Royal Orchid Hotels Limited

Consumer Cyclical — Lodging · NSE

₹279.90+₹2.40 (+0.86%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Royal Orchid Hotels Limited, together with its subsidiaries, operates and manages hotels and resorts for business and leisure travelers in India and Tanzania.

IndustryLodging

SectorConsumer Cyclical

Employees8,600

Annual revenue₹384 Cr

How does it make money?

Turns over ₹384 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹29 left at the operating level before interest, tax and depreciation. Each of its 8,600 employees supports ₹4.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹4.5 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 8.6% 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 +46% while net margin moved -53% 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+46%

Margin effect-53%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 13.4% is steady
✗ Profit has declined at 11.9% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 41.4% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

56/ 100

Fair

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

27.7x

3Y Median

20.9x

40 monthly readings · mean 21.4x · range 15.7x–31.2x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 33% above its 3y median of 20.9x. 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 60% below the peer median of 69.2x.

vs. its own history

Expensive

20.9x median over 40 months · +33%

vs. sector peers

Cheap

69.2x median of 4 peers · -60%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 27.2% to 12.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 23.2% to 8.6% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 306% over 3 years, from ₹158 Cr to ₹641 Cr.
🔴High leverageFinancial
Debt/Equity of 2.33x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 2.0x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.6 points, from 37.2% to 28.6%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 4.6x to 2.0x.
🟡Profit is decliningFinancial
Net profit is down 32% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 60% 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?

Margins are being competed away
EBITDA margin has fallen from 37.2% to 28.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 33% 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 27.2% to 12.5%. 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 10% a year✓ 13.4% CAGR
Latest reported year was 36.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 27%✓ 28.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 5.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹52 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹768 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.97x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.09

Profitable

Profitable on a per-share basis

ROE

12.5%

Moderate

Moderate capital efficiency

ROCE

8.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.33x

High

High leverage

Revenue Growth (YoY)

36.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-41.4%

Falling

Profits are shrinking

Dividend Yield

0.89%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹52 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

49.7x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

20.0%

Good

Healthy core-business profitability

Net Margin

6.7%

Average

Average bottom-line conversion

Current Ratio

1.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

295.9 / 301.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

23.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹264 Cr	₹294 Cr	₹319 Cr	₹384 Cr	+13.4%
EBITDA	₹98 Cr	₹94 Cr	₹96 Cr	₹110 Cr	+3.9%
EBITDA Margin	37.2%	32.0%	30.2%	28.6%	—
PAT (Net Profit)	₹47 Cr	₹48 Cr	₹47 Cr	₹32 Cr	-11.9%
EPS	₹17.15	₹17.68	₹17.23	₹11.74	-11.9%
ROE	27.2%	25.4%	20.5%	12.5%	—
ROCE	23.2%	19.8%	17.3%	8.6%	—
Total Debt	₹158 Cr	₹200 Cr	₹221 Cr	₹641 Cr	+59.6%
Free Cash Flow	₹45 Cr	₹48 Cr	₹1 Cr	₹52 Cr	+5.2%

🟢 Revenue has grown at 13.4% a year over 3 years.

🟢 EBITDA has grown at 3.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 37.2% to 28.6% over 3 years (-8.6 pts).

🔴 PAT (Net Profit) has shrunk at 11.9% a year over 3 years.

🔴 EPS has shrunk at 11.9% a year over 3 years.

🔴 ROE has fallen from 27.2% to 12.5% over 3 years (-14.7 pts).

🔴 ROCE has fallen from 23.2% to 8.6% over 3 years (-14.5 pts).

🔴 Total Debt has grown at 59.6% a year over 3 years.

🟢 Free Cash Flow has grown at 5.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,042 Cr

Total Liabilities

₹766 Cr

Cash & Equivalents

₹14 Cr

Operating Cash Flow

₹82 Cr

Capex

-₹30 Cr

Shareholding (proxy)

Institutional Holding

4.4%

Insider Holding

69.0%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

28 Aug 2026

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

2 positive1 negative3 general

Compare ROYAL ORCHID HOTELS with

Equitymaster, 16 Oct

Royal Orchid Hotels (NSE:ROHLTD) Could Be A Buy For Its Upcoming Dividend

Simply Wall Street, 24 AugCapital return

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

Royal Orchid Hotels Q4 Revenue Jumps 30% to ₹113 Cr While Net Profit Drops 40%

Sahi, 25 MayResults

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

Royal Orchid Hotels Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Royal Orchid Hotels Soar Over 8%: Signs A Strategic Agreement with Hilton

Dalal Street Investment Journal, 08 Apr

Royal Orchid Hotels consolidated profit drops 39% in Q1FY26

scanx.trade, 11 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingProfitability · Risk

WeakBusiness Quality · Financial Health · Growth · 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. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑