1. At a Glance
India’s largest vacation ownership company (Club Mahindra) just posted Q1 FY26 results that felt like ordering a 5-star holiday and getting lukewarm room service. Revenue up, profits… meh. P/E is pushing 58.7, but dividends are still on vacation.
2. Introduction with Hook
Imagine pre-paying lakhs for a holiday, only to be told “sir, no availability.” Welcome to the world of Club Mahindra — the Netflix of holidays: pay now, binge later (if rooms are free).
Q1 FY26 snapshot:
- Revenue: ₹701 Cr
- PAT: ₹7.17 Cr (that’s 1% of revenue — a rounding error, basically)
All this with a P/E of 58.7 — because investors apparently love ROI-free resorts.
3. Business Model (WTF Do They Even Do?)
MHRIL is a timeshare business dressed in resort-wear and corporate jargon. Customers pay lakhs upfront + annual fees to “own” holiday weeks for 25 years.
They monetize 3 ways:
- Membership Fees (the ‘EMI’ trap)
- Annual Subscription Fees (the hidden tax)
- Resort Revenue (meals, spa, and crying toddlers)
Basically, it’s a hotel chain where customers lend you money for 25 years and still thank you.
4. Financials Overview
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) | OPM % |
|---|---|---|---|---|
| FY23 | 2,517 | 481 | 114 | 19% |
| FY24 | 2,705 | 522 | 116 | 19% |
| FY25 | 2,781 | 587 | 126 | 21% |
| Q1 FY26 | 701 | 122 | 7.17 | 17% |
Note:
- EBITDA growing slowly — like resort check-ins on a rainy Tuesday.
- Profit growth? More tepid than hotel buffet coffee.
- Revenue CAGR (5-yr): just 3%
5. Valuation
| Method | Assumption | FV Range |
|---|---|---|
| P/E | 30–35x on FY26E EPS ₹6.5 | ₹195–₹227 |
| P/BV | 2–2.5x on BV ₹38.6 | ₹77–₹96 |
Current Price: ₹367
So, yeah — this is priced like a luxury cruise. But it’s giving Kerala backwater vibes.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 net profit down 90% QoQ — because resort ops are seasonal. Or excuse-sional.
- New appointments: Secretarial auditor roped in — unlikely to fix occupancy rates.
- AGM wrapped up — shareholders still asking, “Dividend kab aayega?”
- Debt has increased to ₹3,130 Cr — they’re building resorts and possibly more boardrooms.
7. Balance Sheet
| Metric | FY24 | FY25 |
|---|---|---|
| Equity Capital | ₹202 Cr | ₹202 Cr |
| Reserves | ₹323 Cr | ₹579 Cr |
| Borrowings | ₹2,738 Cr | ₹3,130 Cr |
| Total Assets | ₹9,629 Cr | ₹10,423 Cr |
Key Insight:
The asset growth is funded by customer cash & borrowings.
The company builds resorts; customers build hopes.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹681 Cr | ₹-209 Cr | ₹-459 Cr | ₹14 Cr |
| FY24 | ₹624 Cr | ₹-448 Cr | ₹-190 Cr | ₹-13 Cr |
| FY25 | ₹621 Cr | ₹-402 Cr | ₹-285 Cr | ₹-66 Cr |
Translation:
- Operating cash flows are decent (thanks members),
- But investing & financing are heavy — and the net is leaking cash.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 19.4% |
| ROCE | 9.73% |
| PAT Margin | 4.5% |
| P/E | 58.7 |
| CMP/BV | 9.51x |
Hot take:
- ROE is high only because equity base is thin.
- CMP/BV > 9x? That’s not premium. That’s delusional.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹2,517 Cr | ₹481 Cr | ₹114 Cr |
| FY24 | ₹2,705 Cr | ₹522 Cr | ₹116 Cr |
| FY25 | ₹2,781 Cr | ₹587 Cr | ₹126 Cr |
| Q1 FY26 | ₹701 Cr | ₹122 Cr | ₹7.17 Cr |
Commentary:
- PAT margins are like resort towels — thin, inconsistent, and often missing.
11. Peer Comparison
| Company | CMP | P/E | Revenue (TTM Cr) | PAT (Cr) | ROE % |
|---|---|---|---|---|---|
| Indian Hotels | ₹754 | 62.6 | 8,825 | 1,716 | 16.1% |
| Lemon Tree | ₹157 | 63.2 | 1,286 | 197 | 18.5% |
| Chalet Hotels | ₹934 | 144.4 | 1,718 | 141 | 5.8% |
| MHRIL | ₹367 | 58.7 | 2,829 | 127 | 19.4% |
Punchline:
MHRIL is priced like a 5-star resort but operating like a 3-star with great lobby photos.
12. Miscellaneous – Shareholding, Promoters
| Category | % Holding |
|---|---|
| Promoters | 66.74% |
| FIIs | 5.42% |
| DIIs | 10.17% |
| Public | 17.45% |
Observations:
- Promoters steady.
- Public still holding hope like a Club Mahindra member waiting for room availability.
13. EduInvesting Verdict™
Mahindra Holidays is a capital-intensive, slow-growth vacation story wrapped in fancy marketing and even fancier P/E ratios. Cash flows are stable, balance sheet is bloated, and members… well, they’re patient.
If you’re looking for excitement, try skydiving. If you want predictable, slow-mo earnings with resort photos — here’s your pick.
A scenic pit stop — but don’t expect the express train of compounding.
Metadata:
Written by EduInvesting Team | 23 July 2025
Tags: Mahindra Holidays, Club Mahindra, Timeshare, Q1 FY26, Resort Stocks, EduInvesting Premium
