Why Jefferies sees this Indian multibagger stock as a ‘strong investment story’

Earlier this month, Jefferies began coverage Indian Hotels Share And in a recent report it summarized cyclical recovery, rising asset-light mix, Ginger Hotels and valuations, along with our thoughts on some of the concerns raised about sustainability of top investor feedback and occupancy.

Brokerage retains its buy rating multibagger stock with a target price of 325 per share. Indian Hotels shares have delivered multibagger returns of over 102% in a year, while the stock is up nearly 50% in 2022 (YTD) so far.

“With the strong run-up in Indian hotels in the last 6 months/1yr, the debate is whether it is in full recovery. We believe that IHCL can continue to trade at a premium, as this journey is playing a strong proxy for recovery, as well as its brand equity, leadership position (multiple segments/price points) and strong promoter group, “The note stated.

In addition, its strong hotel pipeline should help deliver a substantial portion of the industry’s growth to its brands. New initiatives, a strong focus on building an “asset-rights” model and maintaining a strong balance sheet bode well for the long term, Jefferies added.

“With the scale of expansion, the company is focusing on the property-lighting strategy by increasing the hotel mix through management contracts (50: 50% mix). For IHCL, management contracts are taken on the basis of meeting standards. and no quality compromise is required; Hotels under management contracts are targeted to operate on the same lines as in the case of owned/leased hotels. Also, signups under management contracts In the new set of Rs.

Indian Hotels is one of the leading Indian hospitality companies, and has a diverse business portfolio in hotels, resorts, jungle safaris, palaces, spas and in-flight catering services.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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