INDHOTEL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | INDHOTEL | Market Cap | 97,698 Cr. | Current Price | 686 ₹ | High / Low | 859 ₹ |
| Stock P/E | 65.4 | Book Value | 80.5 ₹ | Dividend Yield | 0.33 % | ROCE | 16.6 % |
| ROE | 13.1 % | Face Value | 1.00 ₹ | DMA 50 | 700 ₹ | DMA 200 | 729 ₹ |
| Chg in FII Hold | -1.05 % | Chg in DII Hold | 1.26 % | PAT Qtr | 289 Cr. | PAT Prev Qtr | 245 Cr. |
| RSI | 50.6 | MACD | -11.5 | Volume | 9,22,585 | Avg Vol 1Wk | 23,01,502 |
| Low price | 627 ₹ | High price | 859 ₹ | PEG Ratio | 0.19 | Debt to equity | 0.10 |
| 52w Index | 25.6 % | Qtr Profit Var | 12.5 % | EPS | 10.4 ₹ | Industry PE | 31.0 |
📊 Indian Hotels shows strong fundamentals with growth potential for long-term investment. ROCE at 16.6% and ROE at 13.1% reflect decent efficiency and profitability. Debt-to-equity at 0.10 highlights a low leverage profile, which is a positive. The PEG ratio of 0.19 suggests undervaluation relative to growth, though the P/E of 65.4 is significantly higher than the industry average of 31.0, indicating stretched valuations. Dividend yield at 0.33% is modest. Current price (686 ₹) is below DMA 50 (700 ₹) and DMA 200 (729 ₹), showing weak momentum but close to support levels. Quarterly PAT growth of 12.5% is encouraging, supported by rising domestic demand in the hospitality sector.
💡 Ideal Entry Zone: 650 ₹ – 690 ₹ (aligned with support levels and valuation comfort).
📈 Exit / Holding Strategy: If already holding, maintain for 3–5 years given strong ROE/ROCE and sector tailwinds. Consider partial profit booking near 850–860 ₹ resistance. Long-term holding is justified if earnings growth sustains and valuations normalize.
Positive
- 📌 ROCE at 16.6% and ROE at 13.1% show healthy efficiency.
- 📌 PEG ratio of 0.19 indicates undervaluation relative to growth.
- 📌 Debt-to-equity ratio of 0.10 highlights strong balance sheet stability.
- 📌 EPS at 10.4 ₹ supports earnings visibility.
- 📌 Quarterly PAT growth of 12.5% (245 Cr. to 289 Cr.).
Limitation
- ⚠️ P/E of 65.4 vs industry PE of 31.0 highlights stretched valuations.
- ⚠️ Dividend yield at 0.33% is negligible.
- ⚠️ Current price below DMA 50 and DMA 200 shows weak momentum.
- ⚠️ RSI at 50.6 indicates neutral momentum, limiting near-term upside.
Company Negative News
- ❌ Decline in FII holdings (-1.05%).
- ❌ Weak technical indicators (MACD -11.5).
Company Positive News
- ✅ Quarterly PAT improved from 245 Cr. to 289 Cr.
- ✅ DII holdings increased (+1.26%), showing domestic investor confidence.
- ✅ Low debt profile strengthens financial stability.
Industry
- 🏨 Industry PE at 31.0 vs stock PE 65.4 highlights premium valuation.
- 🏨 Hospitality sector growth supported by rising tourism, premium hotel demand, and domestic travel expansion.
Conclusion
🔎 Indian Hotels offers strong fundamentals with low debt, decent ROE/ROCE, and growth potential, making it a good candidate for long-term investment. Accumulation near 650–690 ₹ is ideal. Hold for 3–5 years with partial profit booking near 850–860 ₹ resistance, while monitoring valuation normalization and institutional investor trends.