1. At a Glance – Small Hotel, Big Mood Swings
Howard Hotels Ltd (HHL) is that classic microcap hotel stock which behaves like a budget traveller with luxury dreams. Market cap sits at a tiny ₹22.4 Cr, stock price at ₹24.6, down 6% in a day, reminding everyone that volatility is free with every microcap booking.
Latest Q3 FY26 (Dec 2025) numbers look spicy on the surface: ₹5.35 Cr revenue and ₹1.17 Cr PAT, translating into a quarterly EPS of ₹1.28. Annualise that (Q3 rule → average of Q1, Q2, Q3 EPS × 4) and suddenly valuation conversations start happening at chai tapris.
But zoom out and reality checks in: ROCE 6.09%, ROE 3.55%, P/E 52x, and debt still chilling at ₹4.21 Cr. This is not Taj Hotels; this is Taj Gali No. 3, Agra – respectable, nostalgic, but capacity constrained.
Question is simple: Is this a cyclical hospitality comeback story… or just one good wedding season quarter?
2. Introduction – Welcome to the World of One-Property Drama
Howard Hotels Ltd was incorporated in 1989, which means it has survived liberalisation, dotcom bubble, GFC, COVID, and still hasn’t figured out double-digit ROCE. Respect for survival, mild concern for ambition.
The company operates in hospitality – hotels, palaces, resorts – but let’s be honest, Howard Plaza – The Fern, Agra is the main character here. Everything else is side roles, background dancers, or cameo appearances.
Hospitality is cyclical. When tourism is up, profits show
up dressed like a baraati. When demand slows, margins vanish faster than free breakfast coupons. Howard Hotels lives this cycle every quarter, and the financials read like an ECG machine.
So yes, Q3 FY26 is profitable. But the long-term investor question remains: Is this structural improvement or just seasonal luck with a dash of lower depreciation impact?
3. Business Model – WTF Do They Even Do?
Howard Hotels makes money in the most traditional hotel ways possible:
a) Rooms, Food & Banquets (≈98% of operating revenue)
Rooms contribute ~63%, F&B ~35%. Basically: tourists sleep, weddings eat, conferences pretend to work. No rocket science, no asset-light wizardry.
b) Space & Shop Rentals
Two in-house shops – Howard Plaza D’craft and Exquisite – selling local art and handicrafts. Think Taj Mahal souvenir economics, minus Taj Mahal footfall.
c) Allied Services
Laundry, communication, gym usage, and other hotel side hustles. Pocket money category, but every rupee matters at this scale.
This is a single-location-heavy, asset-heavy, demand-sensitive model.
