OHL Valuation 2026: Is Nepal's Radisson Hotel Undervalued?

Executive Summary

A Storied Brand at a Strategic Crossroads

Oriental Hotels Limited (OHL), the sole owner-operator of the 260-room Radisson Hotel Kathmandu at Lazimpat, is listed on NEPSE. The Radisson franchise, the Lazimpat location, the exclusive airport lounge contract, and a newly renovated property create a competitive moat that rivals on the exchange can't match. The business just achieved its biggest operational milestone in a decade: full hotel operations began on June 1, 2026, ending a multi-year capital expenditure and renovation cycle. The disappointing numbers for FY2082 – revenue down 9.2% to NPR 104.9 Crore, net profit down 64.7% to NPR 4.4 Crore – are directly due to operating a partially offline hotel during peak tourist season while the main building was under renovation. This is a one-time shock, not indicative of structural decline. The underlying business remains stable: gross margins stayed at 87.6%, airport lounge revenues are intact, and the Radisson GDS booking engine is still operational. What was compromised was operational capacity, which has now been fully restored. OHL enters FY2083 with 260 refurbished rooms, 30 new service apartments, no ongoing construction overhang, and an earnings trajectory that is set to improve from the FY2082 low. The key question for investors is not whether this is a good business – it is – but whether the current price of NPR 708 is the right moment to invest and under what conditions it might be more favorable.

Revenue FY25 108.86 Cr ▼ 10.5% YoY

Net Profit FY25 4.38 Cr ▼ 64.7% YoY

Occupancy FY25 37.2% vs. 42.7% in FY24

EBITDA FY25 26.9 Cr Margin: ~24.7%

Company Profile

Nepal's First-Mover in International Luxury Hospitality

Oriental Hotels Limited (OHL), which was founded in 1994 as a private company and has been publicly traded on NEPSE since August 21, 2001, was the first company in Nepal to open a five-star hotel with an international brand in Kathmandu. The Radisson Hotel Kathmandu is situated in the nexus of demand for upscale leisure and business travel, on Lazimpat Road, the capital's diplomatic district, about 5 km from Tribhuvan International Airport.

Operating as a special purpose vehicle (SPV), OHL is solely focused on this one asset: a 260-key hotel spanning 1.6 acres (~6,500 sq. m.) with six restaurants, a full-service spa, a fitness facility, an executive lounge, and MICE facilities that can accommodate up to 800 guests. The hotel's management franchise arrangement with the Singapore-based Radisson Group provides OHL access to the worldwide reservation network, the ability to participate in reward programs, and operational standards, which is a competitive advantage that significantly sets the establishment apart from locally run rivals.

The completion and operationalization of 30 serviced apartments (starting in April 2025) as part of an extension project, which added a new revenue vertical that crosses hospitality and real estate income, was a significant development in FY2025. These Radisson-branded units are anticipated to cater to longer-stay business customers, a market category that often yields higher RevPAR with lower staffing intensity compared to temporary rooms.

Beyond the hotel itself, OHL derives approximately 23% of operating income from its executive lounge operations at Tribhuvan International Airport, an unusually stable, high-margin annuity stream tied to air-traffic volumes rather than hotel occupancy cycles. This revenue diversification is a consistent talking point in credit agency assessments and represents a structural buffer not enjoyed by most listed hotel peers.

★ MAJOR DEVELOPMENT: RENOVATION COMPLETE

Full Hotel Operations Resumed: June 1, 2026

Radisson Hotel Kathmandu has completed a full renovation of its main building and has resumed full hotel operations effective June 1, 2026 – one of the largest operational accomplishments in OHL’s recent history. The renovation, carried out under the KUP Complex Extension Project (contracted to Nepal Adarsha Nirman Company), included a complete refurbishment of the guest rooms, lobby, and common areas, restaurant outlets, banquet facilities, spa and wellness facilities, and back-of-house infrastructure, upgrading the 30-year-old property to contemporary international five-star standards.

The renovation story behind the numbers:  Renovation of the OHL’s main building began in late 2024 and continued through May 2026, during which time guests were accommodated in a separate wing. Guest reviews from December 2025, “main building under renovation, stay was in small building and not so good”, bear witness to the visible operational disruption during the peak winter tourism season. This is exactly when OHL should have had its best occupancy numbers, and its absence from normal operations is the primary reason FY2082 revenue and profit were disappointing. In short, FY2082’s bad results are a renovation artefact, not a structural demand failure.

What the balance sheet is telling investors: The renovation scale is confirmed forensically by OHL's FY2082 balance sheet. While Capital Work-in-Progress simultaneously fell from NPR 717 million to just NPR 12.8 million, Net PPE increased by NPR 1.01 billion, from NPR 3.89 billion (FY2081) to NPR 4.90 billion (FY2082). This accounting signature, which shows a significant CWIP decline and a PPE jump, is standard proof that a significant renovation project has been completed and capitalized. In addition to the NPR 70+ crore service apartment construction, the entire repair and extension program represents a cumulative expenditure of over NPR 110–120 crore in the main structure alone. In essence, OHL has constructed a new hotel inside the framework of its current property.

What investors can expect post-June 1, 2026: The partially operational hotel that produced FY2082's revenue is completely different from a fully rebuilt five-star establishment with 260 refurbished rooms, 30 new service apartments, and updated F&B and spa amenities. Now, management can: (i) market the property as recently renovated on international OTAs and the Radisson GDS; (ii) command premium ARR closer to NPR 11,000–13,000 for the refurbished inventory; (iii) pursue large corporate contracts previously lost to newer competitors; and (iv) target MICE business with fully operational banquet infrastructure. In FY2083, there should be a significant financial turning point.

Capital structure note: Total shares outstanding are 1,18,44,950 units (1.18 crore), of which 70% (82.9 lakh) are promoter-held, and 30% (35.5 lakh) are public float. The limited float can amplify price volatility and reduce liquidity in secondary market trading. The company also proposed 26.63% right share, which increases the share outstanding to 1,50,00,000 units.

Financial Performance

FY2082: A Renovation-Depressed Trough, not a Structural Break

When analyzing OHL's FY2082 figures, context is crucial. When combined with the fact that the hotel's main structure was largely or completely offline for renovations for the most of the fiscal year, the 9.2% revenue decline and 64.7% profit collapse appear concerning. The main building was undergoing intensive renovations during the winter tourist season of late 2025 (October–December), which has historically been OHL's peak occupancy window. In its most commercially significant quarter, the hotel was essentially operating as a reduced-capacity establishment. RevPAR and F&B revenue decline at the same time when a hotel rents out fewer rooms at interrupted service levels. That's exactly what took place. The gross margin remained stable at 87.6%, indicating that the company's pricing and demand foundations remain strong. OHL just had fewer refurbished rooms to sell, which was a supply-side issue.

Key Financial Highlights (NPR in Crores)

Particulars	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
Revenue from Operations	123.59	69.11	9.24	57.02	108.67	115.56	104.93
Gross Profit	108.84	59.94	6.77	45.39	91.82	101.44	91.97
Gross Margin	88.10%	86.70%	73.30%	79.60%	84.50%	87.80%	87.60%
Operating Profit (EBIT)	43.41	11.34	-22.57	3.22	31.33	24.98	14.35
Finance Cost	4.04	3.16	3.61	5.2	11.14	9.97	10.08
Profit Before Tax	39.37	8.18	-26.18	-1.98	20.19	15.01	4.27
Net Profit / (Loss)	30.85	6.69	-20.36	-2.46	16.09	12.4	4.38
EPS (NPR)	28.72	5.93	-18.05	-2.18	14.27	10.99	3.7
Book Value per Share	210.5	197.5	179.4	174.1	337.8	343.6	330.7

Balance Sheet Snapshot (NPR in Crore)

Particulars	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
Total Assets	334.19	333.08	325.88	381.8	573.19	583.62	602.75
Property, Plant & Equipment	237.03	233.18	224.73	229.57	395.12	389.53	490.47
Cash & Equivalents	53.56	49.16	36.94	42.19	43.33	32.03	29.9
Total Equity	226.14	222.78	202.42	196.45	381.11	387.57	391.65
Total Borrowings	60.87	65.99	88.62	97.96	93.56	102.34	127.65
Net Debt	7.31	16.83	51.67	55.77	50.22	70.31	97.75
Debt/Equity Ratio	0.07x	0.15x	0.46x	0.50×	0.25×	0.26×	0.33×

The drop in earnings in FY2025 is driven by three converging headwinds: (a) decline in room occupancy by 12.8% from 42.7% to 37.2% due to competitive pressure from new entrants and maintenance of hotel facilities; (b) sustained high finance costs (~NPR 100.8M) due to debt taken up for the PPE expansion program; and (c) rising employee benefit expenses (+NPR 326.9M) in line with industry-wide wage inflation in the hospitality labor market in Kathmandu. Gross margin was flat at 87.6%, suggesting that the core hotel operations are still operationally sound. The earnings weakness is largely a cost structure and leverage issue, not a revenue quality issue.

The DuPont decomposition clearly shows the ROE erosion, with net profit margin compressed from 14.8% (FY2023) to 4.2% (FY2025), while asset turnover continues to be low at 0.17x and equity multiplier at 1.54x, suggesting that OHL’s financial leverage is modest and not the main factor of ROE compression. The core culprit is operating profitability.

Revenue Segmentation

Rooms + F&B + Airport Lounge: A Three-Pillar Model

Revenue Segment	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025	% of FY25	YoY
Room Revenue	44.85	22.93	1.57	14.87	36.85	42.57	33.36	31.79%	-21.65%
Food & Beverages	48.28	27.37	5.4	32.04	46.25	44.33	39.27	37.43%	-11.40%
Executive Lounge	21.24	14.38	1.91	6.83	19.55	23.26	27.2	25.92%	16.94%
Spa & Health Club	3.92	2.25	0.19	1.54	3.11	2.56	2.96	2.82%	15.55%
Laundry, Telephone, Others	5.31	2.17	0.18	1.76	2.92	2.84	2.14	2.04%	-24.54%
Total Revenue	123.59	69.11	9.24	57.02	108.67	115.56	104.93	100.00%	-9.20%

Standout trend: Despite a decline in core hotel revenues, the Executive Airport Lounge is currently the top performer, rising 16.9% in FY2025. It operates as a quasi-annuity anchored to passenger traffic at Tribhuvan International Airport, which handled about 8.2 million passengers in FY2024, accounting for 25.9% of total income. Because of this segment's tenacity, analysts (as well as ICRA Nepal) regularly see OHL's diverse revenue streams as a credit positive, even during downturns.

Industry Outlook

Nepal Tourism: A Rising Tide with Seasonal Undercurrents

Nepal tourism recovery is structurally on track. International arrivals to Nepal from January to October 2025 reached 943,716, a trend that suggests surpassing the 1.1 million marks in the full year of 2025. India (243,350 visitors in ten months), followed by the US (93,985), China (78,929), UK (47,261), and Bangladesh (45,287) continue to dominate source markets. The 19.1% of arrivals from Europe is a segment that has a disproportionate preference for premium branded hotels such as the Radisson.

The Nepal Rastra Bank’s Economic Activity Study 2024/25 states that the average hotel room occupancy in Bagmati Province has touched 57%, showing a meaningful improvement from 51.9% in FY2023/24. Seasonal peaks in October–November 2024 reached 67.8%, consistent with trekking-season trends. The Travel & Tourism market of Nepal is projected to grow at a CAGR of 8.46% during the period 2025-2029 to USD 686M by 2029. The Hotels sub-segment is expected to grow at a higher CAGR of 14.81% to USD 372M by 2030 (Statista 2025). Government campaigns, Nepal tourism year branding, and improved air-connectivity, especially China routes, support the structural demand outlook.

Period (2024–25)	Occupancy Rate	Comment
Jul–Aug 2024	47.60%	Monsoon low season
Aug–Sep 2024	59.70%	Pre-festival ramp
Sep–Oct 2024	59.20%	Peak shoulder
Oct–Nov 2024	67.80%	Trekking peak season
Nov–Dec 2024	63.70%	Post-Dashain business
Dec–Jan 2025	56.60%	Winter leisure
Feb–Mar 2025	60.50%	Spring shoulder
Mar–Apr 2025	63.60%	Spring trekking peak
Apr–May 2025	56.80%	Post-season
May–Jun 2025	54.50%	Pre-monsoon
Jun–Jul 2025	49.20%	Monsoon onset
Avg. FY 2024/25	57.00%	Industry benchmark

Nepal Hotel Sector Occupancy Bagmati Province (NRB Data)

Critical gap: OHL's reported occupancy in FY2025 was roughly 37.2%, which is 19+ percentage points lower than the industry-wide Bagmati occupancy average of 57% in FY2024–2025. The most powerful operational tool at management's disposal is closing this gap. According to the DCF base model, OHL would recover to about 63% occupancy by FY2035, which would mean an improvement of about 250 basis points annually.

Competitive Positioning

Peer Benchmarking: OHL Lags on Occupancy, Holds on Rate

Hotel (Brand)	Rooms	3-Yr Avg Occupancy	3-Yr Avg ARR (NPR)	3-Yr Avg RevPAR
Taragaon Regency (Hyatt)	280	60.10%	12,155	7,239
City Hotel (Hyatt Centric)	153	58.40%	9,160	5,346
Soaltee Hotel (Crowne Plaza)	260	58.40%	9,489	5,536
Chandragiri Hills Resort	100	35.70%	10,944	3,910
OHL — Radisson Kathmandu	260	39.80%	9,772	3,957

OHL's ARR of NPR 9,772 is competitive; it is far above the resort category, slightly below Soaltee (NPR 9,489, comparable brand tier). The main area of weakness is occupancy, with OHL trailing Taragaon and Soaltee by about 20 percentage points at a three-year average of 39.8%. Despite having an equal number of rooms, OHL's NPR 3,957 compares unfavorably to Soaltee's NPR 5,536 and Taragaon's NPR 7,239. This occupancy variation has a direct mathematical impact on RevPAR.

The Radisson's historically higher rack rates (which filter out price-sensitive corporate demand, Soaltee catches), legacy positioning issues during peak recovery periods, and escalating supply-side competition are all probable contributing factors to the occupancy gap. The competitive bar is rising in Kathmandu, where there are currently 19 five-star hotels as well as newcomers like an InterContinental with 225 rooms. The Radisson global distribution network, MICE infrastructure, and the recently constructed serviced apartments continue to be OHL's strategic advantages. Accelerated corporate client acquisition and targeted yield management will be necessary for a structural re-rating of occupancy indicators.

Discounted Cash Flow Valuation

Three Scenarios: Base, Bull, and Bear

Our DCF analysis, discounted at a WACC of 10.84%, forecasts ten years of free cash flow to the firm (FCFF) under three different occupancy-rate and revenue scenarios. The Gordon Growth terminal value is calculated using a terminal growth rate of 3.70%, which is in line with Nepal's medium-term nominal GDP growth. The net book value of equity (shareholders' equity per share from the balance sheet) is then added to the intrinsic equity value (FCFE) to produce a Book Value Adjusted fair value per share, which grounds the DCF in the company's actual recorded asset base. This approach is more representative of a capital-intensive, asset-owning hotel entity like OHL.

WACC Assumptions		Projection Assumptions
Adjusted Beta (β)	1.02	Terminal Growth Rate	3.70%
Risk-Free Rate (after 6% tax)	3.24%	Base Occupancy (FY2026)	40.6%
Market Return (NEPSE CAGR 23Y)	11.60%	Bull Occupancy (FY2026)	44.7%
Cost of Equity (CAPM)	11.77%	Bear Occupancy (FY2026)	38.6%
Avg Lending Rate (adj for tax)	8.07%	Base ARR (FY2026)	NPR 9,772
Equity Weight (Q2 FY82-83)	74.8%	Annual ARR Escalation	1.0% p.a.
Debt Weight	25.2%	F&B as % of Room Revenue (Base)	110%
Total WACC	10.84%	Base CAPEX (annual)	NPR 153.9M

Key valuation insight: OHL is presently priced at NPR 708, which is 59% more than the bear-case adjusted value of NPR 445.9 and 44% more than the base-case Book Value-adjusted intrinsic value of NPR 491.5. As a result, the current stock price is pricing in a situation where occupancy, ARR, or revenue increase far more quickly than our initial projections. Nevertheless, the market's optimism is not unreasonable given that the renovations are now finished and full operations will restart on June 1, 2026; rather, it is merely asking investors to pay now for the earnings rebound that will only show up in FY2083 quarterly reports. There will be a significant margin of safety for patient investors who enter close to or below the Book Value-adjusted base scenario of NPR 491.

Scenario	DCF Value (NPR)	Adj. for Book Value (NPR)	Premium / (Discount) to CMP
Bull Case	180.7	508.9	–27.3% (upside)
Base Case	163.3	491.5	–29.8% (overvalued)
Bear Case	117.8	445.9	–36.3% (overvalued)
Weighted Average	153.9	482.1	–31.1%

Investment Verdict

The Company Is Good. The Question Is Always the Price You Pay.

Is OHL a good company? Yes, without a doubt. The 260-room, five-star Radisson Hotel Kathmandu is situated in a diplomatically significant area of Kathmandu. It is supported by a worldwide franchise brand that handles bookings on its own, grants access to loyalty programs, and upholds quality standards that no domestic operator can match. An almost annual revenue stream that is structurally unrelated to hotel occupancy is added by the airport executive lounge. For a capital-intensive hospitality business in the middle of renovations, the balance sheet's debt-to-equity ratio of under 0.33× is remarkable. As of June 1, 2026, the hotel has completed its most expensive and disruptive renovation in its thirty-year existence. Thirty additional service apartments have been added, every room has been renovated, and the F&B and spa have been updated. OHL has never provided a guest with a stronger product than this one.

Is it overpriced right now? Modestly, yeah, but not outrageously, at NPR 708. The trailing P/E of 191× on the trough EPS of NPR 3.70 for FY2082 is not a measure of the company's earning potential, but rather an artifact of remodeling interruption. Forward earnings are important. According to our projections, OHL's first full year of post-renovation, full-capacity operations, FY2083, should result in EPS of NPR 13–19. Fair value is NPR 600 at NPR 15 EPS and a P/E of 40× (appropriate for a franchise hotel in earnings recovery). It is NPR 665 at NPR 19 EPS and 35×. NPR 708 is not that costly at those forward valuations, but if the occupancy ramp is slower than anticipated, you won't have much leeway.

When should you invest? It is worthwhile to focus on two particular windows. The first is a price correction: if OHL falls toward NPR 620–660, risk-reward improves significantly. You are purchasing at about 1.90–2.01× book, which is only 26–34% higher than our Book Value-adjusted base DCF of NPR 491. This implies only NPR 14 EPS at a 45× P/E to justify the entry. The BV-adjusted DCF, forward earnings, and asset replacement cost all converge to support a truly compelling entry below NPR 580. The second window is a crucial catalytic confirmation: the recovery thesis is confirmed if OHL's Q1 FY2083 report, which is anticipated in October 2026, shows occupancy rising to 48%+ and quarterly revenue exceeding NPR 30 crore. Even NPR 700–720 becomes defendable at that point, and the stock will rise because of the momentum, but you will have missed the optimal risk-adjusted entry.

What could go wrong? The renovation cycle raised total borrowings to NPR 1.28 crore, and at current profitability levels, financing expenses of around NPR 10 crore per year now account for a disproportionate part of earnings. EPS will be underwhelming, and the stock may re-rate down toward NPR 580–620 if occupancy recovery is slow, say 40–42% in FY2083 instead of the 48–50% the market anticipates. There is a supply excess in Kathmandu as well; the city can accommodate three million visitors, but only 1.15 million do so. OHL's ARR pricing power may be weakened if competing hotels that shuttered in 2025 aggressively relaunch with lower rates in FY2083. These are base-case factors that prudent investors need to account for; they are not speculative risks.

The bottom line, plainly stated: On NEPSE, OHL is among the better companies. Its assets are real, its brand is authentic, its moat is defendable, and it recently finished a restoration that future visitors will see right away and that revenue numbers will validate starting in Q1 FY2083. This entry has a significant margin of safety and is clear and well-supported below NPR 580. For investors with a two-to-three-year horizon, it is an appealing entry at NPR 620–660. You are paying fair-to-full value for a company in its early stages of recovery at NPR 700–750; this is not a bad time to invest heavily. In October 2026, view the Q1 FY2083 results. Be in the stock before the data is disclosed if occupancy and revenue support the trajectory; once the earnings inflection becomes apparent, the market will immediately re-rate.

The single most important number to watch: OHL's Q1 FY2083 unaudited result, which is anticipated in October 2026 and will provide the market with the first concrete proof of post-renovation performance. Keep an eye out for three things: (1) occupancy above 45%; (2) quarterly revenue above NPR 28–30 crore; and (3) EBITDA margin returning above 28%. Regardless of today's entry price, if all three are satisfied, the stock will probably be much higher in a year. A better entrance below NPR 640 will most likely emerge if they don't succeed. Only the rate of the underlying asset's recovery is under scrutiny, not its quality.

Disclaimer & Disclosures: This research note is prepared for informational purposes only and does not constitute investment advice, a solicitation to buy or sell securities, or a recommendation to invest in any particular instrument. The financial data used in this analysis is sourced from OHL's audited annual reports (FY2019–FY2025), NEPSE public disclosures, ICRA Nepal rating reports (Feb 2024, Jul 2025), Nepal Rastra Bank's Economic Activity Study 2024/25, Nepal Tourism Board statistics, traveller reviews from Trip.com and Booking.com (Dec 2025–Feb 2026), confirming the main building renovation, Nepal Adarsha Nirman Company project records, Statista market forecasts, and ShareSansar/ShareHub secondary market data. The renovation completion date of June 1, 2026, and full operations resumption have been confirmed by OHL management and are reflected in this report. All NPR figures are in Nepalese Rupees; Crore = 10 million NPR. DCF projections are forward-looking and subject to material uncertainty. FY2083 recovery projections are illustrative and not audited forecasts — actual performance may differ materially. This report does not account for changes in Radisson franchise terms, macroeconomic shocks, regulatory changes, or undisclosed company actions. Investors should conduct independent due diligence and consult a SEBON-registered investment advisor before making investment decisions. Past performance of OHL shares is not indicative of future returns. The publisher of this newsletter holds no position in OHL shares as of the date of publication.

Data as of: June 5, 2026 (Jestha 2083 BS) ·  Fiscal references: Nepal fiscal year (mid-July to mid-July)·  OHL Website: ohl.com.np  ·  NEPSE Symbol: OHL  ·  Key Update: Full hotel operations resumed June 1, 2026, post-renovation