Buy Oriental Hotels, target price Rs 80: ICICI Direct

ICICI Direct has buy call on Oriental Hotels with a target price of Rs 80. The current market price of Oriental Hotels is Rs 63.55. Time period given by analyst is one year when Oriental Hotels Ltd. price can reach defined target.

Oriental Hotels Ltd., incorporated in the year 1970, is a Small Cap company (having a market cap of Rs 1138.57 Crore) operating in Tourism & Hospitality sector.

Oriental Hotels Ltd. key Products/Revenue Segments include Income from Rooms, Restaurants & Other Services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 68.47 Crore, down -13.67 % from last quarter Total Income of Rs 79.31 Crore and up 26.31 % from last year same quarter Total Income of Rs 54.21 Crore. Company reported net profit after tax of Rs 1.38 Crore in latest quarter.

Investment Rationale
Oriental Hotel’s revenue for Q4FY22 declined 13% QoQ to Rs 66.1 crore due to lockdown during January 2022 on account of omicron. Margins were also lower by 800 bps QoQ to 17.5%. This led to a marginal PAT of Rs 4 lakh vs. Rs 9.2 crore reported in Q3. For the full year FY22, revenues grew 189% YoY to Rs 219.4 crore though it was still 34% lower than pre-pandemic levels. This minor blip in revenue is temporary as forward hotel booking data suggests strong buoyancy in demand with hotel booking for MarchMay crossing pre-pandemic levels led by wedding season, vacations and IPL matches. Further, with the opening of international borders for foreign tourists and resumption of corporate offices, the brokerage expects sharp traction in the revenues from H1FY23E onwards.

Promoter/FII Holdings
Promoters held 67.56 per cent stake in the company as of 31-Mar-2022, while FIIs owned 0.05 per cent, DIIs 7.36 per cent.