Advani Hotels. (ADVANIHOTR)

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

Key Financials

Strengths

• Near-zero debt: D/E of 0.01 gives a very strong balance sheet.
• High capital efficiency: ROE of 35% and ROCE of 45.29% are exceptional.
• Promoter holding at 50.25% aligns management with minority shareholders.
• Dividend yield of 3.48% provides some income while waiting.
• Latest quarter earned ₹11 Cr net profit on ₹36 Cr sales, showing current earning power.

Concerns

• Stagnant growth: sales up just 2.70% and profit down 4.95%.
• Expensive valuation: P/E 20.86, P/B 7.43, and PEG 7.73 leave little margin of safety.
• Piotroski F-Score of 4/9 and FairStock Score of 28/100 flag operational and balance-sheet stress.
• Price of ₹54.70 is far above book value of ₹7.36, so asset backing is thin.

AI Analysis

At first glance, Advani Hotels looks like a capital-efficient business: ROE at 35% and ROCE at 45.29%, with debt-equity of only 0.01 and a 3.48% dividend yield. That is precisely the kind of financial discipline I admire. Promoter holding of 50.25% also signals skin in the game. But as Graham would say, price is what you pay, value is what you get. At ₹54.70, I am being asked to pay 20.86 times earnings and 7.43 times book value for a company whose sales grew just 2.70% and whose profit actually declined 4.95%. That is not a recipe for margin of safety. The PEG ratio of 7.73 tells me the valuation is far ahead of any growth the business is delivering. What good is a superb book if the price already assumes perfection? The Piotroski F-Score of 4 out of 9 is a warning flag: operational efficiency and financial strength may be deteriorating beneath the attractive headline ratios. The FairStock Score of 28/100 echoes my caution. In the latest quarter, sales of ₹36 crore produced net profit of ₹11 crore, so there is underlying earning power, but one quarter does not make a trend. I would want several quarters of growth before extracting my wallet. This is a slow grower at a growth-stock price; I do not pay growth multiples for no growth. I would rather miss a move than overpay for a business with a 2.7% revenue rise and falling profits. For a margin of safety, I would need a lower price, or at least visible acceleration in earnings. Patience is the first virtue of the value investor.

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