Jhunjhunwala Portfolio: This hospitality stock included in the portfolio of veteran investor Rakesh Jhunjhunwala has been ranked by Motilal Oswal in this year’s top pick. In this Big Bull had also increased its stake last quarter.
Jhunjhunwala Portfolio: A hospitality stock included in the portfolio of veteran investor Rakesh Jhunjhunwala, known as India’s Warren Buffett, has been ranked among the top picks of 2022 by brokerage firm Motilal Oswal. The brokerage firm believes that the company is continuously strengthening its brands and expanding its operations through management contracts, which can boost the price of Indian Hotels Company.
Jhunjhunwala holds 1,42,79,200 shares in Indian Hotels, ie he holds 1.08 percent stake. His wife Rekha Jhunjhunwala holds 1,42,87,765 shares of the company. According to the shareholding pattern of December 2021 quarter, both hold 2.16 per cent stake in Indian Hotels. This company is constantly presenting the new and again the old brand in a new way. Apart from this, it is creating a hospitality ecosystem, due to which the market experts are positive about this stock.
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Brokerage firm gave buy rating at target price of Rs 258
- According to analysts at Motilal Oswal, Indian hotels are shifting from an asset-heavy model to an asset-light operating strategy, which is expected to accelerate the company’s business expansion.
- Indian Hotels made a strong presence in the year 2020 during the Corona epidemic. Hoteliers struggling with no brand and pressure in the post-Covid era started joining brand names like Indian Hotels to take advantage of their established distribution network.
- According to the brokerage firm, the company had received a revenue of Rs 220 crore in the financial year 2020, which is expected to reach Rs 350 crore soon. The brokerage has said in its report that the EBITDA generated from management contract income is 70-80 per cent without capital investment or minimal capital investment, due to which the return on capital investment is attractive. Motilal Oswal estimates that the share of contract income EBITDA in consolidated EBITDA will be 20 percent in FY 2021.
- The hospitality sector has suffered a major setback due to the third wave of Corona, but due to rapid vaccination and fewer people being admitted to the hospital, the situation in this sector is expected to improve soon and expect the next two finances. There can be a strong recovery in the year. Brokerage firms are seeing the current situation as a better buying opportunity.
- The biggest risk regarding investment in this is that due to the epidemic there may be delay in getting back on track or increasing competition for acquisition of rooms under management contract or business expansion may not be successful.
- The brokerage firm has advised investors to invest in it at a target price of Rs 258.
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Prices up 105% in five years
On the NSE, the price of Indian Hotels today (January 21) fell by more than two per cent to Rs 203.75, but it has gained about 75 per cent in the last one year. Today it has closed at Rs 206.90 on NSE. In the last five days, its prices have slipped by about 0.83 percent amid the fall of the market, but it has gained 15 percent in one month and 105 percent in the last five years. Its 52-week record price is Rs 230.14, at which it reached on 14 October 2021.
(Article: Harshita Tyagi)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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