Rakesh Jhunjhunwala portfolio stock Indian Hotels Company (IHCL) has jumped 24% so far this year, outperforming benchmark Nifty 50 which has tumbled 11%. Brokerage firms are bullish on Indian Hotels shares after the company highlighted its efforts to grow its existing and new businesses and deploy its capital efficiently to generate better returns in the FY22 annual report. IHCL shares were quoting at Rs 229, up 2% on the NSE intraday. Indian Hotels is one of the 33 stocks held by Big Bull Rakesh Jhunjhunwala in his portfolio. Rakesh Jhunjhunwala and wife Rekha jointly hold a 2.1% stake in this hotel and resorts company as on March 31, 2022, according to the BSE corporate filing of the company.
Stock talk: Should you buy Indian Hotels shares?
Motilal Oswal: Buy
Target price: Rs 278, Upside 30%
According to analysts at Motilal Oswal Financial Services, Indian Hotels’ asset-light model, and new and reimagined revenue-generating avenues, with higher EBITDA margins, bodes well for an expansion in RoCE. “Like FY22, we expect a strong recovery in FY23 and FY24, led by: a) an improvement in ARR once economic activity normalizes; b) improved occupancies, led by business travelers as well as the Leisure segment; c) cost rationalization efforts; d) an increase in F&B income as banqueting/conferences normalizes; and e) higher income from management contracts,” they said. The brokerage reiterated ‘Buy’ rating on the stock with a SoTP-based target price of Rs 278 apiece, implying 30% upside from Wednesday’s closing price of Rs 215.
ICICI Securities: Buy
Target price: Rs 284, Upside: 32%
Brokerage house ICICI Securities has maintained a buy call on the stock with a target price of Rs 284 per share, which translates into an upside of 32% on Wednesday’s closing price of Rs 215. The brokerage was of the view that the growth and margin targets set by the company’s management are realistic. “Like FY22, we expect a strong recovery in FY23 and FY24, led by an improvement in ARR once economic activity normalizes, improved occupancies, cost rationalization efforts, an increase in F&B income as banqueting/conferences normalizes and higher income from management contracts,” it said. Key risks to the upside are fresh Covid cases, which can impact demand and rise in costs denting margins.
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