Do hotels and private banks remain good buys? Shibani Sircar Kurian answers
Shibani Sircar Kurian, Senior EVP and the head of equity research, Kotak Mahindra AMC, says “while in pockets, valuations have become expensive and therefore one should be mindful of valuations, structurally, in the hospitality sector as a whole, the trajectory of growth as well as better profitability should continue for the time being.”
Much of the rally and the positive has already played out when it comes to the hotel sector and the massive recovery that they have seen from the Covid lows is testimony to that. Is there merit in a) staying invested and b) buying afresh into any of these names?
Yes, a lot of the rally has happened because of the improvement that we have seen in terms of numbers.
But a couple of things structurally should play out for the sector going forward as well; one is that while leisure travel has picked up considerably leading to occupancy rates improving, the supply overall remains fairly constrained and therefore occupancy levels given that we are going into the festive season and then the holiday season should remain fairly elevated which should support numbers.
The second fact is that now we are starting to see business travel coming back in a big way which should again support occupancy as well as room rents.
