Howard Hotels Limited

Consumer Cyclical — Lodging · BSE

₹19.40₹0.00 (0.00%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Howard Hotels Limited owns, operates, and manages hotels, palaces, and resorts in India. Howard Hotels Limited was incorporated in 1989 and is based in Agra, India.

IndustryLodging

SectorConsumer Cyclical

Employees77

Annual revenue₹16 Cr

How does it make money?

Turns over ₹16 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 77 employees supports ₹20.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹20.3 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?Little sign of one

Returns on capital of 5.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +52% while net margin moved -70% 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+52%

Margin effect-70%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 5.0% is below 10% — capital is not working hard
✗ ROCE has fallen by 4.9 points — returns are eroding
✗ EBITDA margin of 11.1% is thin — little cushion if costs rise
✗ Net margin of 0.7% is slim
• Revenue has compounded at 15.0% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

37/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

161.7x

3Y Median

30.0x

40 monthly readings · mean 35.9x · range 17.9x–58.5x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 440% above its 3y median of 30.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 134% above the peer median of 69.2x.

vs. its own history

Expensive

30.0x median over 40 months · +440%

vs. sector peers

Expensive

69.2x median of 4 peers · +134%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

11.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 191% over 3 years.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 7.4% to 2.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 10.0% to 5.0% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.9 points, from 18.1% to 11.1%.
🔴Inventory building faster than salesFinancial
Inventory up 118% against revenue up 52% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 55% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹2 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Margins are being competed away
EBITDA margin has fallen from 18.1% to 11.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 440% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 7.4% to 2.8%. 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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 11% a year✓ 15.0% CAGR
Latest reported year was -15.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

4 / 11 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 2 neutral · 5 weak

Market Cap

₹18 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

161.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.48x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.12

Profitable

Profitable on a per-share basis

ROE

2.8%

Weak

Weak capital efficiency

ROCE

5.0%

Weak

Low return on total capital employed

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

-15.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-21.8%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

₹2 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-26.1%

Weak

Thin margins leave little room for error

Net Margin

0.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.04

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.72

Defensive

Steadier than the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

18.7 / 18.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹13 Cr	₹16 Cr	₹16 Cr	+15.0%
EBITDA	₹2 Cr	₹2 Cr	₹2 Cr	₹2 Cr	-2.1%
EBITDA Margin	18.1%	15.4%	12.0%	11.1%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹0 Cr	₹0 Cr	-23.4%
EPS	₹0.81	₹1.04	₹0.47	₹0.37	-23.0%
ROE	7.4%	8.6%	3.7%	2.8%	—
ROCE	10.0%	9.0%	6.1%	5.0%	—
Total Debt	₹3 Cr	₹5 Cr	₹5 Cr	₹3 Cr	+7.2%
Free Cash Flow	₹1 Cr	-₹1 Cr	₹1 Cr	₹2 Cr	+42.7%

🟢 Revenue has grown at 15.0% a year over 3 years.

🔴 EBITDA has shrunk at 2.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 18.1% to 11.1% over 3 years (-6.9 pts).

🔴 PAT (Net Profit) has shrunk at 23.4% a year over 3 years.

🔴 EPS has shrunk at 23.0% a year over 3 years.

🔴 ROE has fallen from 7.4% to 2.8% over 3 years (-4.5 pts).

🔴 ROCE has fallen from 10.0% to 5.0% over 3 years (-4.9 pts).

🔴 Total Debt has grown at 7.2% a year over 3 years.

🟢 Free Cash Flow has grown at 42.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹18 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.2%

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

6 general

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

Value Research, 31 Aug

Howard Hotels Ltd (HOWARHO): Micro-Cap Hospitality Story

Kalkine India, 14 Sept

Krishna GVK Luxury Hotels (NSEI:TAJGVK) - Stock Analysis

Simply Wall Street, 10 Sept

Is Howard Hughes Holdings (HHH) Attractive After A Mixed Five Year Share Price Performance

Yahoo Finance, 08 Jun

InnVest Buys Hotel Grand Pacific In Victoria For Over $150M

The Realist | Howard Chai, 02 Apr

7 Best Hotels to Book in SoHo, New York’s See-and-Be-Seen Neighborhood

Condé Nast Traveler, 06 Apr

Watch Items

Revenue growth is negative (-15.7%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑