounding potential remains favorable provided earnings stabilize and sector demand continues to grow.
Would you like me to extend this into a peer benchmarking overlay comparing EIHOTEL against hospitality peers like Indian Hotels, Chalet Hotels, and Lemon Tree to highlight relative valuation comfort zones?
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