Indian Hotels shares hit 52-week high, what drove the rally?
₹458 on January 4. This uptrend followed a positive move by global brokerage firm Morgan Stanley, which raised the target for IHCL to ₹490 from ₹450. This adjustment implies a potential upside of 7 percent from the current market levels.
Over the last three months, IHCL's stock has experienced a notable surge of over 12 percent, outperforming the benchmark Sensex, which recorded a 10 percent increase during the same period. Also read: AMFI stock reshuffle: Jio Financial gets large-cap tag, Tata Tech moves to mid-cap; check stock movements in mutual fund Providing insight into the reasoning behind the upgraded target, analysts at Morgan Stanley expressed their expectation of sustained double-digit growth in average room rates for the October-December quarter (Q3FY4). "We see standalone occupancy ratios reaching one the highest levels for IHCL.
The ramp-up of Ginger Mumbai and trends in revenue per average room rent to be some of the key monitorables," the brokerage firm said. Previously, analysts from Kotak Institutional Equities had assigned an 'add' designation to IHCL, setting a target price of ₹460 per share. Also read: Multibagger small-cap stock under ₹100 hits record high after 300% rally in one year "The hospitality sector will continue to build on the record profitability of FY23 as new supply after Covid will come in at a moderated pace (back-ended CAGR of 6 percent over FY23-28), whereas room rates and occupancy will continue to benefit from a healthy domestic demand (9 percent CAGR) and improving influx of foreign tourists," Kotak Institutional said in its report.
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