'Indian Hotels looks better than the others'
ET Now caught up with Pankaj Pandey, Head of Research, ICICI Direct, to get his view on the performance of hotels stocks.
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| ET Now caught up with Pankaj Pandey, Head of Research, ICICI Direct, to get his view on the performance of hotels stocks.
We are seeing some traction in hotel stocks on today’s trade. Hotel Leela and EIH Hotels are in green. But why do you have a specific buy call on Indian Hotels?
We like other hotels also including Hotel Leela and Royal Orchid but among the frontlines, Indian Hotels is one of the best places. What we have seen is that in the last quarter, the occupancy levels have jumped to about 70 per cent odd, which is up about 10% from a quarter-over-quarter basis. We were expecting about 5 per cent jump, so in that sense, that is on a positive surprise.
ARRs is also improving about 29 per cent to about 9,500, which again is a very positive sign because we are expecting occupancy levels to improve further, whereas the ARRs could be more or less at similar levels and in that sense, this stock is adding about 3,000 hotels over the next one or two years, which again would provide boost to the earnings and this stock is available at 9 times FY12 EV by EBITDA basis, which in terms of from a hotel perspective are quite attractive.
We are seeing some traction in hotel stocks on today’s trade. Hotel Leela and EIH Hotels are in green. But why do you have a specific buy call on Indian Hotels?
We like other hotels also including Hotel Leela and Royal Orchid but among the frontlines, Indian Hotels is one of the best places. What we have seen is that in the last quarter, the occupancy levels have jumped to about 70 per cent odd, which is up about 10% from a quarter-over-quarter basis. We were expecting about 5 per cent jump, so in that sense, that is on a positive surprise.
ARRs is also improving about 29 per cent to about 9,500, which again is a very positive sign because we are expecting occupancy levels to improve further, whereas the ARRs could be more or less at similar levels and in that sense, this stock is adding about 3,000 hotels over the next one or two years, which again would provide boost to the earnings and this stock is available at 9 times FY12 EV by EBITDA basis, which in terms of from a hotel perspective are quite attractive.
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