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Check Before You Invest : UP Hotels Ltd

BSE: 509960 NSE: ISIN: INE726E01014
  |   Sector:  Travel & Hospitality   |   Industry:  Hotel, Resort & Restaurants

Snapshot

Q.1 Which industry/sub-sector does UP Hotels Ltd belong to?
UP Hotels Ltd belongs to the Travel & Hospitality sector, operating specifically within the Hotel, Resort & Restaurants segment.
Q.2 Is UP Hotels Ltd a good quality company?
UP Hotels Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is UP Hotels Ltd undervalued or overvalued?
UP Hotels Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 25.28 26.79
Price to Book 3.82 3.94
Price to Sales 4.75 4.72
EV to EBITDA 14.67 15.37
Q.4 Is UP Hotels Ltd a good buy now?
UP 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

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of UP Hotels Ltd?
UP Hotels Ltd revenue growth is 4.4% for FY-2025, which is below its 5-year CAGR of 9.41%, indicating slower growth.

Q.2 Gross Profit margin of UP Hotels Ltd?
UP Hotels Ltd Gross profit margin which is the profit after deduction of direct costs, is 31.6% for FY-2025, which is above its 5-year median of 30%, indicating increasing margins.

Q.3 Operating Profit Margin of UP Hotels Ltd?
UP Hotels Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 27.65% for FY-2025, which is in line with its 5-year median of 27.28% indicating stable margins.

Q.4 Net Profit Margin of UP Hotels Ltd?
UP Hotels Ltd Net Profit Margin is 19.45% for FY-2025, is above its 5-year median of 17.86%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 31.6 30
Operating Profit Margin (%) 27.65 27.28
Net Profit Margin (%) 19.45 17.86

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of UP Hotels Ltd?
UP Hotels Ltd Return on Asset is 15.1%, which is in line with its 5-year historical median of 15.1%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of UP Hotels Ltd?
UP Hotels Ltd Return on capital employed is 23.82% for FY-2025, which is in line with its 5-year historical median of 23.82%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of UP Hotels Ltd?
UP Hotels Ltd Return on equity is 17.85% for FY-2025, which is in line with its 5-year historical median of 17.85%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of UP Hotels Ltd?
UP Hotels Ltd Cash conversion cycle is 0 days, below its 5-year historical median of 0 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.78 0.78
ROE (%) 17.85 17.85
ROCE (%) 23.82 23.82
Cash Conversion Cycle - -

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of UP Hotels Ltd?
UP Hotels Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.06, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of UP Hotels Ltd?
UP Hotels Ltd Debt to cash flow from operations is 0.01, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of UP Hotels Ltd?

Q.1 Promoter shareholding and pledge status of UP Hotels Ltd?
Promoters hold 88.39% of the UP Hotels Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does UP Hotels Ltd performance compare with that of its Peers?

Q.1 Revenue growth of UP Hotels Ltd vs industry peers?
UP Hotels Ltd revenue CAGR is 9.41%, compared to the industry median CAGR of 3.58%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 4.4 3.6
Gross Profit Growth (%) -4 15.6
Operating Profit Growth (%) -6.7 13.5
Net Profit Growth (%) -6.3 18.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.78 0.27
ROE (%) 17.85 2.92
ROCE (%) 23.82 6.09
Cash Conversion Cycle (days) 0.48 -

Valuation & price assessment

Q.1 Stock return of UP Hotels Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 16.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
16.8% 36.5% 31.2% -13.3%
Q.2 Valuation ratios of UP Hotels Ltd vs historical?
The current P/E ratio of 25.28 is lower than its historical median of 26.79, indicating that the stock is trading below its historical average valuation.
Q.3 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 25.28 26.79 32.28
Price to Book 3.82 3.94 1.81
Price to Sales 4.75 4.72 5.80
EV to EBITDA 14.67 15.37 17.25

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