1. At a Glance – Hill Stations, Heritage & a Suddenly Hyperactive P&L
Sinclairs Hotels Ltd is that quiet Bengali uncle of the hotel industry who doesn’t talk much, doesn’t advertise much, but somehow owns half the hill stations you went to on school trips. Market cap sits at ₹408 crore, current price around ₹79.5, and the stock has been in a mild Himalayan avalanche mode with –15.8% return in 3 months and –27.8% over one year. Yet, Q3 FY26 decided to throw a tantrum: ₹17.8 crore quarterly revenue (+23.4% YoY) and ₹5.77 crore PAT (+415% YoY). Yes, four-one-five. Even Sinclairs looked surprised.
Operating margins remain hotel-industry spicy at 31%+, ROCE at 15.3%, ROE at 12.4%, and debt-to-equity a very manageable 0.30. Dividend yield of ~1% keeps the “steady income” crowd mildly interested. The valuation, though, is where things get dramatic: P/E ~45, well above the sector median of ~33, even while the company mostly runs mid-sized leisure hotels in tourist destinations, not luxury palaces with butlers named Sebastian.
So the question is obvious: is this a sleepy compounder temporarily flexing its muscles, or is the market already pricing in Rajasthan sunsets and Himachal snowfalls before the rooms are even made? Let’s dig in.
2. Introduction – From Darjeeling Tea to Dal Bati Dreams
Sinclairs Hotels is not a startup, not a PE darling, and definitely not a flashy hospitality brand. Incorporated decades ago, it has quietly built a portfolio of 4-star leisure hotels across West Bengal, Sikkim, Tamil Nadu, and Andamans. Think Darjeeling mist, Dooars forests, Ooty chill, Port Blair sunsets. It’s a “destination-first” hotel chain, not a business travel monster like Indian Hotels.
What makes Sinclairs interesting is not scale, but asset ownership. Most properties are owned, not asset-light leased experiments. That means stable cash flows, fat depreciation, and occasional real estate value unlocking teasers that never quite happen (looking at you, Rajarhat land in Kolkata).
FY23 and FY24 were strong post-COVID recovery years for hotels, and Sinclairs rode that wave nicely. FY25 cooled a bit, profits dipped YoY, and suddenly everyone remembered that hotels are cyclical, seasonal, and moody like hill-station weather.
Then Q3 FY26 arrived with a revenge rally in profits, helped by strong occupancy, operating leverage, and decent other income.
Add to this a 1:1 bonus issue in Jan 2024, multiple buybacks over the last decade, and a recent NSE listing in April 2024, and suddenly this once-forgotten stock is showing up on retail radars.
But is it a long-term hospitality compounder or just a well-run regional hotel chain enjoying a good tourist season? Keep reading.
3. Business Model – WTF Do They Even Do?
At its core, Sinclairs Hotels does one thing: own and operate mid-sized leisure hotels in tourist-heavy locations.
No casinos.
No cruise ships.
No airline loyalty tie-ups.
Just hotels. Rooms, restaurants, banquets, conferences, and the occasional corporate offsite where people pretend to brainstorm but mostly eat pakoras.
Current Portfolio
As of Q3 FY24, Sinclairs has 447 rooms across 9 locations, including:
- Darjeeling
- Dooars
- Kalimpong
- Siliguri
- Gangtok
- Ooty
- Port Blair
- Burdwan
- Yangang
Seven out of nine properties won TripAdvisor Travellers’ Choice Awards 2022, meaning guests complain less than average. In hospitality, that itself is a moat.
Clientele
Corporate bookings from ITC, Nestle, Unilever, Sun Pharma, ICICI Bank, LIC, IndianOil, etc., help smoothen seasonality. Leisure tourists bring margins, corporates bring weekday occupancy. Decent balance.
Expansion Strategy
Instead of going asset-heavy everywhere, Sinclairs is now leasing properties in Rajasthan and Himachal Pradesh, planning regional clusters over FY25–26. Translation: lower upfront capex, faster scalability, and less balance
