Benares Hotels (509438)
Slow GrowerFairStock Score: 31/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹8,101 |
| Market Cap | ₹1,061.4 Cr |
| P/E Ratio | 28.06 |
| ROCE | 37.33% |
| ROE | 30.65% |
| Dividend Yield | 0.26% |
| Profit Growth | 5.68% |
| Debt/Equity | — |
| Sales Growth | 7.1% |
| 52-Week Range | ₹9,000 — ₹10,860 |
| Sector | Leisure Services |
| Book Value | ₹1,103.9 |
Strengths
- ROE of 30.65% and ROCE of 37.33% reflect exceptional capital productivity.
- Latest quarter net margin of ~33% (₹14 Cr profit on ₹42 Cr sales) shows pricing power.
- Piotroski F-Score of 7/9 and no reported debt indicate solid financial health.
- Scarcity value of a heritage hotel in a major pilgrimage city provides a narrow moat.
Concerns
- Valuation is expensive: P/E of 28.06, P/B of 7.34, and PEG of 4.39.
- Growth is modest—sales +7.10% and profit +5.68%—not enough to justify the multiple.
- Current price of ₹8,101 sits below the reported 52-week low of ₹9,000, a red flag or data anomaly.
- Dividend yield of only 0.26% offers little return to minority shareholders; promoter holding is also undisclosed.
AI Analysis
Benares Hotels is a fine business, but I would not buy it at this price. The numbers show extraordinary capital efficiency: ROE of 30.65% and ROCE of 37.33%, with debt seemingly absent. A net margin of 33% in the latest quarter—₹14 Cr profit on ₹42 Cr sales—indicates real pricing power. This is likely a franchise built on a scarce location in Varanasi and a heritage hotel brand, a moat, though a narrow one. The Piotroski score of 7 suggests the balance sheet is not deteriorating. But growth tells another story: sales up only 7.10% and profits up 5.68%. At P/E of 28.06 and P/B of 7.34, you are paying a very high price for modest growth. PEG of 4.39 confirms it—growth does not justify the multiple. Dividend yield of 0.26% is negligible for a minority shareholder. Even more concerning, the current price of ₹8,101 is below the stated 52-week low of ₹9,000. That inconsistency is a red flag; something has changed or the data is unreliable. The FairStock Score of 29/100 labels it risky, and I agree. In Graham's terms, this fails the margin of safety. A wonderful business can be a poor investment at too high a price. For a hotel business—inherently exposed to economic cycles, seasonality, and competition—I would want a substantial discount to intrinsic value. I don't see it. I would place it on a watchlist, not in a portfolio. Patience is the investor's greatest ally; let the price come to the value.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer