Brigade Hotel (BRIGHOTEL)

FairStock Score: 34/100 — RISKY

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

Key Financials

Strengths

• Promoter holding of 74.09% aligns management with minority shareholders.
• Profit growth of 140.07% and Piotroski F-Score of 7/9 point to a strengthening operating turnaround.
• Debt/equity of 0.37 and ROCE of 14.13% show a reasonably capitalised business.
• Latest quarter net profit of ₹22 Cr on sales of ₹139 Cr demonstrates operating leverage.

Concerns

• P/E of 49.32 and P/B of 2.59 leave little margin of safety above book value of ₹26.31.
• ROE is N/A, so true profitability on shareholder equity cannot be judged.
• No dividend means investors rely solely on capital gains, risky for a cyclical hotel stock.
• FairStock Score of 34/100 flags elevated risk and hotel earnings are vulnerable to demand cycles.

AI Analysis

As a value investor, I start with financial facts, not hope. Brigade Hotel is a hotel business, and I have learned that such businesses are capital-hungry, cyclical, and generally not my favourite. At ₹68.26, the company is valued at ₹2,308 Cr. Book value per share is ₹26.31, so I am paying 2.59 times book value. The trailing P/E of 49.32 is expensive, though profit growth of 140.07% does explain some excitement. Sales growth of 11.59%, however, is modest. The latest quarter shows sales of ₹139 Cr and net profit of ₹22 Cr, which means a net margin near 16% — good for a hotel in a good cycle, but hotel margins are fragile when travel slows. The debt/equity ratio at 0.37 is manageable, and ROCE of 14.13% is reasonable. Promoter holding of 74.09% is a positive; the owners are with me. The Piotroski F-score of 7 out of 9 tells me fundamentals are improving, but the FairStock Score of 34/100 warns of risk. That score is a useful brake on my enthusiasm. There is no dividend, so my entire return depends on capital gains. ROE is not available, so I cannot assess how well equity is being turned into profit. Graham would ask for a margin of safety. At ₹68.26, I don't see it. The PEG of 0.65 may look tempting, but that ratio assumes today's 140% profit growth will continue, and hotel profits are cyclical. The market has already priced in a strong recovery. A hotel cycle can turn quickly, and this price leaves little room for a bad quarter. I would rather wait and watch.

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