Month: October 2021

Indian Hotels

The Indian Hotels Company Limited runs a range of hotels, resorts, jungle safaris, palaces, spas, and in-flight culinary services. It is a wholly-owned subsidiary of the Tata Group.

Only 2.88 percent of trading sessions in the last 16 years had intraday gains of more than 5%. The stock returned 61.31 percent over three years, compared to 87.94 percent for the Nifty Midcap 100. Indian Hotels Company Ltd., founded in 1902, is a Mid Cap company in the Tourism & Hospitality sector with a market capitalization of Rs 24,671.17 crore.

Chalet Hotels

Chalet Hotels Limited is a leader in the hospitality industry when it comes to asset management and development. The Company’s hospitality platform has seven operating hotels, including one with a serviced apartment, in the important Indian cities of Mumbai, Hyderabad, Bengaluru, and Pune, totaling 2,554 rooms.

Chalet Hotels Ltd., founded in 1986, is a Mid Cap business in the Tourism & Hospitality sector with a market capitalization of Rs 4,884.69 crore. In the quarter ending June 30, 2021, the company reported a total income of Rs 75.28 crore. Although there was a YoY growth of 27.71 percent, there was a -26.26 percent drop in QoQ. In the fiscal year ended March 31, 2021, the company spent 51.63 percent of its operational revenues on interest charges and 30.8 percent on labour costs.

Byke Hospitality

In the last five years, the company’s ROE has been steadily falling. The majority of profits were distributed as dividends to stockholders last year. The stock returned -50.3 percent over three years, compared to 86.43 percent for the Nifty Smallcap 100. The Byke Hospitality Ltd., founded in 1990, is a Small Cap company in the Tourism & Hospitality sector with a market capitalization of Rs 148.56 crore.

Mac Charles (India) Ltd

In the fiscal year ended March 31, 2021, the company spent 37.4 percent of its operating revenues on interest charges and 10.16 percent on labor costs. The stock returned 47.57 percent over three years, compared to 86.43 percent for the Nifty Smallcap 100. In the quarter ending June 30, 2021, the company reported a total income of Rs 7.8 crore. Although there was a YoY growth of 21.91 percent, there was a -24.61 percent drop in QoQ.

Mac Charles (India) Ltd., founded in 1979, is a Small Worth company in the Tourism & Hospitality sector with a market cap of Rs 605.33 crore.

EI Hotels

Only 2.5 percent of trading sessions in the last 16 years had intraday drops of more than 5%. Stock returned -11.68 percent over three years, compared to 87.94 percent for the Nifty Midcap 100. For the fourth quarter in a row, the company has lost Rs 113.23 crore. In a recent research report, ICICI Direct gave the stock a buy recommendation.

Indian Tourism

India Tourism Development Corporation Ltd., founded in 1965, is a Mid Cap company in the Tourism & Hospitality sector with a market capitalization of Rs 3,361.30 crore. The stock returned 42.12 percent over three years, compared to 86.43 percent for the Nifty Smallcap 100. In the quarter ending June 30, 2021, the company reported a total income of Rs 47.6 crore. Although there was a YoY growth of 48.31 percent, there was a -43.54 percent decrease in QoQ.

Best Performing Stocks From Hospitality Sector

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. This article is for educational purpose.

Buy Lemon Tree Hotels

Motilal Oswal has set a price target of Rs 70 on the stock of Lemon Tree Hotels, as against the current market price of Rs 52, which means a sharp upside.

Revenue at the company grew 2 times YoY in 2QFY22, led by robust RevPAR growth of 80% on account of a 19pp improvement in occupancy. The latter was driven by a sharp recovery in retail demand and 14% rise in ARR. EBITDA surged 4.1x YoY benefitting from operating leverage.

Lemon Tree garners 85% of its business from domestic Indian travelers, it is expected to clock a faster recovery as international travel demand gradually revives.

Of the 5,200 owned rooms, 65% of rooms were constructed at a rate of INR5m per key and the balance at INR10m per key, due to increased prices of cement, steel, etc. At current commodity price levels, it is unviable for other players to add/build new supply. This, coupled with constrained

supply over the next 4-5 years, is expected to be benefit Lemon Tree.

“Factoring in better demand visibility, we increase our FY22E EBITDA estimate by 16% (on low base), but have maintained our FY23 EBITDA estimates. We maintain our Buy rating on the stock of Lemon Tree Hotels,” the brokerage has said.

Buy Ceat

Motilal Oswal also has a buy call on the stock of Ceat Ltd. “Operating performance above our estimate led by strong revenue beat, PAT miss due to higher depreciation and interest,” the brokerage has said.

Commenting on the quarter gone by, Mr. Anant Goenka, Managing Director, CEAT, said, “Overall market demand continues to remain robust, despite some lag in Commercial and Farm categories. We witnessed strong growth (28%) compared to the preceding quarter on account of a good performance in the Replacement market, particularly in the Passenger segment. Rising input costs

has impacted gross margin. However, it has been partially offset by price adjustments over the last quarter.”

Buy MCX

The brokerage also has a buy call on commodity exchange company MCX. “We expect the company to see a significant EBIT margin benefit once the new trading software (currently being developed by TCS) goes live (Sep’22). This, along with a positive operating leverage, should aid consistent margin improvement. We expect a 12pp EBIT margin improvement over FY21-23E,” the brokerage has said.

Motilal Oswal remains confident of higher institutional participation and an increase in the number of hedgers over the longer term. This should add depth to the market.

We adopt a positive stance on increasing volumes of underlying commodities, of which MCX would be a primary beneficiary. “We have cut our FY22E/FY23E EPS estimate by 14%/7%, factoring in an operational miss in 2QFY22 and lower other income led by migration of investments to low yield securities. We continue to like MCX for its near-monopoly in the Commodity Exchange segment in India (market share of 92%). We value the company at 37x FY23E EPS. Reiterate Buy,” the brokerage has said.

Disclaimer

The above stocks are picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.