Following the furore and excitement around the Prana Pratishtha ceremony for the Ram Mandir in Ayodhya, several stocks have been running up. These stocks primarily belong to companies that are directly involved in the construction of the temple or are set to gain from the tourist inflow set to unfold. Some of the counters have seen returns as high as 150% in the last one month.
Here are the top stocks to watch –
Larsen & Toubro
Since securing the prestigious ‘Shri Ram Janmabhoomi Temple’ project in November 2020 for the construction of Lord Ram’s temple in Ayodhya, Larsen & Toubro (L&T), the engineering and construction major, has experienced a robust uptrend in its stock performance. Over the course of three years, the share price of this infrastructure giant has transformed into a multibagger, rallying more than 233%. Starting at Rs 1,080 on November 17, 2020, the stock reached Rs 3,605 on January 15, 2024.
Pakka Ltd
The small-cap stock has witnessed a staggering 150% rally so far in January. This surge is attributed to Pakka Ltd’s role in supplying compostable plates, bowls, and spoons for the Prana Pratishtha ceremony on January 22.
Kamat Hotels
Kamat Hotels, with a market share of less than Rs 900 crore, has experienced a commendable 71% surge in its shares this month. The company plans to inaugurate a new hotel with 50 rooms in Ayodhya and has announced intentions to open two additional hotels in the temple town.
SIS Ltd
Shares of private security group SIS Ltd surged up to 18% following the announcement that the company has signed an agreement with the Ram Mandir Trust to deploy its personnel at the temple complex in Ayodhya.
Praveg
Praveg, having opened a luxury tent resort in Ayodhya, has seen a substantial 35% increase in its shares in January. The ultra-luxury tent city boasts a capacity of 30 tents with one restaurant.
Apollo Sindoori Hotels
Chennai-based Apollo Sindoori Hotels has witnessed a significant 54% surge in its shares this month. The hospitality service management and support services company is currently constructing a multi-level parking facility in Ayodhya’s Tedhi Bazar to accommodate visitor vehicles.
Thomas Cook
Investors have turned their attention to tour operator Thomas Cook, with its shares rallying around 18%. The company has launched religious tour packages centered around Ayodhya, Varanasi, and Prayagraj.
IRCTC
Investors looking to capitalize on the tourism theme have turned to IRCTC, which has a monopoly in online booking of train tickets. The stock is up 17% so far this month.
IndiGo
Initiating daily flights between Ayodhya and Delhi, IndiGo has gained over 2% in the past month and over 14% in the last six months.
Indian Hotels
IHCL, a large-cap stock with a market capitalization exceeding Rs 73,000 crore, has surged by 23% in the last month. IHCL has signed agreements for two greenfield hotels in Ayodhya under the Vivanta and Ginger brands.
“Without doubt, Ayodhya will become a major spiritual tourism destination. The potential for tourism-related business is enormous and has attracted investors into hotel, travel and other tourism-related stocks. While appreciating the long-term potential of investment, investors should not go overboard chasing these stocks that have elevated prices. Many stocks in this segment have run up too much too fast and have shot up by more than 100% in just few weeks,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Vijayakumar also said that, this is a sentiment-driven rally triggered by retail exuberance. Broadly, the valuation of the mid and small cap segments are too high, unjustified, almost in frothy territory. This mid and small cap frenzy is partly driven by the newbie retail investors who are chasing these stocks and partly by mid and small cap mutual funds to which inflows are strong and sustaining.