EIH Assoc.Hotels (EIHAHOTELS)
CyclicalFairStock Score: 39/100 — MIXED
Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹299.25 |
| Market Cap | ₹1,823.52 Cr |
| P/E Ratio | 20.75 |
| ROCE | 25.7% |
| ROE | 21.29% |
| Dividend Yield | 1.17% |
| Profit Growth | 11.56% |
| Debt/Equity | 0.01 |
| Sales Growth | -10.45% |
| Promoter Holding | 75% |
| 52-Week Range | ₹266.65 — ₹416 |
| Sector | Leisure Services |
| Book Value | ₹98.86 |
Strengths
- Near-zero leverage: Debt/Equity of 0.01 provides strong balance-sheet safety.
- High returns: ROE of 21.29% and ROCE of 25.70% show efficient capital use.
- Promoter holding of 75% aligns management interests with minority shareholders.
- Piotroski F-Score of 6/9 indicates reasonably sound financial fundamentals.
- Dividend yield of 1.06% offers small income support.
Concerns
- Sales growth is negative at -2.66%, showing a stalled top line.
- Valuation is rich: P/E of 20.37 and P/B of 4.33 with a PEG of 2.60.
- Quarterly net margin of ~32% on ₹129 Cr sales looks unsustainably high for a hotel business.
- FairStock Score of 34/100 flags the stock as risky.
AI Analysis
Let me examine EIH Associates as a business owner. The first thing I see is a fortress balance sheet: debt-to-equity of 0.01, and it earns 21.29% on equity and 25.70% on capital. That is genuinely good. A promoter holding of 75% also aligns interests and suggests a business with some intangible advantage in its hotel segment. But a wonderful business must be bought at a sensible price; here the price is not sensible. The stock trades at 20.37 times trailing earnings, 4.33 times book value, and nearly 4 times annualised sales based on the latest quarter. Meanwhile sales have declined by 2.66%. Profit growth of 7.82% looks okay until I see the PEG ratio of 2.60, meaning I am paying more than double the growth rate. In hotels, today's profit can evaporate in a downturn because fixed costs and discretionary travel vanish. The quarterly numbers show ₹41 Cr net profit on ₹129 Cr sales, a 32% margin that is far above what the sector normally delivers; I would not extrapolate that. The 52-week range of ₹266.65 to ₹434.90 tells me this is a volatile, cyclical stock. FairStock's score of 34/100 reinforces my caution. Graham would say margin of safety is missing. Even with excellent returns and no leverage, paying 20 times earnings for a no-growth, cyclical hotel company is not value investing; it is hope. I will wait for a lower price or evidence that growth has resumed before acting.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer