If you are thinking of investing in a strong stock included in Rakesh Jhunjhunwala’s portfolio, then you can keep an eye on Indian Hotels. Tata Group’s hotel sector company Indian Hotels has made a profit in the December quarter after incurring losses for 6 consecutive quarters.
Tata Group Stock to Invest: If you are thinking of investing in a strong stock included in the portfolio of stock market veteran Rakesh Jhunjhunwala, then you can keep an eye on Indian Hotels. Tata Group’s hotel sector company Indian Hotels has made a profit in the December quarter after incurring losses for 6 consecutive quarters. The company’s standalone RevPAR has grown by 1.9 times on a year-on-year basis and 62 percent on a quarterly basis. After the results, brokerage houses are looking bullish about the company working in this hotel sector. Anyway, this stock is expected to get a big advantage ahead of the opening up economy theme. The way the occupancy rates and room bookings have increased since the second wave, the company is expected to grow further. Rakesh Jhunjhunwala holds 2.2 percent stake in the company. The company has 28,566,965 shares in his portfolio.
How much return can I get
Brokerage house Motilal Oswal has given a target of Rs 265 while advising to buy in the stock. If you look at the current price of Rs 218, then you can get 21 percent return in it. The brokerage says that Indian hotels have been hit hard by the COVID 19 epidemic. At the same time, in the midst of the third wave of corona virus, once again uncertainty has increased in the hospitality sector in the near term. However, higher vaccination and lower hospitalization rate are positive signs. In such a situation, if there is any fall in the stock, one should buy. The brokerage says that this company’s business is based on the asset light model. Further, the company’s revenue is expected to increase along with the EBITDA margin.
Why will the company benefit in the future?
Brokerage house says that like FY22, strong recovery is expected during FY23E/FY24E. As the economic activity normalises, the ARR will improve. With economic activity returning to normal, occupancy rates and hotel room bookings will also increase as seen after the second wave. Higher income from management contract, cost realization effort and increase in F&B income will further benefit the company. The brokerage has raised the EBITDA estimate by 20 per cent for FY22 and retained the same for FY23 and FY24.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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