Two stocks of hotels after the government’s decision to reopen the borders
On September 23, India’s benchmark stock indexes set a new all-time high. The index climbed 1.63% or 958.03 points to 59,885.36. NSE also jumped 1.57% and rested at 17,822.95. Investors hailed the US Federal Reserve’s decision to keep interest rates unchanged. The Federal Reserve has indicated that it will cut its monthly bond buying program before the end of the year. Another good news is that India’s FDI inflow of $ 27.37 billion in the first four months of FY2022 is 62% higher than in the corresponding period of FY2021. The automotive industry dominated the inflow of FDI with a share of 23%. It was followed by the software and hardware sector with 18% and the service sector with a 10% share. While browsing the stock market, we came across two stocks that offer good momentum in the short and medium term.
1. TAJ GVK Hotels and Resorts Ltd (NS 🙂
With the gradual reopening of the economy and the acceleration of the pace of vaccinations, hotel stocks are in the spotlight. After remaining gloomy for nearly two months, hotel stocks have returned to a new bullish movement. Taj GVK Hotels & Resorts is one of our favorite stocks within the hotel space. The government plans to reopen India’s borders to foreign tourists amid declining Covid-19 cases. An official announcement in this regard is expected in the near future. Business travel is set to make a comeback. The easing of restrictions on travel and tourism bodes well for the hospitality industry. Major products / revenue segments of Taj GVK include revenue from rooms, restaurants and other services. The company has focused on growing revenues from verticals such as home entertainment and weddings, simultaneously optimizing costs. Selected hotel stocks in the industry have seen huge bookings lately. The growth in bookings is mainly due to themes such as ‘revenge tourism’ and ‘after staycation’.
For the quarter ended June 30, 2021, Taj GVK reported total consolidated income of Rs 24.97 crore, up 656.7% from total income of Rs 3.30 crore in the first quarter of the fiscal year 2021. The company’s net loss narrowed to Rs 8.97 crore in the first quarter of fiscal 2022, compared to a net loss of Rs 16.89 crore in the first quarter of fiscal 2021. The ratio of The company’s debt load is 0.35, which is a good sign. Promoter stake of 74.99% was unchanged in the June 2021 quarter. Key technical indicators such as RSI, MACD and EMA 20 days / 50 days / 100 days signal a “buy” on the stock.
2. International Travel House Ltd (BO 🙂
The second company in the theme of sustained economic recovery is a small cap company – International Travel House Limited. The company specializes in travel and tourism related business and sells airline tickets, hotel reservations, travelers checks and tour packages. Promoters’ ownership remained unchanged at 61.69% in the June 2021 quarter. The company’s price-to-book ratio of 0.7 is relatively low in the hospitality industry. In the first quarter of fiscal 2022, ITHL’s total operating income increased 29.3% to Rs 11.45 crore from Rs 8.86 crore in the corresponding quarter of fiscal year 2021. During the quarter, the company’s net loss decreased to Rs 7.89 crore from a net loss of Rs 15.97 crore in the first quarter of fiscal 2021. Based on key metrics of ‘technical analysis such as RSI, MACD, EMA 20 days / 50 days / 100 days, the stock has a buy suggestion.