CHL Ltd is Rated Strong Sell

Current Rating Overview

MarketsMOJO’s Strong Sell rating for CHL Ltd indicates a cautious stance for investors, signalling significant concerns across multiple dimensions of the company’s profile. This rating was assigned on 06 Nov 2025, reflecting a marked deterioration from the previous Sell grade. The Mojo Score plummeted from 33 to 3, underscoring a sharp decline in the company’s overall health and outlook.

Here’s How CHL Ltd Looks Today

As of 28 January 2026, CHL Ltd remains a microcap player in the Hotels & Resorts sector, grappling with several fundamental and technical challenges. The company’s stock performance over the past year has been disappointing, with a negative return of -4.75%, underperforming the broader market benchmark BSE500, which delivered a 9.16% gain over the same period.

Quality Assessment

The quality grade assigned to CHL Ltd is below average, reflecting weak long-term fundamentals. The company’s net sales have grown at an annualised rate of 25.08% over the last five years, which might appear encouraging at first glance. However, operating profit growth has stagnated at 0%, signalling operational inefficiencies and challenges in converting revenue growth into profitability. Additionally, the company reported negative book value, which is a critical red flag indicating that liabilities exceed assets, undermining the firm’s financial stability.

Valuation Considerations

CHL Ltd’s valuation is currently classified as risky. The stock trades at levels that are unfavourable compared to its historical averages, reflecting investor scepticism about its future prospects. The negative book value further exacerbates valuation concerns, as it implies that the company’s net worth is in deficit. This valuation risk is compounded by the company’s recent financial results, which have shown significant deterioration.

Financial Trend Analysis

The financial trend for CHL Ltd is negative. The latest quarterly results for September 2025 reveal a sharp decline in profitability metrics. Profit Before Tax Less Other Income (PBT LESS OI) stood at a loss of ₹17.21 crores, a staggering fall of -836.6% compared to the previous four-quarter average. Similarly, Profit After Tax (PAT) plunged to a loss of ₹12.04 crores, down by -2590.5%. Return on Capital Employed (ROCE) for the half-year period is at a low 10.96%, indicating poor capital efficiency. The company’s debt profile is also concerning, with a high debt load and an average Debt to Equity ratio of 0 times, suggesting leveraged operations without adequate equity cushion.

Technical Outlook

From a technical perspective, CHL Ltd is rated bearish. The stock has experienced negative momentum over the medium term, with a 3-month return of -12.16% and a 1-month decline of -2.06%. Although there was a modest 1-day gain of 0.36% and a 1-week rise of 4.03%, these short-term fluctuations do not offset the prevailing downtrend. The technical grade reflects weak price action and investor sentiment, signalling caution for traders and long-term holders alike.

Implications for Investors

The Strong Sell rating suggests that investors should exercise prudence when considering CHL Ltd. The combination of below-average quality, risky valuation, negative financial trends, and bearish technical signals points to significant downside risks. Investors seeking capital preservation or growth may find more attractive opportunities elsewhere in the Hotels & Resorts sector or broader market. The current rating serves as a warning that the stock is likely to face continued headwinds in the near term.

Summary of Key Metrics as of 28 January 2026

• 1-day return: +0.36%
• 1-week return: +4.03%
• 1-month return: -2.06%
• 3-month return: -12.16%
• 6-month return: -1.83%
• Year-to-date return: -4.53%
• 1-year return: -4.75%
• Net sales growth (5 years annualised): 25.08%
• Operating profit growth (5 years): 0%
• PBT LESS OI (Sep 2025 quarter): -₹17.21 crores
• PAT (Sep 2025 quarter): -₹12.04 crores
• ROCE (Half Year): 10.96%
• Debt to Equity (average): 0 times
• Mojo Score: 3.0 (Strong Sell)

Contextualising CHL Ltd’s Position in the Sector

Within the Hotels & Resorts sector, CHL Ltd’s performance and financial health stand out negatively. The sector has generally seen mixed recovery trends post-pandemic, with many companies benefiting from increased travel demand and improved occupancy rates. However, CHL Ltd’s inability to translate sales growth into operating profits and its deteriorating financial metrics place it at a disadvantage relative to peers. The negative book value and high debt levels further isolate it from sector leaders who have strengthened their balance sheets and improved profitability.

Investor Takeaway

For investors, the Strong Sell rating is a clear signal to reassess exposure to CHL Ltd. The current fundamentals suggest that the company faces structural challenges that may take considerable time to resolve. The combination of weak quality, risky valuation, negative financial trends, and bearish technicals implies that the stock is vulnerable to further declines. Investors prioritising capital preservation should consider reducing or avoiding positions in CHL Ltd until there is clear evidence of operational turnaround and financial stabilisation.

Conclusion

In summary, CHL Ltd’s Strong Sell rating by MarketsMOJO, effective from 06 Nov 2025, reflects a comprehensive evaluation of the company’s deteriorating fundamentals and market performance. As of 28 January 2026, the stock continues to underperform with significant risks evident across quality, valuation, financial trends, and technical indicators. This rating serves as a cautionary guide for investors navigating the Hotels & Resorts sector, emphasising the importance of rigorous analysis and risk management in portfolio decisions.

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