Hotel stocks on Thursday’s session were trading in the green zone in light of the ICC Men’s World Cup, which will be played in 10 stadiums around the country from October 5 to November 19. Hotels are projected to have a 100% occupancy rate in October and November 2023, according to analysts, and demand is expected to also rise.
Shares of Lemon Tree Hotels, Indian Hotels Company, and Chalet Hotels gained over 1% to 2% on Thursday. Chalet Hotels share price touched 52-week high of ₹596.90 apiece on BSE, and Indian Hotels share price was hovering around its 52-week levels in today’s session.
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In a recent analysis, domestic brokerage Emkay Global Financial Services noted that the outlook for the Indian hospitality sector is positive for the next few years, driven by demand growth that is outperforming supply growth. According to the brokerage, India’s hotel industry would have an extended period of high occupancy and increased RevPAR, or revenue per available room.
The brokerage house’s upbeat outlook aided to the overall positive sentiment of hotel stocks.
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Further, the brokerage stated that increasing per-capita income, India’s improving share of international visitor arrivals (ITAs), and office space expectations for a 7.5% CAGR in key cities over Q3CY22-CY25 should all support demand.
“We initiate coverage on Indian Hotels Company with a ‘buy’ recommendation, on Lemon Tree Hotels also with a ‘buy’, and on Chalet Hotels with a ‘hold’ amid limited upside. All three players have a strong pipeline of room additions, with room-count CAGR of 10-13% over FY23-26E. All three players will gain from further margin improvement and deleveraging by FY26, given increase in revenue and focus on cost reduction,” said Emkay in its report.
According to technical analysts, the broader trend for hotel stocks look positive as many of the stocks from this sector have witnessed a good price volume action.
“Indian Hotel has a good support base around ₹400 while stocks such as Lemon Tree and Chalet too have been forming higher top higher bottom structure with supports around ₹110 and ₹535, respectively. Positional traders can continue to trade with a positive bias till the mentioned supports are intact,” advised Ruchit Jain, Lead Research Analyst at 5paisa.
Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One, explained that Lemon Tree share price saw a gap up opening but no major traction was witnessed after initial gains.
Overall prices are in uptrend and closing beyond ₹120 would trigger strong upmove where ₹125 can be seen as resistance, and immediate support is at ₹115, according to Bhosale.
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Indian Hotels share price in the last couple of weeks have traded in a range of ₹400 – 415 , currently prices are trading above the higher range confirming a range breakout. In the near term prices can extend move towards ₹435 with ₹400 remains a strong support.
According to Bhosale, Chalet Hotels share price hit fresh new high in today’s session, and they continue to have a positive bias on this stock. However one should consider buy on dip with ₹580 seen as strong support followed by ₹565. The upmove can extend in near term towards ₹625.
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Updated: 05 Oct 2023, 01:48 PM IST