X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Hotels: Leader to benefit - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Dec 23, 2003

    Indian Hotels: Leader to benefit

    With the Indian travel and tourism industry turning a corner, the hotel sector is going to be one of the key beneficiaries of the turnaround in the sector. Among the listed hotel majors in the country Indian Hotels (the 'Taj' brand) is the most prominent and is likely to be the foremost beneficiary of the expected revival in the sector. Let us take a look at the prospects of the company going forward.

    IHCL has been in the hospitality business for many years now and over the years the company has gathered the expertise the industry demands. This is coupled with the brand i.e. Taj that it has built over the years. Almost all properties of Indian Hotels are heritage sites, which give the company a competitive advantage when compared with the international peers that are predominantly focusing on the business and leisure hotels. As a result, room realisations for IHCL are on the higher end. Given the company's inherent strength in the hotel business, any upturn in the industry cycle is likely to benefit IHCL the most.

    Lack of proper infrastructure has also been hampering growth of the tourism sector over the years. But the continuation of the thrust in improving road, railway, airport and port infrastructure augurs well for the industry. This would result in better connectivity and access to the heritage sites. As a result, the number of tourist arrivals into India in the long run is likely to be much higher than the present 2.5 m arrivals. According to the WTO (World Tourism Organisation), foreign tourist inflow in to India is expected to grow by over 6% between 2000 and 2010.


    Source: Central Statistical Organisation (CSO)

    While the prospects of the company seem encouraging there are concerns in the short term. Competition in key cities has affected in the performance of hotels. Like competition in North Mumbai is likely to have an impact on IHCL's hotel in South Mumbai. Also tourist traffic is growing by 20%-25% in North Mumbai as against only 5% in South Mumbai. This has had an impact on group bookings for its Mumbai hotel, the Taj Mahal. Also there would be a 100% capacity addition by the end of the next five years mainly in north Mumbai.

    At Rs 437, the scrip is quoting on a multiple of 38x its FY04E earnings. The company has been on the look out for acquiring small hotels in the international arena, but it would be some time before that becomes a reality. On the domestic front, the next 2 quarters is the peak season time for the industry. IHCL will benefit from it being the industry leader. The expected opening of Wellington Mews by the year-end will give a further boost to the performance of the company. In the long term, if the spike in international tourist arrival continues, only then the relatively high valuations of Indian Hotels may be justified, till then investors need to be cautious. For more views regarding the company, read our detailed research report on Indian Hotels.

     

     

    Equitymaster requests your view! Post a comment on "Indian Hotels: Leader to benefit". Click here!

      
     

    More Views on News

    Indian Hotels: Domestic Operations Performs Well (Quarterly Results Update - Detailed)

    Oct 17, 2016

    Indian Hotels has reported a 5.6% YoY increase in the consolidated topline and a consolidated loss of Rs 1,695 m for 1QFY17.

    Indian Hotels: On the Slow Road to Recovery (Quarterly Results Update - Detailed)

    Jul 4, 2016

    Indian Hotels has reported a 9.6% YoY increase in the consolidated topline and a consolidated loss of Rs 605 m for FY2016.

    Indian Hotels: Recovery Still Far Away (Quarterly Results Update - Detailed)

    Mar 28, 2016

    Indian Hotels has reported a 13.2% YoY increase in the consolidated topline and a standalone net profit of Rs 1.2 m for the quarter ended December 2015.

    Indian Hotels: A good operating performance (Quarterly Results Update - Detailed)

    Nov 24, 2015

    Indian Hotels has reported a 13.2% YoY increase in the standalone topline and a standalone net profit of Rs 1.2 m for the quarter ended September 2015.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    THE INDIAN HOTELS SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK THE INDIAN HOTELS

    • Track your investment in THE INDIAN HOTELS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON THE INDIAN HOTELS

    THE INDIAN HOTELS - SUN INTL. COMPARISON

    Compare Company With Charts

    COMPARE THE INDIAN HOTELS WITH

    MARKET STATS