The scare of the Covid-19 pandemic is reducing and the hospitality sector is recovering. There was a strong domestic demand and foreign tourists returned after two muted years. Indian Hotels Company (IHCL) now has strong room bookings till May 2022.
This Rakesh Jhunjhunwala portfolio stock made a fresh all-time high of ₹ 245.45 on Wednesday. The stock has rallied 30.24% so far in 2022. The ace investor holds about 1.42 crore shares of the company, and his wife Rekha Jhunjhunwala also holds 1.42 crore shares. Collectively, this is a 2.16% stake in the company.
Puneet Chhatwal, President of Hotel Association of India (HAI) said that while international travel has gone back 30 years globally, and the ripple effect of tourism is affecting the economy of countries, the Indian hospitality sector has rebounded due to various components of domestic travel and a vigorous internal demand, at the industry body’s 25 th annual general meeting held on March 16.
“We want the company to have strong fundamentals and a strong platform going forward so that if there was another Black Swan event like the pandemic, we are better positioned to tackle it. More focus would be on operating margins, free cash flows and having a healthy balance sheet structure,” said Puneet Chhatwal MD & CEO, IHCL.
Financials
For the October to December quarter, the company reported a consolidated total income of ₹ 1133.92 crores, up 84.52% from ₹ 614.53 crores, earned during the same period in the previous year.
Targets
HDFC Securities has given a buy call on Indian Hotels Company Limited with a target price of ₹268. The time period given by the analyst is three months.
Sharekhan is bullish on the stock and has given a buy rating on the stock with an unchanged target price of ₹286 in its research report dated March 29, 2022. This means that there is an upside of 20.77%. The analysts saw that there was a good pickup in demand since mid-February, 2022. They expect that Q1FY2023 revenues are likely to be above pre-pandemic levels.
The stock is expected to rally further as a “strong recovery in domestic leisure travel would help IHCL post better performance in the medium term,” the brokerage said.
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