🔍 At a Glance
This is Clarks Group, folks – not just another hotel stock, but one of India’s first 5-star hotel chains operating in Agra, Lucknow, Jaipur, and Khajuraho. The biz is recovering post-COVID, margins are up, and profits are real. But… there’s no dividend, regulatory issues, and voluntary delisting rumors. So, is this a vintage wine… or stale minibar soda?
🧱 Business Model – WTF Do They Even Do?
Clarks runs luxury and business hotels across tourist hubs. Here’s what they do:
- 🛏️ Own and operate hotels (not just manage)
- 📍 Prime real estate assets in Agra, Lucknow, Jaipur, Khajuraho
- 🧾 Earn from: Room tariffs, banquets, F&B, conferencing, and events
Think of it as a family-run Taj-lite, but without Tata Sons, dividend policy, or a Patu Keswani giving TED Talks.
📊 Financials Snapshot (YoY Growth)
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | ₹33 | ₹72 | ₹131 | ₹147 | ₹153 |
| Net Profit (₹ Cr) | -₹8 | ₹7 | ₹23 | ₹32 | ₹30 |
| ROCE (%) | -11% | 9% | 29% | 31% | 24% |
| OPM (%) | -20% | 17% | 27% | 31% | 28% |
🧠 Key Insight: This is a legit turnaround from post-COVID near-death to healthy 24% ROCE and consistent ~30 Cr PAT. But…
💰 Valuation – Are We Paying for the Chandeliers?
| Metric | Value |
|---|---|
| CMP | ₹1,873 |
| EPS (TTM) | ₹55 |
| P/E | 34x |
| Book Value | ₹336 |
| P/B | 5.58x |
| Market Cap | ₹1,012 Cr |
🔎 Compared to EIH (Oberoi) or Indian Hotels (Taj), the P/E isn’t crazy. But given the zero dividend, low liquidity, and delisting hints, is this price justified?
🔥 What’s Cooking – News, Events & Drama
- ⚠️ Qualified audit in FY25 citing regulatory non-compliance
- 🏃♂️ Voluntary delisting move initiated from BSE
- ❌ Minimum public shareholding non-compliant
- 📈 Despite all this, profit continues to grow
This is the kind of stock where SEBI vs Promoters could be the most exciting thing on the earnings call.
🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Equity Capital | ₹5 Cr |
| Reserves | ₹176 Cr |
| Borrowings | Nil |
| Total Liabilities | ₹212 Cr |
| Fixed Assets | ₹71 Cr |
| Investments | ₹35 Cr |
| Other Assets | ₹105 Cr |
✅ Debt-free 💪
✅ Healthy reserves
✅ Net block growing steadily
Clarks is sitting on juicy old-money assets that would make REIT investors cry.
💸 Cash Flow – Clean Like Their Rooms?
| FY25 Cash Flow |
|---|
| From Ops: ₹36 Cr |
| Investing: -₹28 Cr (Capex-heavy) |
| Financing: Neutral |
| Net Cash: ₹9 Cr |
Consistent free cash flow since FY22. Not flashy, but stable – like a business hotel’s breakfast buffet.
🧮 Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 24% |
| ROE | 18% |
| Debtor Days | 15 |
| Inventory Days | 42 |
| CCC | -52 Days (good) |
| Working Capital Days | 77 (up from -18 last year) |
🚨 Rising working capital days is a yellow flag. Maybe they’re giving too much credit to tour groups?
💵 P&L Breakdown (FY25)
- Revenue: ₹153 Cr
- Operating Profit: ₹42 Cr
- Net Profit: ₹30 Cr
- Other Income: ₹6 Cr (not driving profits)
- EPS: ₹55.06
No “Other Income Magic” here. Profits are clean. But…
🥊 Peer Comparison
| Company | P/E | ROCE | ROE | Div Yield | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Indian Hotels (Taj) | 64x | 17% | 16% | 0.3% | 1.06L |
| EIH (Oberoi) | 30x | 23% | 18% | 0.4% | 23K |
| Chalet Hotels | 136x | 11% | 6% | 0% | 19K |
| U.P. Hotels | 34x | 24% | 18% | 0% | 1,012 |
Clarks is tiny but profitable. Problem? Low float + delisting clouds.
🗃️ Promoters & Shareholding
- 🧑💼 Promoters hold 88.38%
- 🪙 Public holds just 11.62%
- 🧯 Minimum Public Shareholding (MPS) violation flagged by SEBI
- 📉 Stock might delist – this affects liquidity and exit options
A classic delisting candidate if things don’t shape up.
🧠 EduInvesting Verdict™
“Clarks is not just a hotel – it’s a sleeper stock trying to wake up before SEBI checks out.”
Summary:
✅ Consistent profits
✅ Clean balance sheet
✅ High ROE, ROCE
🚫 No dividends
🚫 Regulatory issues
🚫 Delisting attempt
🚫 Low liquidity
Fair Value (Base Case)
Assuming normalized EPS of ₹50 and sectoral P/E of 25–30x:
- FV Range: ₹1,250 – ₹1,500 per share
- CMP = ₹1,873 → 15%–30% premium baked in for scarcity, but no clear margin of safety
🏷️ Tags:
U.P. Hotels, Clarks group share price, hotel sector India, BSE delisting stocks, low float stocks, profitable hotel stocks, zero debt small caps, EduInvesting hospitality picks
✍️ Written by Prashant | 📅 July 3, 2025
