Oriental Hotels Receives 'Hold' Rating from MarketsMOJO, Despite Positive Technical Trend and Strong Shareholder Returns

Oriental Hotels, a smallcap company in the hotel, resort, and restaurant industry, has recently received a 'Hold' rating from MarketsMOJO on October 28, 2024. This upgrade is based on the company's technical trend, which has improved from Mildly Bullish to Bullish, as well as its MACD and KST technical factors, which are also showing a Bullish trend.
The majority shareholders of Oriental Hotels are its promoters, and the company has consistently generated positive returns over the last three years. In the past year alone, the stock has outperformed the BSE 500 index. However, the company's management efficiency is poor, with a low ROCE of 5.49%, indicating low profitability per unit of total capital. Additionally, the company's ability to service its debt is weak, with a poor EBIT to Interest ratio of 1.59.

Furthermore, Oriental Hotels has shown poor long-term growth, with a net sales growth rate of only 4.37% over the last five years. Its ROE is also low at 4.20%, indicating low profitability per unit of shareholders' funds. In the latest financial results for September 2024, the company's profits have fallen by -62.93%, with a ROCE of 8.67% and cash and cash equivalents at a low of Rs 9.40 crore.

Despite its expensive valuation with a 3.7 Enterprise value to Capital Employed and a discount compared to its average historical valuations, Oriental Hotels has generated a return of 70.95% in the past year. However, its profits have declined by -12%. Based on these factors, MarketsMOJO has upgraded the stock to a 'Hold' rating. Investors should carefully consider these factors before making any investment decisions.