Hotel stocks in focus; TajGVK, Royal Orchid, Indian Hotels up over 5%
Indian Hotels Company has rallied 9% to Rs 147 on BSE in intra-day trade, gaining 12% in the last six trading days.
 "Hotel stocks in focus; TajGVK, Royal Orchid, Indian Hotels up over 5%")
premium
Shares of hotel companies are in focus with TajGVK Hotels & Resorts, Royal Orchid Hotels, Indian Hotels Company, EIH Associated Hotels and India Tourism Development Corporation (ITDC) rallying by up to 18% on BSE in intra-day trade on the expectation of an exponential growth over the next three years.
Indian Hotels Company has rallied 9% to Rs 147 on BSE in intra-day trade, gaining 12% in past six trading days, after the company reported 400 basis points (bps) Ebitda (earnings before interest, tax, depreciation and amortization) margin expansions at 10.3% in September quarter (Q2FY19). Indian Hotels is the largest player in the hospitality sector in India, with an inventory of 17,000+ rooms.
The market experts believe that the domestic hotel industry is expected to witness robust growth in the coming years led by higher occupancy, limited capacity addition and a rise in spending by domestic travellers.
“In recent few years, the industry has been witnessing some green shoots mainly led by a decline in room supply and increase in demand. The proposed supply of rooms has significantly reduced from 114,446 in FY08 to 47,067 in FY17 (source: HVS). This is further validated by the fact that demands growth (5.0% YoY) has outpaced supply growth (3.2% YoY) in FY18,” analysts at ICICI Securities said in result update.
The brokerage firm expects occupancy levels to improve further due to the rise in spending by domestic travellers. In addition, with the improved tourism measures by the government, we expect the sector to see a better growth trajectory and healthy pricing in the next three to four years.
Analysts at JP Morgan believe market demand-supply dynamics will be favorable for the hotel industry until 2021 and the hotel cycle will get into mid-cycle over FY19/20 indicating the scope for RevPAR (Revenue per Available Room) improvement across domestic markets. Given the imputed leverage both in operations and financials, consequent improvements in earnings could be significant.
Indian Hotels Company has rallied 9% to Rs 147 on BSE in intra-day trade, gaining 12% in past six trading days, after the company reported 400 basis points (bps) Ebitda (earnings before interest, tax, depreciation and amortization) margin expansions at 10.3% in September quarter (Q2FY19). Indian Hotels is the largest player in the hospitality sector in India, with an inventory of 17,000+ rooms.
The market experts believe that the domestic hotel industry is expected to witness robust growth in the coming years led by higher occupancy, limited capacity addition and a rise in spending by domestic travellers.
“In recent few years, the industry has been witnessing some green shoots mainly led by a decline in room supply and increase in demand. The proposed supply of rooms has significantly reduced from 114,446 in FY08 to 47,067 in FY17 (source: HVS). This is further validated by the fact that demands growth (5.0% YoY) has outpaced supply growth (3.2% YoY) in FY18,” analysts at ICICI Securities said in result update.
The brokerage firm expects occupancy levels to improve further due to the rise in spending by domestic travellers. In addition, with the improved tourism measures by the government, we expect the sector to see a better growth trajectory and healthy pricing in the next three to four years.
Analysts at JP Morgan believe market demand-supply dynamics will be favorable for the hotel industry until 2021 and the hotel cycle will get into mid-cycle over FY19/20 indicating the scope for RevPAR (Revenue per Available Room) improvement across domestic markets. Given the imputed leverage both in operations and financials, consequent improvements in earnings could be significant.
| COMPANY | LATEST | PREV CLOSE | GAIN(%) |
| TAJGVK HOTELS | 174.55 | 156.15 | 11.78 |
| ROYAL ORCH.HOTEL | 125.40 | 115.05 | 9.00 |
| INDIAN HOTELS | 142.50 | 134.50 | 5.95 |
| I T D C | 321.80 | 304.80 | 5.58 |
| EIH ASSOC.HOTELS | 320.80 | 307.95 | 4.17 |
| ORIENTAL HOTELS | 38.75 | 37.40 | 3.61 |
| EIH | 170.00 | 166.75 | 1.95 |
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%