Pecos Hotels (539273)

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

Key Financials

Strengths

• ROCE of 31.66% shows strong capital efficiency
• Sales growth of 7.61% is positive in a competitive industry
• Latest quarter is profitable with ₹6 Cr sales and ₹1 Cr net profit
• Market cap of ₹50 Cr allows room for operational improvements to move the needle

Concerns

• Trailing P/E of 31.63 is expensive given profit decline of -10.59%
• PEG ratio of 4.16 indicates valuation is not supported by growth
• Piotroski F-score of 4/9 suggests weakening financial health
• Insufficient data on book value, debt, and promoter holding reduces ability to assess margin of safety

AI Analysis

Pecos Hotels presents an interesting but incomplete picture. The 31.66% ROCE is genuinely impressive; it tells me the business has earned high returns on the capital it employs. Sales are also growing at 7.61%, and the latest quarter shows ₹6 Cr of sales producing ₹1 Cr of net profit. That sounds like a healthy little restaurant company. But the trouble starts when I connect price with fundamentals. The market cap is ₹50 Cr, yet the trailing P/E is 31.63 while profit has fallen 10.59%. That is a poor trade-off. Graham taught me to buy with a margin of safety, not to pay a rich multiple for declining earnings. The PEG ratio of 4.16 reinforces my skepticism: the promised growth is nowhere close to justifying the price. Also, the Piotroski F-score is only 4 out of 9, which is a clear deterioration signal. I cannot ignore that. A retail investor in India must also respect how brutal the restaurant business can be—tastes shift, competition is intense, and fixed costs are high. At ₹381.95, the stock is close to its 52-week high of ₹420.05, so the market is already pricing in good news. The dividend yield of 1.08% offers negligible downside protection. Without reliable data on book value, debt, or promoter holding, I cannot perform the full Graham appraisal I would want. This is not a business I would rush to buy. It could become interesting if the price falls substantially, or if profit growth turns positive and proves the high ROCE is durable. Until then, I would simply watch and wait.

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