Benares Hotels Limited

Consumer Cyclical — Lodging · NSE

₹10,540.00+₹329.00 (+3.22%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of Benares Hotels Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Benares Hotels Limited operates hotels in India. It operates hotels under the Taj Ganges and Taj Nadesar Palace names in Varanasi and The Ginger Hotel name in Gondia, Maharashtra. The company was incorporated in 1971 and is headquartered in New Delhi, India.

IndustryLodging

SectorConsumer Cyclical

Employees161

Annual revenue₹139 Cr

How does it make money?

Turns over ₹139 Cr a year. Of every ₹100 of sales, about ₹31 reaches shareholders as profit, with ₹47 left at the operating level before interest, tax and depreciation. Each of its 161 employees supports ₹86.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹86.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 26.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 21.8% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE25.9%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +49% while net margin moved +24% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+49%

Margin effect+24%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 30.9x already prices in growth
✗ P/B of 6.11x is a steep premium to book

Quality vs. Valuation

Company Quality

72/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

61/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

30.9x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 55% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -55%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.8x

PEG

1.36

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 40.4% to 47.4% over 3 years.
High return on capital employed
ROCE of 26.2% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 23.4% to 20.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 28.9% to 26.2% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.94x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 26.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 40.4% to 47.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 55% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.94x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 23.4% to 20.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.2% CAGR
Latest reported year was 37.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 45%✓ 47.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 23%✓ 26.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 10 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹1,370 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.9x

Fair

Fairly valued against the generic band

P/B Ratio

6.11x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹341.42

Profitable

Profitable on a per-share basis

ROE

21.8%

Strong

Strong capital efficiency

ROCE

26.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.94x

High

High leverage

Revenue Growth (YoY)

37.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

7.9%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

14.5%

Good

Assets are working hard

Operating Margin

27.0%

Good

Healthy core-business profitability

Net Margin

28.7%

Good

Strong bottom-line conversion

Current Ratio

4.08

Comfortable

Healthy short-term liquidity

52W Range Position

37%

Mid-range

Technical Snapshot

RSI (14)

67.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹93 Cr	₹121 Cr	₹135 Cr	₹139 Cr	+14.2%
EBITDA	₹38 Cr	₹55 Cr	₹65 Cr	₹66 Cr	+20.5%
EBITDA Margin	40.4%	45.3%	48.0%	47.4%	—
PAT (Net Profit)	₹23 Cr	₹36 Cr	₹43 Cr	₹43 Cr	+22.7%
EPS	₹179.85	₹277.25	₹332.69	₹332.61	+22.7%
ROE	23.4%	27.1%	25.0%	20.3%	—
ROCE	28.9%	34.0%	32.2%	26.2%	—
Total Debt	₹4 Cr	₹4 Cr	₹4 Cr	₹4 Cr	+1.8%
Free Cash Flow	₹26 Cr	₹29 Cr	₹24 Cr	-₹11 Cr	—

🟢 Revenue has grown at 14.2% a year over 3 years.

🟢 EBITDA has grown at 20.5% a year over 3 years.

🟢 EBITDA Margin has risen from 40.4% to 47.4% over 3 years (+7.0 pts).

🟢 PAT (Net Profit) has grown at 22.7% a year over 3 years.

🟢 EPS has grown at 22.7% a year over 3 years.

🔴 ROE has fallen from 23.4% to 20.3% over 3 years (-3.1 pts).

🔴 ROCE has fallen from 28.9% to 26.2% over 3 years (-2.7 pts).

🟡 Total Debt has been broadly flat over 3 years (1.8% a year).

🔴 Free Cash Flow has turned negative, from ₹26 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹257 Cr

Total Liabilities

₹44 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹49 Cr

Capex

-₹60 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.6%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

3 positive1 mixed2 general

Benares Hotels Stock Signals to Watch This Week

Univest, 25 Sept

Benares Hotels FY26 Results: ₹4,323.89L Profit, 250% Dividend, Board Changes

scanx.trade, 29 AprCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Benares Hotels Q1 PAT rises 9% YoY to Rs 8 crore

Business Standard, 15 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Benares Hotels Q1 Revenue Jumps 36% to ₹34 Cr as Margins Compress to 36.87%

Sahi, 14 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Benares Hotels Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

Canara Robeco, Benares Hotels, Ador Welding, Craftsman Automation: Dividend Record Date: Last Day To Buy Shares To Qualify

NDTV Profit, 15 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑