Edelweiss recommends 'buy' on Mahindra Holidays & Resorts
Edelweiss initiates coverage on Mahindra Holidays & Resorts (MHRIL) with a `Buy' recommendation. MHRIL offers a differentiated product, with quality holiday services to leisure travellers with its unique vacation ownership (VO) model.
By ET Bureau |
MAHINDRA HOLIDAYS & RESORTS
RESEARCH: EDELWEISS
RATING: BUY
CMP: RS 350
Edelweiss initiates coverage on Mahindra Holidays & Resorts (MHRIL) with a `Buy' recommendation. MHRIL offers a differentiated product, with quality holiday services to leisure travellers with its unique vacation ownership (VO) model. The business model is to be self-sustainable with negligible debt and free cash flow of Rs 500 crore over FY10-12 E. With rising income levels, favourable demographics, growing urbanisation and better infrastructure, more Indians are ready to take holidays. The Indian timeshare industry posted a CAGR of 15% since 1998 and growth is to pick up in the future. With growing consumerism, MHRIL will benefit with an increasing population opting for VO-based holidays. At the current market price, MHRIL is trading at 18.8x our FY11E consolidated EPS of Rs 18.3 and 13.8x our FY12E consolidated EPS of Rs 24.9. On historical PEG (price earning growth) basis, the stock is trading at an attractive 0.4x. Edelweiss expects revenues and PAT to post CAGR of 33% and 38%, respectively, over FY09-12 E.
RESEARCH: EDELWEISS
RATING: BUY
CMP: RS 350
Edelweiss initiates coverage on Mahindra Holidays & Resorts (MHRIL) with a `Buy' recommendation. MHRIL offers a differentiated product, with quality holiday services to leisure travellers with its unique vacation ownership (VO) model. The business model is to be self-sustainable with negligible debt and free cash flow of Rs 500 crore over FY10-12 E. With rising income levels, favourable demographics, growing urbanisation and better infrastructure, more Indians are ready to take holidays. The Indian timeshare industry posted a CAGR of 15% since 1998 and growth is to pick up in the future. With growing consumerism, MHRIL will benefit with an increasing population opting for VO-based holidays. At the current market price, MHRIL is trading at 18.8x our FY11E consolidated EPS of Rs 18.3 and 13.8x our FY12E consolidated EPS of Rs 24.9. On historical PEG (price earning growth) basis, the stock is trading at an attractive 0.4x. Edelweiss expects revenues and PAT to post CAGR of 33% and 38%, respectively, over FY09-12 E.
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