Mahindra Holiday (MHRIL)

FairStock Score: 3/100 — RISKY

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

Key Financials

Strengths

• Sales growth of 10.95% shows revenue momentum in the latest period.
• Promoter holding of 66.74% aligns management with minority shareholders.
• Reported ROE of 22.18% appears strong, though leverage-driven.
• Latest quarter revenue of ₹753 crore indicates meaningful scale.

Concerns

• Profit growth is -111.37%, and latest quarter net profit is just ₹1 crore on ₹753 crore sales.
• Debt-to-equity of 4.71 is very high, making the business financially fragile.
• Piotroski F-Score of 4/9 points to weak fundamental health.
• Zero dividend yield and high valuations (P/E 60.54, P/B 5.04) leave no margin of safety.

AI Analysis

I have been asked to look at Mahindra Holiday. At first glance, the price-to-earnings multiple of 60.54 makes me blink. But in cyclical businesses like hotels, low earnings inflate the P/E; the real question is what an owner will earn across the cycle. The company grew sales nearly 11%, but the latest quarter tells a more sobering story: ₹753 crore of revenue produced only ₹1 crore of net profit. That is not a franchise with pricing power; that is a business operating with almost no margin of safety. Return on equity of 22.18% looks attractive, but with debt-to-equity of 4.71, that return is borrowed, not earned. The return on capital employed is only 9.73%, so leverage is doing the heavy lifting. The Piotroski F-score of 4 out of 9 suggests deteriorating fundamentals, and profit growth of negative 111% confirms the trouble. A zero dividend yield means the shareholder must wait for the cycle, and book value of ₹53 against a price of ₹267 means the market is pricing in a strong recovery. Mr. Graham would ask: is there a margin of safety? At 5.04 times book and 5.53 times PEG, I do not see it. Promoter holding at 66.74% is positive, but even good stewardship cannot overcome excessive debt and thin margins. This looks like a cyclical business in a weak patch, not a stalwart with durable economics. I would put it on the watch list, but I would not buy at this price. The numbers do not give me the confidence that future earnings will justify today's valuation. Better to wait for either a stronger balance sheet or a much lower price.

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