Kamat Hotels (KAMATHOTEL)

FairStock Score: 42/100 — MIXED

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

Key Financials

Strengths

• Sales growth of 11.64% shows revenue momentum despite industry headwinds.
• ROCE of 19.58% indicates decent capital efficiency in a capital-intensive business.
• Promoter holding of 57.78% aligns majority shareholders with minority investors.
• Latest quarter net profit of ₹19 Cr on sales of ₹118 Cr suggests a healthy operating margin of roughly 16%.

Concerns

• Profit growth is down 23.97%, and the Piotroski F-Score of 4/9 signals deteriorating financial health.
• P/E of 17.68 is not cheap for a business whose earnings are declining; the earnings yield is not dependable.
• No dividend means investors receive zero income while waiting for a cyclical recovery.
• Debt/Equity of 0.87 adds risk in a cyclical, asset-heavy industry, especially with falling profits.

AI Analysis

When I looked at Kamat Hotels, I first reminded myself that hotels are a cyclical business, not a compounder. The numbers confirm both attraction and caution. Sales are growing at 11.64%, and the company earns an ROCE of 19.58%, which is respectable and suggests the operating assets are being used well. Return on equity is 12.20%, and book value stands at ₹112.67 against a price of ₹172.25, so you are paying 1.53 times book. That is not outrageous, but it is not a Graham bargain. What worries me is the trend. Profit growth is down 23.97%, and the Piotroski F-Score is only 4 out of 9, indicating weak financial health. A positive sales number that does not reach the bottom line often means competitive pressure or rising costs — and in hotels, that can be magnified by the cycle. Debt to equity of 0.87 is manageable, but I do not like debt in a cyclical business when earnings are falling. There is no dividend, so the patient investor gets no income while waiting. I would not call this a wonderful business with a deep moat. Kamat Hotels may have brand equity, but the numbers show a mid-sized player facing pressure. At ₹172.25, the stock is near the low end of its 52-week range, down from ₹329.80. The P/E of 17.68 gives an earnings yield of only about 5.6%, and with profits declining, that yield is not dependable. This stock is a cyclical, not a stalwart. I need to see profit growth turn positive, the F-score improve, and leverage come down before I would want my capital here. Price alone is not enough.

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