Royal Orchid Hotels Sees Mixed Signals: -0.33% Weekly Dip Amid Technical Shifts

9 February: Downgrade to Strong Sell Amid Financial and Technical Weakness

Royal Orchid Hotels began the week on a cautious note, with MarketsMOJO downgrading the stock from 'Sell' to 'Strong Sell' on 6 February 2026. This downgrade was driven by deteriorating technical indicators and disappointing quarterly financial results. On 9 February, the stock closed at Rs.389.20, up 3.59% from the previous close, outperforming the Sensex’s 1.04% gain that day. Despite this intraday strength, the downgrade reflected concerns over a steep 265.45% decline in Profit Before Tax (PBT) to a loss of ₹3.16 crores and a 42.9% fall in Profit After Tax (PAT) to ₹4.28 crores for Q2 FY25-26.

Operating cash flow also hit a low of ₹24.69 crores, signalling cash generation challenges. The absence of domestic mutual fund holdings further underscored institutional caution. Technical indicators such as MACD and moving averages were bearish, confirming a weakening momentum despite the stock trading above its 52-week low of Rs.321.25.

10 February: Mixed Technical Signals Amid Price Momentum Shift

The following day, Royal Orchid Hotels displayed a notable intraday gain, closing at Rs.396.65, a 1.91% increase. This move was accompanied by mixed technical signals. Weekly indicators such as RSI turned bullish, suggesting short-term buying pressure, while MACD remained bearish, indicating persistent downward momentum. Bollinger Bands showed mild bearishness on the weekly chart but sideways movement monthly, reflecting consolidation.

Volume increased to 3,046, the highest for the week, yet On-Balance Volume (OBV) remained inconclusive. The stock’s price range between Rs.375.10 and Rs.393.80 highlighted heightened volatility. Despite the short-term strength, the stock remained well below its 52-week high of Rs.594.10. The Sensex gained a modest 0.25% that day, with Royal Orchid Hotels outperforming the benchmark.

11 February: Price Retreats Amid Lingering Bearish Momentum

On 11 February, the stock reversed course, closing at Rs.390.70, down 1.50% on low volume of 799 shares. This decline contrasted with the Sensex’s modest 0.13% gain, signalling relative weakness. The drop reflected the persistence of bearish technical indicators such as MACD and daily moving averages. The stock’s inability to sustain gains above Rs.396.65 suggested resistance at higher levels, while the broader market remained stable.

12 February: Upgrade to Sell Reflects Cautious Optimism

MarketsMOJO upgraded Royal Orchid Hotels from 'Strong Sell' to 'Sell' on 11 February 2026, reflecting a subtle improvement in technical outlook despite ongoing financial challenges. On 12 February, the stock closed at Rs.384.35, down 1.63%, underperforming the Sensex’s 0.56% decline. The upgrade was supported by a shift in technical indicators: weekly RSI turned bullish, and monthly KST showed a bullish signal, suggesting potential stabilisation.

However, profitability remained under pressure with PBT losses and subdued cash flow. The stock traded comfortably above its 52-week low but remained far from its 52-week high. The mixed technical signals indicated a tentative recovery phase, though caution prevailed among investors.

13 February: Week Ends on a Weak Note

The week concluded with Royal Orchid Hotels closing at Rs.374.45, down 2.58% on the day and 0.33% for the week. This decline outpaced the Sensex’s 1.40% drop on 13 February, signalling increased selling pressure. Volume rose to 1,369 shares, indicating renewed investor activity. The stock’s technical indicators remained mixed, with daily moving averages bearish and monthly trends showing mild bearishness. The price action confirmed the stock’s struggle to regain momentum amid broader market weakness.

Key Takeaways

Positive Signals: Despite short-term volatility, Royal Orchid Hotels demonstrated resilience by outperforming the Sensex marginally over the week. The upgrade from 'Strong Sell' to 'Sell' reflects improving technical momentum, particularly the bullish weekly RSI and monthly KST indicators. The company’s attractive valuation metrics, including a ROCE of 6.2% and a discounted Enterprise Value to Capital Employed ratio of 1.9, offer potential value for investors willing to navigate near-term challenges.

Cautionary Signals: The company’s financial performance remains under pressure, with a steep decline in quarterly PBT and PAT, and the lowest operating cash flow in recent years. The absence of domestic mutual fund holdings signals institutional scepticism. Technical indicators such as MACD and daily moving averages remain bearish, and the stock closed the week near its recent lows. Year-to-date and monthly returns lag the Sensex, highlighting ongoing headwinds.

Conclusion

Royal Orchid Hotels Ltd’s week was characterised by mixed signals and cautious market sentiment. The stock’s marginal weekly decline of 0.33% slightly outperformed the broader market’s 0.54% fall, reflecting some underlying resilience amid technical and financial challenges. The downgrade to 'Strong Sell' early in the week and subsequent upgrade to 'Sell' illustrate a nuanced shift in outlook, driven by improving technical indicators but persistent earnings weakness.

Investors should remain attentive to the evolving technical landscape and financial results, recognising that while valuation remains attractive, the stock faces significant near-term risks. The mixed technical signals and lack of institutional backing suggest that volatility may continue until clearer signs of recovery emerge.

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