Vijay Kedia Portfolio: Mahindra Holidays & Resorts India’s share price has risen nearly 55 per cent in 2021, despite a second wave of Covid-19 hitting the hospitality industry in the first half of 2021. In year-over-year (YTD) terms, the stock has risen. ₹from 215 ₹330 per share level – registered a growth of about 55 percent over the period. Shares of Mahindra Holidays & Resorts India have managed to climb nearly 85 per cent in the past one year, despite the huge impact on the hospitality sector due to the Covid pandemic.
According to market experts, such rally in this Vijay Kedia stock is due to the unique business model of the hospitality company of Mahindra Group which helped it sustain against the ravages of the pandemic. He added that the hospitality stock may move north as unlocked activities pick up pace.
Speaking on the reasons behind Vijay Kedia Portfolio stock giving such strong returns to its shareholders; Avinash Gorakshakar, Head of Research, Profitmart Securities, said, “In the hotel business, one’s income starts when his inventory is sold. But, in the case of Mahindra Holidays & Resorts India, there is some difference. They designed their business model. Thus, its income from membership fees and annual maintenance charges from existing members helps it to stay on break-even. Hence, their business model helps them to keep debt under control and this in their quarterly numbers. In fact, the company management has said that its second quarter numbers will be stronger as they plan to increase their subscription count from around 2 lakh to 3 lakh in the next one year. It plans to add around 25,000 new members.
Avinash Gorakshakar said that Mahindra Holidays & Resorts India has zero unsold inventory as its entire inventory has been sold to its members. In addition, when its members come to stay, the hospitality company of the Mahindra Group earns money from the food and drinks consumed by the member during their stay. Hence, this is a profitable business model for Vijay Kedia Portfolio Company and its share price is likely to continue to rise further as unlocked activities rapidly intensify.
Recommendation for investors to buy this share of Mahindra Group; Sumeet Bagadiya, Executive Director, Choice Broking said, “One can buy this Vijay Kedia counter at the current market price for an immediate short-term target. ₹from 360 ₹maintain stop loss at 375 ₹315.”
Vijay Kedia’s stake in Mahindra Holidays & Resorts India
As per Mahindra Holidays & Resorts India’s April to June 2021 shareholding pattern, Vijay Kedia holds 13.60 lakh shares, which is around 1.02 per cent stake in the company.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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