INDHOTEL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Evaluation: Indian Hotels Company Ltd. (INDHOTEL)

Investment Rating: 3.8

🔍 Fundamentals Overview

ROE: 16.1% and ROCE: 17.2% — solid but not extraordinary; decent capital efficiency for a consumer-centric business.

EPS: ₹13.7 — attractive earnings base.

PEG Ratio: 0.64 — strong indicator of undervaluation relative to growth; this is a big positive.

Debt-to-Equity: 0.28 — reasonably conservative balance sheet, manageable leverage.

Dividend Yield: 0.30% — weak for income-focused investors, indicating reinvestment of profits into expansion rather than payouts.

📉 Technical & Valuation Indicators

Stock PE: 62.0 vs Industry PE: 37.4 — appears overvalued at current levels, possibly factoring in future growth.

MACD: -2.38 and RSI: 47.0 — neither deeply bullish nor bearish; shows consolidation.

Price near 200-DMA (₹746) — implies potential support, but breakout strength is absent.

Volume aligned with average — neutral sentiment.

Quarterly PAT dropped from ₹524 Cr to ₹296 Cr — notable decline, may reflect cyclicality or one-off impacts.

🎯 Ideal Entry Zone: ₹695 – ₹730 This range provides a more comfortable valuation buffer while staying above strong technical support around ₹680.

🧭 Strategy If Already Invested

✅ Suggested Holding Period: 2–4 years

Good compounder with branding moat and steady sector tailwinds in hospitality.

Hold if

ROE/ROCE remain stable above 15%

EPS crosses ₹16 within next 4–6 quarters

PEG stays under 1, confirming growth-adjusted value

Expansion plans or premium offerings drive margin improvements

🚪 Exit Strategy

Partial Exit: Around ₹875–₹895 if price nears all-time high with weak RSI/MACD or poor volume confirmation.

Full Exit If

PEG rises above 1.2 with no EPS growth support

ROE drops below 12% consistently

FII/DII activity deteriorates for 2+ quarters

PAT stagnates below ₹300 Cr and margin compression persists

INDHOTEL brings steady long-term promise, especially for those banking on India’s luxury tourism and premium hospitality growth story. Not a high-flying disruptor, but a stable operator with visible runway.

Want to dissect its next 5-year strategy or contrast it with Lemon Tree or Chalet Hotels? I'm ready when you are 🍽️🛎️

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