Viceroy Hotels (VHLTD)

FairStock Score: 58/100 — STEADY

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

Key Financials

Strengths

• Low debt-to-equity of 0.20, indicating a conservative balance sheet
• High promoter holding of 84.11%, aligning management with minority shareholders
• Piotroski F-score of 7/9 suggests sound fundamentals
• P/E of 12.26 is reasonable, and PEG of 0.46 implies market underestimating growth
• Strong profit growth of 50.34% with latest quarterly net profit of ₹11 Cr on ₹39 Cr sales

Concerns

• Top-line growth is weak at just 2.41%, raising doubts about long-term revenue sustainability
• P/B of 5.27 is rich versus ROE of 11.11%, leaving a thin margin of safety
• Zero dividend yield means shareholders see no cash returns while waiting
• Profit growth may be cyclical or one-off, not necessarily durable compounding

AI Analysis

When I look at Viceroy Hotels, the first thing I notice is a paradox: sales growth of just 2.41%, yet profit growth of 50.34%. That tells me the top line is stagnant while the bottom line is doing the heavy lifting. As Graham said, 'In the short run, the market is a voting machine, but in the long run, it is a weighing machine.' The market is rewarding this company today, but I must weigh the sustainability of those profits. The P/E of 12.26 is not demanding, and the PEG ratio of 0.46 suggests cheapness relative to recent earnings growth. But I am wary of earnings that outpace revenue by that much—it often means cost cuts, operating leverage, or a cyclical upswing, not durable compounding. The balance sheet is respectable: debt-to-equity of just 0.20 and a Piotroski F-score of 7/9 indicate decent financial health. Promoter holding at 84.11% aligns interests and reduces agency risk, which I like. However, the P/B of 5.27 against an ROE of 11.11% means I am paying a large premium for a modest return on equity. At ₹135.90, the market capitalisation is ₹993 Cr, but book value per share is only ₹25.80. That leaves little margin of safety. The zero dividend yield also means I rely entirely on capital appreciation. This smells like a cyclical hotel business in an up-phase, not a compounding machine. I would need to see real revenue acceleration or a lower price before treating it as a serious value investment. Until then, it belongs in the 'too hard' pile for a conservative investor like me.

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