At a Glance
Kamat Hotels (KHIL) pulled off a Q1 FY26 net profit of ₹4.23 Cr on revenue of ₹82.6 Cr – a YoY profit surge of 548% (yes, from a tiny base). But the market yawned, with the stock dipping 0.6%. With two luxury resorts in the pipeline (Panchgani, Nashik), the Orchid brand is back on expansion mode. Yet, investor confidence remains as shaky as a buffet plate at a wedding.
Introduction
Once drowning in debt and court cases, Kamat Hotels is now trying to reclaim its lost Orchid charm. The eco-hotel pioneer is growing, profits are finally visible, and debt is melting away faster than ice in a Goa shack. But is this a true turnaround or just a “staycation rally”? Let’s unpack.
Business Model (WTF Do They Even Do?)
KHIL operates hotels under the ‘Orchid’ Ecotel brand – India’s first 5-star eco-friendly hotel chain. It also manages boutique resorts, provides consultancy, and signs management contracts. Revenue is primarily from room rentals, F&B, and banquets. Its USP is sustainability – but its scale remains tiny compared to giants like Indian Hotels or EIH.
Financials Overview
Q1 FY26:
- Revenue: ₹82.65 Cr (-9% QoQ)
- Net Profit: ₹4.23 Cr (-61% QoQ)
- OPM: 22% (down from 27%)
FY25:
- Revenue: ₹357 Cr
- PAT: ₹47 Cr
- ROE: 18.5%
- ROCE: 19.5%
Commentary: Profitability is improving, but volatility is high – one weak quarter can flip the story.
Valuation
- P/E: 14.4 (cheaper than peers)
- P/B: 2.54
- ROE: 18.5%
Fair Value Estimate:
- P/E Method: FY26E EPS ~₹17; fair P/E 15–18 → ₹255–₹305
- P/B Method: Book ₹94.5; fair P/B 2.2–2.6 → ₹210–₹245
- DCF: Aggressive growth 12%, discount 13% → ₹230
Fair Value Range: ₹230–₹280 (Current ₹240 is mid-zone)
What’s Cooking – News, Triggers, Drama
- New Projects: Orchid Panchgani (Sept 2025), Orchid Nashik (Mar 2026).
- Legal Overhang: Disclosed ongoing disputes and provisions.
- Expansion Play: More management contracts likely.
- Stock Action: Consolidating around ₹240 – waiting for a trigger.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 589 |
| Liabilities | 311 |
| Net Worth | 278 |
| Borrowings | 204 |
Auditor Punchline: “Debt trimmed, but still lurking like that one unpaid bar tab.”
Cash Flow – Sab Number Game Hai
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Ops | 116 | 72 | 66 |
| Investing | -41 | 146 | 34 |
| Financing | -89 | -219 | -96 |
Takeaway: Operating cash is steady; financing outflows show debt servicing.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 18.5% |
| ROCE | 19.5% |
| P/E | 14.4 |
| PAT Margin | 6% |
| D/E | 0.7 |
Observation: Improving, but debt and margin pressures are still there.
P&L Breakdown – Show Me the Money
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 295 | 304 | 357 |
| EBITDA | 109 | 91 | 105 |
| PAT | 313* | 45 | 47 |
(*FY23 profit includes a one-off gain of ₹245 Cr)
Commentary: Core profits are much smaller once you remove exceptional items.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Indian Hotels | 8,825 | 1,716 | 61 |
| EIH | 2,743 | 768 | 31 |
| Lemon Tree | 1,286 | 197 | 60 |
| Kamat Hotels | 371 | 50 | 14 |
Roast: Dirt cheap vs peers – because scale matters.
Miscellaneous – Shareholding, Promoters
- Promoters: 57.8% (stable)
- FIIs: Tiny (0.01%)
- DIIs: 3.4%
- Public: 38.8%
- Buzz: No dividends – all cash retained for expansion.
EduInvesting Verdict™
Kamat Hotels is finally profitable after years of struggle. The Orchid brand still commands respect, and expansion into boutique resorts adds excitement. However, its scale is minuscule compared to peers, and margins are thin.
SWOT
- Strengths: Strong brand, improving financials, debt reduction.
- Weaknesses: Small size, profit volatility, no dividend.
- Opportunities: Eco-tourism growth, asset-light expansion.
- Threats: Competition from giants, legal liabilities.
Final Take: At ₹240, the stock is in “recovery mode” – not a multibagger yet, but could surprise if expansion clicks.
Written by EduInvesting Team | 31 July 2025SEO Tags: Kamat Hotels, Orchid, Hospitality Stocks
