📌 At a Glance
EIH Associated Hotels Ltd runs luxury hotels under the iconic Oberoi and Trident brands. Despite being a tiny cousin of Indian Hotels and Chalet, it’s posted 19% ROE, 31% OPM, and a juicy 5Y profit CAGR of 19% – all while being almost debt-free. With a ₹156 Cr renovation cooking at Trident Jaipur, is this the smallcap that deserves a 5-star rating?
1️⃣ Intro: The Hotel You Never Knew You Knew
If EIH Associated Hotels were a Bollywood actor, it would be Pankaj Tripathi — doesn’t hog the limelight like Taj or ITC, but delivers solid performances quietly in the background.
- Operates 9 luxury hotels under Oberoi and Trident brands.
- Part of the Oberoi-Raheja JV — classy lineage, tight operations.
- Market cap? Just ₹2,300 Cr. For comparison, Indian Hotels is ₹1.1 lakh Cr.
And yet…
Despite being the underdog, it’s pulled off:
✅ 5Y profit CAGR of 18.6%
✅ OPM up to 31% in FY25
✅ EPS growth: ₹2.11 → ₹15.07 in 3 years 😳
2️⃣ WTF Do They Even Do? (Business Model)
Luxury hospitality, minus the balance sheet drama.
- Properties: EIH Assoc. owns Oberoi/Trident hotels in key cities like Jaipur, Udaipur, Agra, Bhubaneswar, and Coimbatore.
- Branding & Ops: Operations are handled by EIH Ltd (The Oberoi Group); EIHAHOTELS focuses on owning/maintaining the properties.
- Revenue Model:
- Room tariffs
- F&B
- Banquets/events
- Management fees from group entities
No retail gimmicks, no budget segment – just posh, polished, premium.
3️⃣ Financials: Profits with a Side of Class 🍷
🧾 P&L Snapshot (₹ Cr)
| Year | Revenue | Net Profit | EPS (₹) | OPM (%) | ROE (%) |
|---|---|---|---|---|---|
| FY21 | ₹101 | -₹27 | -4.39 | -17% | -9% |
| FY22 | ₹195 | ₹13 | 2.11 | 17% | 6% |
| FY23 | ₹337 | ₹65 | 10.61 | 28% | 23% |
| FY24 | ₹385 | ₹81 | 13.31 | 29% | 25% |
| FY25 | ₹408 | ₹92 | 15.07 | 31% | 25% |
🧠 Takeaways:
- COVID crash? Brutal. FY21 was a bloodbath.
- But FY22–FY25 = a profit recovery arc worthy of a sequel.
- EPS 7x in 3 years. Revenge of the Smallcap Hotel.
4️⃣ Valuation: Is It Cheap, Meh, or Crack?
Let’s benchmark it.
| Company | M-Cap | P/E | ROE | OPM | Dividend Yield |
|---|---|---|---|---|---|
| Indian Hotels | ₹1.11L Cr | 67x | 16% | 33% | 0.29% |
| Chalet Hotels | ₹20K Cr | 141x | 5.8% | 42% | 0% |
| EIH Ltd | ₹22K Cr | 30x | 17.8% | 37% | 0.41% |
| EIH Assoc. | ₹2,308 Cr | 24x | 19% | 31% | 1.6% |
🧾 Fair Value Range Calculation (EduStyle):
Let’s use two sanity models:
📊 1. P/E Multiple Method
- EPS FY25: ₹15.07
- Reasonable P/E: 22–28 (smallcap, but high margin + clean brand)
- FV Range = ₹331 – ₹422
🧮 2. EV/EBITDA Model
- EBITDA FY25 ~ ₹126 Cr
- EV/EBITDA fair range: 10–12x
- Implied EV: ₹1,260–₹1,512 Cr
- Less debt, add cash → Equity value = ~₹1,300–₹1,600 Cr
- Per Share Value = ₹355 – ₹437
🎯 Final EduInvesting FV Range: ₹350 – ₹430
CMP ₹378 → You’re not buying in a fire sale, but it’s not overpriced either.
5️⃣ What’s Cooking? News, Triggers & Drama
- 🛠 Trident Jaipur shutdown (Jul 2025):
Hotel will close for ₹156 Cr renovation → reopening Jan 2027.
🚧 Pain in near-term occupancy, but long-term value unlock. - 🎤 Concalls (May ’25):
- Confident in FY26 bookings.
- Exploring green initiatives and cost savings.
- 🪙 Dividends:
- ₹3.5 per share in FY25 = 1.6% yield
- Payout ratio steady at ~23%
6️⃣ Balance Sheet: How Much Debt, How Many Dreams?
📉 Debt = ₹4 Cr. That’s it.
💰 Reserves = ₹476 Cr
📐 Book Value = ₹88/share → CMP is ~4.3x BV
🏨 Capex = Self-funded (not debt-fueled, unlike some peers)
🏗 Investment book = ₹200 Cr (likely into MF, liquid funds or related group ventures)
7️⃣ Cash Flow: Sab Number Game Hai
🧾 FY25 Cash Flow Summary:
- 🟢 Operating Cash Flow = ₹109 Cr
- 🔴 Investing Cash Flow = -₹89 Cr (expansion + renovation)
- 🔴 Financing = -₹19 Cr (dividends + buyback)
💡 Net cash? Neutral. Clean. Not burning. Not hoarding.
8️⃣ Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 25.4% |
| ROE | 19% |
| P/E | 24.3x |
| Dividend Yield | 1.59% |
| OPM | 31% |
| Working Capital Days | 162 (🚨 used to be 40 – spike needs watching) |
| Promoter Holding | 75% |
| FII Holding | 13.7% |
| Public Float | Barely 11% (tight float = low liquidity) |
⚠️ Red Flag: Working capital days up 4x – needs monitoring. Could be due to renovation advance payments or longer receivables.
9️⃣ P&L Deep Dive: Show Me the Money
- FY25 Profit Before Tax: ₹123 Cr
- Tax: ₹31 Cr (26%)
- Net Profit: ₹92 Cr
- EPS: ₹15.07
- Profit Margin: 22.5%
No funky “Other Income” padding. All profit, no jugaad.
🔟 Misc – Shareholding, Promoters, KMP
- Promoters (Oberoi + Raheja) hold 75%
- FII Holding has stayed constant at ~13.7%
- Retail Shareholders: ~24,000
- Key Managerial Personnel:
- Vikram Oberoi – Group CEO of EIH Ltd (handles ops)
- Nakul Anand – Independent Director (also ex-ITC Hotels head)
🧠 EduInvesting Verdict™
✅ Classy brand, stable balance sheet
✅ Strong profitability, clean operations
✅ Undervalued vs Taj/Chalet (based on margin and returns)
✅ Renovation = short-term pain, long-term gain
🚫 Not a momentum rocket
🚫 Low liquidity, smallcap risks
🚫 Watch that working capital spike
🎯 FV Range: ₹350 – ₹430
CMP ₹378 → Slightly on the upper half, but deserves a spot on the watchlist for patient investors or hotel bulls.
✍️ Written by Prashant | 📅 26 June 2025
Tags: EIH Associated Hotels, Oberoi Hotels, Smallcap Hotels, Trident Jaipur Renovation, Hospitality Stocks, Indian Hotels Comparison, EduInvesting, Hotel Stock Analysis, Luxury Hotel Business India
