Indian Hotels shares were on the rise on Wednesday after brokerage firm UBS said it expects continued strong recovery in the hospitality firm’s business as operations return to normal.
UBS has raised the target price on Indian Hotels shares by 38 percent to Rs 375 from Rs 270 per share earlier. This means the brokerage sees a further upside of 22 percent in the stock from Tuesday’s closing price of Rs 305.20 on BSE.
The hotel stock was trading 1.5 percent higher at Rs 309.90 on BSE at 11:28 am. It has given a return of more than 67 percent in 2022 (year-to-date) as against the benchmark Sensex, which has fallen half a percent during the period.
UBS is positive on Indian Hotels as it believes that long-haul destinations will see a steady recovery while short and mid-haul destinations shall recover strongly,
The brokerage also said that international inbound travel would likely pick up in support of leisure demand.
It also pointed out that the average daily room rate has increased 31 percent for the business segment and 43-56 percent for leisure/palaces.
Last month, Indian Hotels’ reported its best-ever quarterly results for the April to June 2022 period, with demand surging past pre-COVID-19 levels. The company's consolidated profit after tax (PAT came in the highest in the past 10 quarters at Rs 170 crore for the June quarter. It reported a loss of Rs 277 crore in the corresponding quarter last year.
The hospitality group's revenue surged by 249.45 percent to Rs 1,293 crore during the quarter under review, compared to Rs 370 crore in the year-ago period.
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