Hotel Shares: Shares of hotel companies were in high demand in intraday on Wednesday, November 30 and registered a gain of up to 10 per cent on the BSE. In fact, these stocks are seeing a boom in anticipation of strong earnings growth ahead. Shares of Taj GVK Hotels & Resorts, Lemon Tree Hotels and Oriental Hotels gained in the range of 7-10 per cent. Apart from this, the shares of Indian Hotels Company, EIH Hotel, and Mahindra Holidays & Resorts India also gained momentum.
Shares closed up by 10 percent
At the end of the session, TajGVK Hotels gained 9.58 per cent to close at Rs 22.95. At the same time, Lemon Tree Hotels Ltd. strengthened by 8.68 percent to Rs.101.40 and Oriental Hotels Ltd. 7.02 per cent to close at Rs 86.90.
Shares of Indian Hotels closed up 1.50 per cent at Rs 320.95, EIH Ltd up 2.90 per cent at Rs 179 and Mahindra Holidays up 5.83 per cent at Rs 290.45.
Revenue increased in September quarter
Even though the July-September quarter for the tourism sector is generally weak due to the monsoon, revenues were 23 per cent higher than pre-Covid levels as against the earlier forecast of 17 per cent growth. However, there was a slight decline in revenue on a quarterly basis.
Earnings are expected to increase due to these reasons
In its hotel sector update, Motilal Oswal Financial Services said, "Occupancy rate is expected to improve from pre-pandemic levels due to wedding season, G20 summit meetings and arrival of foreign travelers." Along with this, the increase in average room rent is expected to continue.
ICICI Securities expects the hotel sector to strengthen over the next 12 months as the economy fully opens up. The brokerage firm expects supply to increase with the launch of new hotel projects due to rise in land and input costs, benefiting existing players. It is possible Analysts said hotel companies have kept costs in check. This will lead to a good margin expansion going forward.
Disclaimer: The views and investment advice expressed here are the personal views and opinions of investment experts. StockPro advises users to consult certified experts before making any investment decisions.
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