What could be a better time to explore the top hotel stocks in India? If you’re seeking better investment opportunities, it’s time to turn your focus to this booming sector. Why am I hyping it up so much? I have strong reasons to back my enthusiasm.
India’s tourism and hospitality industry is growing at an incredible pace. According to IBEF, the sector is expected to generate over US$ 59 billion in revenue by 2028. Foreign Tourist Arrivals (FTAs) are forecasted to hit 30.5 million by the same year.
As someone who loves both travelling and investing, I can’t ignore this sector’s potential. And as an equity research analyst, I feel it’s my responsibility to share these insights with investors aiming to build long-term wealth. Let’s explore the top Hotel Stocks In India.
Top Hotel Stocks In India- A Sector Poised for Growth
Image Source: IBEF
India’s travel and tourism sector is a major contributor to the economy. In 2022, it added US$199.6 billion to the GDP, as per the World Travel and Tourism Council (WTTC). The industry is growing fast, with an expected annual growth rate of 7.1%.
The travel market in India is also on the rise. According to estimates, it could grow from US$75 billion in FY20 to US$125 billion by FY27. In the 2024 interim Budget, the government allocated Rs. 2,449.62 crore (US$ 294.8 million) to the tourism sector. This was a 44.7% increase compared to the previous year.
Foreign investments are flowing into this industry too. Between April 2000 and March 2024, the Hotel and Tourism sector received US$ 17.2 billion in FDI. This accounts for 2.54% of all FDI inflows into India.
By 2028, international tourist arrivals are expected to reach 30.5 million, showcasing the sector’s immense potential. With such strong growth trends, India’s travel and tourism industry is a promising area for investment and development. (Source: IBEF)
Explore the best Tourism Stocks in India: Emerging Trends From Taj Mahal to BSE
Top Hotel Stocks In India
Let’s discuss the 3 Top Hotel Stocks in India. These luxury and premium hotel chains across the country are set to capitalize and contribute to the growth story of the hospitality sector in India. EIH Ltd, Indian Hotels Co Ltd, and Lemon Tree Hotels Ltd.
Let’s explore a few facts about these opulent and regal hotel chains in India.
EIH Ltd
Current Market Price: ₹410 | 52-Week High: ₹502 | 52-Week Low: ₹222
EIH Ltd is the flagship company of the Oberoi Group and one of the largest hotel chains in India. The company operates luxury hotels, and restaurants, manages contracts, and offers travel and tour services. They operate under two well-known brands: Oberoi and Trident.
Founded in 1949, EIH Ltd is considered a large-cap company with a market capitalization of Rs 25,661.82 crore. The P/E ratio of EIH Ltd stands at 38.63, while the P/B ratio is 6.28.
For the quarter ending September 30, 2024, the company reported a consolidated total income of Rs 622.58 crore.
-This is an 11.19% increase compared to the previous quarter’s income of Rs 559.91 crore.
-It is also 12.69% higher than Rs 552.49 crore in the same quarter last year.
-The net profit after tax for this latest quarter is Rs 124.77 crore.
Analyst Estimates: The median target price for the stock is Rs 433.5 over the next 12 months. Analysts have provided a high estimate of Rs 467 and a low estimate of Rs 400. (Source: The Economic Times)
Indian Hotels Co Ltd
Current Market Price: ₹837 | 52-Week High: ₹842 | 52-Week Low: ₹416
Indian Hotels Company Ltd (IHCL), promoted by Tata Sons Private Limited, is a well-known name in the hotel and resort industry. The company owns and manages a wide range of hotels, palaces, and resorts across India and globally. The Taj Group of Hotels has 235 hotels with 28,107 rooms in its inventory. IHCL traces its roots back to 1902 and opened its first hotel, The Taj Mahal Palace & Tower in Mumbai, in 1903.
The company is classified as a large-cap company with a market capitalization of Rs 1,19,169.75 crore. The P/E ratio stands at 71.24, while the P/B ratio is 11.77.
For the quarter ending September 30, 2024, the company reported:
–Consolidated total income of Rs 1,890.22 crore, which is 18.41% higher than the previous quarter’s Rs 1,596.27 crore.
-It is also 27.64% higher than Rs 1,480.87 crore in the same quarter last year.
-The company reported a net profit of Rs 573.21 crore for the quarter.
Analyst Estimates: The median target price for IHCL over the next 12 months is Rs 729.81, based on analysis from 21 analysts. High estimate: Rs 900 | Low estimate: Rs 405. (Source: The Economic Times)
Read the complete analysis here: Indian Hotels Fundamental Analysis: Is the 25% Discount Coupon Worth it?
Lemon Tree Hotels Ltd
Current Market Price: ₹141 | 52-Week High: ₹158 | 52-Week Low: ₹111
Lemon Tree Hotels primarily focuses on the midscale hotel segment catering to both business and leisure travelers. It offers a mix of affordability, convenience, and comfort for travellers seeking value. Additionally, the company operates Red Fox by Lemon Tree Hotels, which caters to the economy hotel segment. Currently, Lemon Tree Hotels operates 56 hotels across 33 cities with approximately 5,525 rooms.
Founded in 1992, Lemon Tree Hotels Ltd is classified as a mid-cap company with a market capitalization of Rs 11,170.68 crore. The P/E ratio of the company stands at 73.57, while its P/B ratio is 7.22.
For the quarter ending September 30, 2024, Lemon Tree Hotels reported:
-Consolidated total income of Rs 284.84 crore, marking a 5.16% increase compared to Rs 270.86 crore in the previous quarter.
-It is also a 23.78% growth from Rs 230.12 crore in the same quarter last year.
-The company reported a net profit after tax of Rs 34.88 crore for the latest quarter.
The median target price for Lemon Tree Hotels over the next 12 months is Rs 151.38, based on the estimates of 16 analysts. The highest estimated price is Rs 175, while the lowest is Rs 118. (Source: Moneycontrol)
Bottom Line
Summing up, India is a vast and growing market for travel and tourism. According to the World Economic Forum, India ranked 34th in the Travel & Tourism Competitiveness Report 2019 and secured the 39th position in the Travel and Tourism Development Index (TTDI) in 2024.
In March 2024, Indian Hotels Company Ltd (IHCL) announced plans to recruit 2,000 to 2,500 employees during the fiscal year 2025. Additionally, the government is implementing a national strategy and roadmap for rural tourism development. The hospitality and tourism sector is well-positioned for long-term growth, making it an attractive option for investors. With the growing demand for hotels and travel infrastructure, now is an opportune time to explore this sector.
In this blog, we’ve highlighted the top three hotel stocks in India you can research further. These stocks present strong growth potential as they stand to benefit from the booming hospitality market and tourism trends across the country. Now might be the ideal moment to add them to your portfolio and align your investments with India’s expanding tourism and hospitality sector.
That’s all for today’s post. Hope you get some valuable insights from here.
Happy reading!
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. The contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a while. The post does not consist of any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfil their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
