Check Before You Invest : HBG Hotels Ltd

Snapshot

Q.1 Which industry/sub-sector does HBG Hotels Ltd belong to?

HBG Hotels Ltd belongs to the Travel & Hospitality sector, operating specifically within the Hotel, Resort & Restaurants segment.

Q.2 Is HBG Hotels Ltd a good quality company?

HBG Hotels Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is HBG Hotels Ltd undervalued or overvalued?

HBG Hotels Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is HBG Hotels Ltd a good buy now?

HBG Hotels Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of HBG Hotels Ltd?

HBG Hotels Ltd revenue growth is 4.1% for FY-2025, which is below its 5-year CAGR of 7.39%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of HBG Hotels Ltd?

HBG Hotels Ltd Return on capital employed is 19.7% for FY-2025, which is above its 5-year historical median of 6.74%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.3 Return on Asset of HBG Hotels Ltd?

HBG Hotels Ltd Return on Asset is 18.1%, which is above its 5-year historical median of 1.47%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of HBG Hotels Ltd?

HBG Hotels Ltd Return on equity is 20.18% for FY-2025, which is above its 5-year historical median of 4.16%, indicating the business is making better use of its shareholders capital.

Q.5 Cash conversion cycle of HBG Hotels Ltd?

HBG Hotels Ltd Cash conversion cycle is -22 days, above its 5-year historical median of -40 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.09	0.22
ROE	20.18	4.16
ROCE	19.7	6.74
Cash Conversion Cycle	-22 days	-40 days

Q.6 Gross Profit margin of HBG Hotels Ltd?

HBG Hotels Ltd Gross profit margin which is the profit after deduction of direct costs, is 30.3% for FY-2025, which is above its 5-year median of 16.2%, indicating increasing margins.

Q.7 Operating Profit Margin of HBG Hotels Ltd?

HBG Hotels Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.52% for FY-2025, which is below its 5-year median of 14.58% indicating decreasing margins.

Q.8 Net Profit Margin of HBG Hotels Ltd?

HBG Hotels Ltd Net Profit Margin is 196.06% for FY-2025, is above with its 5-year median of 2.63%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	30.3	16.2
Operating Profit Margin	13.52	14.58
Net Profit Margin	196.06	2.63

Q.9 Debt to Equity ratio of HBG Hotels Ltd?

HBG Hotels Ltd Debt-to-Equity ratio is 0.04, which is lower with the industry average of 0.21, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of HBG Hotels Ltd?

HBG Hotels Ltd Debt to cash flow from operations is -0.27, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of HBG Hotels Ltd?

Promoters hold 69.80% of the HBG Hotels Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of HBG Hotels Ltd vs industry peers?

HBG Hotels Ltd revenue CAGR is 7.39%, compared to the industry median CAGR of 7.44%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	4.1	7.4
Gross Profit Growth	125	14.7
Operating Profit Growth	-	14.7
Net Profit Growth	-71.4	18.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.09	0.32
ROE	20.18	4.28
ROCE	19.7	6.32
Cash Conversion Cycle (days)	-22.47	-1

Valuation & price assessment

Q.1 Stock return of HBG Hotels Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 24.6% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	24.6%	52.1%	15.9%	-56.4%

Q.3 Valuation ratios of HBG Hotels Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	3.61	28.65	32.23
Price to Book	0.52	2.37	1.82
Price to Sales	6.93	3.98	5.80
EV to EBITDA	33.08	25.03	17.27

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