U P Hotels (509960)

FairStock Score: 18/100 — RISKY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 19.83% and ROCE of 23.58% indicate efficient use of capital in the hotel business.
• Latest quarter sales of ₹57 Cr and net profit of ₹17 Cr demonstrate strong operating leverage in that period.
• Positive sales growth of 2.81%, though small, shows the enterprise is not contracting on the top line.
• Book value of ₹296.99 per share gives some asset anchor, even though the market price is far above it.

Concerns

• P/E of 26.91 and P/B of 5.19 are steep for a company with sales growth of just 2.81% and profit decline of -2.58%.
• PEG ratio of 9.58 implies the market is paying for growth that current earnings do not justify.
• Piotroski F-score of 4/9 and FairStock Score of 18/100 flag weak financial health and elevated risk.
• Zero dividend yield means investors receive no cash while the stock price remains highly valued.

AI Analysis

As a value investor, I don't buy price charts; I buy businesses. U P Hotels earns a ROE of 19.83% and ROCE of 23.58%, which are respectable numbers and suggest the hotel operation is run with reasonable capital efficiency. But those returns must be weighed against price and growth. The stock is ₹1,540 with a market cap of ₹835 Cr, or 26.91 times earnings and 5.19 times book value. For a company with sales growth of only 2.81% and profit growth of negative 2.58%, that multiple is demanding. The PEG ratio of 9.58 screams overvaluation. Graham would ask: where is the margin of safety? I can't find it. Book value is ₹296.99, yet the market asks ₹1,540 for each share; that means you are paying a huge premium for future earnings that are not yet visible. The zero dividend yield is another warning. An investor in a slow-moving hotel stock should at least receive cash while waiting. The latest quarter showed ₹57 Cr sales and ₹17 Cr profit, which is encouraging, but hotels are cyclical and one quarter can flatter. The Piotroski F-score of 4/9 and FairStock Score of 18/100 also point to financial strain and risk. Maybe the company has good assets, but a high-quality asset at the wrong price is a poor investment. I would need several quarters of improving revenue and profit, and a lower purchase price, before I treat U P Hotels as a candidate. For now, it is a case of 'interesting company, unattractive price.'

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer