Shares of Royal Orchid Hotels Limited (ROHLTD) closed at ₹364.55, down 2.73% on the National Stock Exchange as of February 16, 2026, with early trading on February 17 showing prices around ₹370. The stock has traded in a 52-week range of ₹324.25 to ₹594.00. Despite recent volatility, the equity has experienced downward pressure over the last six months amid sector-wide challenges including rising operational costs and accounting impacts.
Company Description
Royal Orchid Hotels Limited operates and manages a chain of business and leisure hotels across India, primarily under the “Royal Orchid” and “Regenta” brands, with newer upscale offerings like Iconiqa. The company employs an asset-light business model, focusing on managed properties and long-term leases to minimize capital expenditure. Its end markets include corporate travel, domestic leisure tourism, and the “Weddings and MICE” segments across tier-1 and tier-2 Indian cities.
Current Stock Price
Approximately ₹370 (as of February 17, 2026 early trading)
Market Capitalization
Approximately ₹1,014 crore
Valuation
The stock trades at a trailing price-to-earnings (P/E) multiple of approximately 27x. This remains below broader hospitality industry averages, reflecting the company’s smaller scale, recent margin dynamics, and impacts from lease accounting standards compared to larger peers.
Third Quarter and Nine-Month Financial Summary
Royal Orchid reported robust revenue growth for the third quarter ended December 31, 2025, driven by new property additions, improved average room rates, and contributions from managed hotels.
- Revenue Growth: Consolidated total income for Q3 FY26 rose 24.3% year-over-year to ₹117.93 crore. Income from operations grew 26.6% to ₹113.03 crore.
- Operating Margins: Consolidated EBITDA stood at ₹34.84 crore, up 13.8% from the prior year, though margins moderated slightly amid higher expenses.
- Net Profit: Consolidated profit after tax (PAT) was ₹9.62 crore, down from higher levels in the prior year period. Management attributed the decline primarily to notional increases in depreciation and finance costs from Ind-AS lease accounting, which reduced PAT by approximately ₹6.42 crore in the quarter.
- Nine-Month Performance: Consolidated total income reached ₹287.50 crore, up from ₹250.84 crore in the previous year. Net profit for the nine-month period stood at ₹25.11 crore.
Earnings Call Themes and Strategic Outlook
Management emphasized operational execution, rapid property onboarding, and long-term growth ambitions during the post-earnings update:
- Iconiqa Mumbai Performance: The upscale lifestyle hotel contributed ₹17.4 crore in revenue for the quarter, achieving strong market positioning quickly and serving as a model for efficient development.
- Vision 2030: The company targets expansion to 345 hotels and over 22,000 keys by 2030, from the current base of 121 operating and upcoming properties with a pipeline of 47+ hotels.
- Average Room Rate (ARR): Managed hotels recorded an ARR increase of 4.7% to ₹4,454, while Joint Venture hotels saw a 10.3% rise to ₹6,972.
- Digital Integration: Initiatives include AI-based revenue management tools and the “Regenta Rewards” loyalty platform to enhance bookings and pricing efficiency.
Macro Pressures and Company-Specific Challenges
The company navigates industry headwinds balanced by domestic demand drivers:
- Ind-AS Accounting Impact: Lease accounting under Ind-AS continues to create notional bottom-line pressures through elevated depreciation and finance charges.
- Rising Input Costs: Increases in employee benefits, power, and fuel expenses are compressing margins across the sector.
- Sector Competition: The mid-market segment faces intensified expansion from domestic and international chains, elevating customer acquisition costs.
- Geopolitical/Tariff Exposure: Operations remain predominantly domestic within India (with limited Nepal presence), resulting in negligible direct exposure to international trade tariffs or geopolitical risks.
Royal Orchid Hotels Limited (ROHLTD) SWOT Analysis
Strengths
- Asset-Light Model: Emphasis on managed properties enhances Return on Capital Employed and reduces capital intensity.
- Strong Brand Tiering: Segmentation from budget to upscale captures diverse traveler segments.
- Geographic Diversification: Presence in over 78 destinations mitigates regional market risks.
Weaknesses
- Profitability Pressures: Reported PAT affected by high depreciation and finance charges from lease accounting.
- Expense Growth: Operating costs have outpaced revenue in certain periods.
- Lease Dependence: Exposure to rent escalations in leased properties.
Opportunities
- Vision 2030 Expansion: Significant portfolio growth to deliver scale benefits and enhanced brand strength.
- Religious and Leisure Tourism: Openings in key hubs capitalize on rising domestic spiritual, safari, and wedding travel.
- Loyalty Monetization: Regenta Rewards program reduces reliance on OTAs and boosts direct bookings.
Threats
- Regulatory/Accounting Changes: Potential further impacts from Ind-AS or local taxes.
- Alternative Accommodations: Competition from homestays, villas, and fintech-enabled platforms in leisure segments.
- Economic Sensitivity: Corporate and MICE demand vulnerable to Indian economic fluctuations.