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Rakesh Jhunjhunwala portfolio: Anand Rathi bullish on this hotel stock, raises target price

Indian Hotels shares were trading over 2% higher

1 min read . Updated: 25 Oct 2021, 12:56 PM IST Livemint

The brokerage has maintained its Buy rating on the stock and raised target price on the back of strong performance across all parameters in Q2

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Aided by strong recovery in the leisure segment, Indian Hotels’ results for the second quarter came way ahead of street estimates, as per brokerage house Anand Rathi. The company's management has said that the recovery has persisted in October and it expects H2 FY22 to be far better.

With its dominance in the Indian hotels sector, superlative brand equity and well-diversified portfolio across business segments and price-points, the brokerage firm believes that Indian Hotels is well placed to capitalise on a recovery in the economy.

“The focus on scaling up the high-margin new-age businesses is a key positive. This, along with cost savings and operating leverage, will drive profitability and returns over FY22-24," it said in a note.

Anand Rathi has maintained its ‘Buy’ rating on the stock on strong performance across all parameters in the second quarter, with a revised sum-of-parts target price of ₹237 per share (earlier ₹175). Though, a key risk could be a slow-down in the economy which would curtail demand.

Tata group hospitality firm Indian Hotels reported narrowing of its consolidated net loss at ₹130.9 crore in the second quarter ended September 30. Its consolidated sales (now over 70% of pre-Covid times) was boosted by leisure travel, recovery in business travel, uptick in weddings and corporate events.

The company plans to raise funds through a rights issue and a QIP. This and internal cash flows will be used to repay debt, for consolidation (business-model simplification) and drive expansion/renovations, Anand Rathi's note added.

As per BSE shareholding pattern of Indian Hotels, Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 1,25,00,000 shares or 1.05% stake in the company each. Together, they hold 2.10% stake as of September 2021.

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