Last Updated:
Advani Hotels and Resorts is a low-debt, high-ROCE hotel company that operates the Caravela Beach Resort in Goa. The company is giving around 45 percent ROCE and 3.4 percent dividend yield, which makes it different from other companies in the hotel sector. Radhakishan Damani has been holding stake in it since 2015 and still holds 4.2 percent stake, which shows the long-term quality of the company.
New Delhi. If you are looking at the stocks of hotel sector, then the name of Advani Hotels and Resorts must have come up a lot recently. The company’s business is not new. It has been running hotels since 1987 and its Caravela Beach Resort in Goa is a 5 star deluxe property. But the real buzz about the company is due to its numbers and its big investor Radhakishan Damani who has been in it for a long time. Damani has been holding it since 2015 and still holds about 4.2 percent stake.
But the real identity of this company comes from its strong numbers and the big investor Radhakishan Damani who has been in it for a long time. Damani has been invested in this company since 2015 and still holds about 4.2 percent stake. It is considered a sign of confidence in the market that a veteran investor has been in it for almost a decade.
no debt
The biggest feature of Advani Hotels is its almost zero debt model. This means that whatever the company earns goes directly to the business and investors instead of going into interest. This is the reason why the company has been continuously paying dividends and is currently giving a yield of around 3.4 percent. In a flat market, this in itself tells how strong the company is at its operational level.
Amazing return on capital
Return on Capital Employed is the company’s strongest data point. Advani Hotels is currently showing ROCE of around 45 percent while the industry median is only around 12 percent. If we understand in simple language, the company is earning profit of Rs 45 on every Rs 100 of capital. The average earning of other companies is around Rs 12. It is numbers like these that keep big investors like Damani attached to a company for years.
Sales cross Rs 100 crore
In the last five years, the company’s sales have increased from Rs 70 crore to Rs 107 crore and during this period about 9 percent CAGR has been recorded. In H1 FY26 the company has shown sales of Rs 35 crore. EBITDA increased from Rs 17 crore in FY20 to Rs 35 crore in FY25 and this works out to be about 16 percent CAGR. However, there has been a decline in EBITDA this year and it stood at only Rs 1.75 crore in H1 FY26. Similarly, the net profit increased from Rs 11 crore in FY20 to Rs 26 crore in FY25. It stood at Rs 1.4 crore in H1 FY26. This decline is believed to be the effect of the cyclicality of the Goa market.
100 percent in 5 years
Now talking about the price, where the share was at Rs 28 in December 2020, now it has reached Rs 58. That means the stock has doubled more than once in the last five years and has given more than 100 percent returns. At the current price of Rs 58, it is trading at about 37 percent discount from its high of Rs 92. Many investors are considering it an interesting stock from the value angle. According to valuation, the company is currently running at around 21x PE while the industry median is 37x. The company’s own 10-year median PE has also been around 27x. Whereas the industry median is 36x. In the last 12 months the company has paid a dividend of Rs 1.90 per share. Accordingly, the company continues to appear strong on both cash generation and investor return fronts.
(Disclaimer: The stocks mentioned here are only for informational purposes. If you want to invest money in any of these, then consult the date first. StuffUnknownwill not be responsible for any profit or loss of yours.)
