The stock of Asian Hotels has been gaining momentum of late. The stock price has moved up by 7.5 per cent, to Rs 515.4 with a surge in volumes over the last week.
Birla Mutual Fund, HDFC Mutual Fund, LIC and some FIIs such as BSMA, hold majority of the shares at the counter. Inspite of a major runup of the company's stock price, analysts are still bullish about it.
The stock is attractively valued at 17 times and 20 times its price-to-earnings multiple for FY06E and FY07E respectively.
Analysts aver that the stock is cheap when compared to peers such as Indian hotels and the entire hotel sector valuations, which are valued at 27-30 times for FY06E.
The company has its hotels in major metropolitan areas such as Delhi, Mumbai and Kolkata. The company is seen as the one of the largest beneficiaries of the boom in the tourism sector in the country as well as the expected rise in average room rates (ARRs) which come with it.
This is partly proven in its half-yearly performance wherein, net sales increased by 21 per cent, to around Rs 135 crore and net profit increased by a whopping 167.6 per cent to Rs 16.6 crore.
Stock watch: Asian Hotels
Our Markets Bureau / Mumbai Jan 20, 2006, 21:03 IST
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