Buy EIH, target price Rs 101: ICICI Direct

ICICI Direct has given a buy rating to EIH with a target price of Rs 101. The share price moved up by 2.12 per cent from its previous close of Rs 91.80. The stock’s last traded price is Rs 93.75.

EIH Ltd., incorporated in the year 1949, is a Mid Cap company (having a market cap of Rs 5338.46 Crore) operating in Tourism & Hospitality sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 29.74 Crore, down 92.75 % from last quarter Sales of Rs 410.44 Crore and down 91.27 % from last year same quarter Sales of Rs 340.58 Crore. The Company reported net profit after tax of Rs -130.15 Crore in latest quarter.


Investment Rationale
The stock has registered a resolute breakout above the bullish Flag pattern on Thursday signalling continuation of the up trend and offers fresh entry opportunity.

The stock earlier during mid of Aug’20 has generated a breakout above the supply line joining highs of April (Rs 82) and June (Rs 81) as can be seen in the adjacent chart signalling reversal of the corrective trend and resumption of up move.Structurally the share price during the current up move has generated a faster retracement of the last falling segment as 38 sessions decline (Rs 81 to 59) was completely retraced in just 14 sessions.

A faster retracement of the last falling segment in less than half the time interval signal strength and positive bias.The daily 14 periods RSI is in up trend and is seen rebounding taking support at its nine periods average thus supports the positive bias in the stock.

Based on the above technical observations we expect the stock to head towards Rs 101 levels in the coming sessions as it is the 161.8% external retracement of the previous breather (Rs 96 to 88).