Current Rating Overview
On 07 January 2026, Indian Hotels Co Ltd’s rating was revised to Sell from a previous Hold status, accompanied by a significant drop in its Mojo Score from 51 to 35. This score reflects a comprehensive assessment of the company’s overall investment appeal, factoring in quality, valuation, financial trends, and technical indicators. The current Sell rating suggests that the stock is expected to underperform relative to the broader market and peers, signalling caution for investors considering exposure to this large-cap player in the Hotels & Resorts sector.
Here’s How the Stock Looks Today
As of 19 January 2026, Indian Hotels Co Ltd’s financial and market data paint a challenging picture. The stock has experienced a steady decline over multiple time frames, with a one-year return of -16.37%, significantly underperforming the BSE500 benchmark, which has delivered a positive 7.54% return over the same period. The year-to-date performance also remains negative at -7.87%, reflecting ongoing headwinds in the sector and company-specific challenges.
Quality Assessment
The company’s quality grade is assessed as average. This evaluation considers profitability, operational efficiency, and earnings consistency. Despite a respectable return on equity (ROE) of 14.6%, recent quarterly results indicate softness in core earnings. The Profit Before Tax (PBT) less other income for the latest quarter stood at ₹369.35 crores, down 30.9% compared to the previous four-quarter average. Similarly, Profit After Tax (PAT) declined by 33.1% to ₹284.92 crores, while net sales fell by 7.5% to ₹2,040.89 crores. These figures suggest that the company is facing pressure on its earnings quality and growth momentum.
Valuation Considerations
Valuation remains a key concern, with the stock graded as very expensive. Indian Hotels Co Ltd currently trades at a price-to-book (P/B) ratio of 8.4, which is notably high relative to its historical averages and peer group valuations. This elevated valuation is difficult to justify given the flat financial trend and recent earnings declines. The company’s price-to-earnings growth (PEG) ratio stands at 3.1, indicating that the market is pricing in growth expectations that may be overly optimistic given the current financial performance. Investors should be cautious about the premium valuation in light of the company’s recent operational challenges.
Financial Trend Analysis
The financial grade is assessed as flat, reflecting a lack of significant improvement or deterioration in key financial metrics. While profits have risen by 18.9% over the past year, this growth has not translated into positive stock returns, highlighting a disconnect between earnings and market sentiment. The flat trend is further underscored by the company’s recent quarterly results, which show declines in sales and profitability. This stagnation in financial performance contributes to the cautious stance reflected in the current rating.
Technical Outlook
From a technical perspective, the stock is rated as mildly bearish. The price has declined by 0.52% on the latest trading day and has shown negative momentum over weekly (-1.38%), monthly (-6.92%), and quarterly (-7.46%) periods. The six-month and year-to-date returns also remain in negative territory, reinforcing the bearish technical sentiment. This trend suggests that the stock may continue to face selling pressure in the near term, which aligns with the overall Sell recommendation.
Implications for Investors
The Sell rating on Indian Hotels Co Ltd indicates that investors should exercise caution and consider reducing exposure to this stock. The combination of average quality, very expensive valuation, flat financial trends, and bearish technical signals suggests limited upside potential and heightened risk. For investors seeking growth or value in the Hotels & Resorts sector, alternative opportunities with stronger fundamentals and more attractive valuations may be preferable.
Sector and Market Context
Indian Hotels Co Ltd operates in the Hotels & Resorts sector, which has faced volatility due to fluctuating travel demand and economic uncertainties. While the broader market, represented by the BSE500, has delivered positive returns over the past year, Indian Hotels has underperformed significantly. This divergence highlights company-specific challenges that have weighed on investor confidence. The stock’s large-cap status means it is closely watched by institutional investors, and its current rating reflects a cautious stance amid sector headwinds.
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Summary
Indian Hotels Co Ltd’s current Sell rating by MarketsMOJO, updated on 07 January 2026, reflects a comprehensive evaluation of its present-day fundamentals and market position as of 19 January 2026. The stock’s average quality, very expensive valuation, flat financial trend, and mildly bearish technical outlook collectively justify the cautious recommendation. Investors should carefully weigh these factors when considering their portfolio allocations, especially given the stock’s underperformance relative to the broader market and sector peers.
Looking Ahead
For investors monitoring Indian Hotels Co Ltd, it will be important to watch for signs of operational recovery, valuation realignment, and improved technical momentum before reconsidering a more positive stance. Until then, the current rating advises prudence and suggests that the stock may continue to face challenges in delivering satisfactory returns.
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