Tourism Stocks in India: Emerging Trends From Taj Mahal to BSE

Why Tourism Stocks in India Are the Talk of the Town? The recent report by Foundit, formerly Monster APAC & ME, a prominent job search platform, revealed a staggering 44% year-on-year surge in India’s travel and tourism job market. This growth is not limited to major cities but extends to tier-2 cities as well. Cities like Jaipur (34%), Ahmedabad (33%), and Chandigarh (33%) experienced significant spikes in job postings between August 2022 and August 2023. Baroda (25%) and Coimbatore (25%) also contributed to this remarkable trend.

This boom in the job market is closely tied to the rise of tier-2 cities as robust talent hubs. Their swift infrastructural expansion, coupled with the availability of diverse skill sets and cost-effective operations, has made them attractive destinations for businesses in the travel and tourism sector.

Given this backdrop, it’s evident that the travel and tourism industry is poised for robust growth. In the wake of the industry’s remarkable performance, tourism stocks in India have become a subject of considerable interest among investors.

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Industrial Trend – Indian Tourism and Hospitality Sector

According to a news article from news18.com, the latest report from Foundit highlights the most sought-after job roles in the Travel & Tourism industry. These include Sales & Business Development, which commands a substantial 23% of the total demand, followed by Software and Electrical Engineers at 12%. Additionally, roles in Marketing & Communication make up 8% of the demand. Notably, positions for Chefs and Medical Representatives also hold a significant 5% share each in the overall demand.

The average minimum salaries range from Rs 288696/- to Rs 580234/- for freshers. Rs 5,29,516 – Rs 8,20,734 for intermediate professionals, Rs 8,70,833/- to Rs 14,11,556/- for mid senior roles and Rs 12,19,515 – Rs 18,55,291 for management professionals.

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Sector Trend

As per IBEF, India’s travel and tourism scene is buzzing with excitement. We’ve got something for everyone – cruises, adventures, medical getaways, wellness retreats, and more. The industry is a big player, chipping in around USD 178 billion to India’s economy, ranking 54th in the Travel and Tourism Development Index.

The sector is set to grow at a steady 6.7% annually, aiming for a whopping 9.2% of the GDP, which translates to an impressive USD 488 billion. In February 2023, foreign tourist arrivals spiked to 865,779, a jaw-dropping 259.4% jump from the previous year.

The government is also stepping up. They’ve set aside USD 30.25 million in the 2023-24 budget to develop tourist circuits through the PRASHAD initiative. Since its start in January 2015, this project has given the green light to 37 ventures in 24 states, with an estimated spend of USD 146.4 million. They’ve already handed out USD 91.6 million.

Bigger things are on the horizon for India’s travel market. We’re looking at a forecasted USD 125 billion by FY27, up from an estimated USD 75 billion in FY20. OYO, a major player in the hospitality business, sees a whopping USD 26 billion opportunity here by 2030. Cruise tourism is making waves too. The government predicts a market of 1.2 million cruise visitors by 2030-31. With India’s long coastline of 7,500 km, there’s huge potential. The Ministry of Tourism is putting in USD 27.7 million for projects to spruce up Cruise Terminals and related facilities at major ports.

As the years roll on, Indian tourism and hospitality are set to rake in USD 50.9 billion from visitor exports by 2028, up from USD 28.9 billion in 2018. That’s the exciting journey ahead for travel industry and the Tourism Stocks in India!

Tourism Stocks in India

The Tourism Stocks in India are: Indian Hotels Co Ltd, IRCTC, Easy Trip Planners Ltd, Thomas Cook (India) Ltd, TajGVK Hotels & Resorts Ltd, Interglobe Aviation Ltd, Lemon Tree Hotels Ltd, India Tourism Development Corporation Ltd, EIH Ltd, TAAL Enterprises Ltd, Wonderla Holidays Ltd and Westlife Foodworld Ltd. Also read: Praj Industries Fundamental Analysis- Profitability And Beyond

Let’s Explore some of the Tourism Stocks in India

Thomas Cook (India) Ltd

Let’s kick off our exploration of Tourism Stocks in India with Thomas Cook (India) Ltd. This company falls under the mid-cap category, boasting a market capitalization of ₹5,516 Crores. The company has low profitability ratios as ROCE stands at 5.23 % and ROE stands at 0.39 %. The company maintains a Price to Earnings Ratio (P/E) of 64.57. This is a bit higher compared to the industry average of 61.95. Furthermore, the company reports an Earnings Per Share (EPS) of 1.81 TTM (Trailing Twelve Months). The Debt to Equity Ratio is a commendable 0.23, indicating a healthy financial structure. For the current year, Thomas Cook (India) is offering a dividend of Rs 0.40, with a yield of 0.34%. Lastly, in terms of ownership, the company sees strong support from its promoters, holding a significant 72.34%.

Financials of the company are not that impressive so what attracts about it.

3-Year Performance:

-Profit Growth Compounded: 231%
-CAGR for Stock Price Growth: 61%
-Growth in Compound Sales: -10%
-Equity Return: -9%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 155%
-CAGR for Stock Price: 61%
-Growth in Compound Sales: 132%
-Equity Return: 0%

The growth rate of Thomas Cook (India) Ltd suggests that there is a potential for growth in coming years.

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Easy Trip Planners Ltd

Easy Trip Planners(EMT) is the fastest growing, 2nd largest and only profitable company in the online travel portal in India. It is mid-cap company with a Market Cap of ₹ 7,247 Cr. In terms of Profitability, the ratios are robust as ROCE stands at 54.6 % and ROE stands at 46.9 % which is a good sign for future performance as higher values are always desirable. Price to Earnings (P/E) ratio of the company stands at 52.1. It is lower than its sector PE ratio of 67.96. Furthermore, the company reports an Earnings Per Share (EPS) of 0.81 TTM (Trailing Twelve Months). Debt to Equity Ratio of 0.22 is less than 1 and healthy. The current year dividend for Easy Trip Planners is Rs 0 and the yield is 0 %. Additionally, the company enjoys strong promoter holding, with a significant 71.30%.

3-Year Performance:

-Profit Growth Compounded: 64%
-CAGR for Stock Price Growth: %
-Growth in Compound Sales: 45%
-Equity Return: 49%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 11%
-CAGR for Stock Price: -18%
-Growth in Compound Sales: 57%
-Equity Return: 47%

In summary, Easy Trip Planners showcases impressive figures across various parameters.

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Lemon Tree Hotels Ltd

Moving on to the next entry in our list of Tourism Stocks in India: Lemon Tree Hotels Ltd. This company proudly holds the title of the largest mid-priced and the third largest overall hotel chain in India. A mid-cap company with a Market Cap of ₹ 9,261 Cr maintains decent profitability ratios as ROCE stands at 10.1 % and ROE stands at 13.6 %. Price to Earnings(P/E) ratio is 74.6 which is lower than its sector PE ratio of 82.98. The company also reports an Earnings Per Share (EPS) of 1.57 Trailing Twelve Months (TTM), indicating a positive earnings trend.

The Debt to equity of 2.55 is high as it is greater than 1 which might be a reason to worry. The current year dividend for Lemon Tree Hotels is Rs 0 and the yield is 0 %. Promoter Share Holding decreased by 0.01% in the most recent quarter to 23%.

3-Year Performance:

-Profit Growth Compounded: 441%
-CAGR for Stock Price Growth: 61%
-Growth in Compound Sales: 9%
-Equity Return: -4%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 468%
-CAGR for Stock Price: 30%
-Growth in Compound Sales: 64%
-Equity Return: 14%

Overall, it showcases potential for growth and continued success in the market.

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India Tourism Development Corporation Ltd

Established in October 1966 as a Government of India undertaking, this company operates a wide range of services for tourists. This includes managing hotels and restaurants, offering transportation facilities, producing and distributing tourist literature, and even providing entertainment and duty-free shopping options. As a small-cap entity, it boasts a Market Cap of ₹3,257 Crores. In terms of profitability, the company impresses with a ROCE of 28.0 % and ROE of 18.6 %. The Price to Earning Ratio of 49.2 is lower than its sector PE ratio of 82.26. Additionally, the TTM EPS stands at a robust 7.70 Rs per share, indicating positive, growing, and healthy earnings.

The company is debt free which means that its assets are financed mainly through equity. In terms of dividends, for the current year, the company offers Rs 2.20 per share, resulting in a yield of 0.58%. This, coupled with a high promoter holding of 87.03%, demonstrates strong confidence from insiders.

3-Year Performance:

-Profit Growth Compounded: 52%
-CAGR for Stock Price Growth: 17%
-Growth in Compound Sales: 10%
-Equity Return: 3%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 298%
-CAGR for Stock Price: 6%
-Growth in Compound Sales: 40%
-Equity Return: 19%

In conclusion, this Government of India undertaking, plays a vital role in the tourism sector.

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EIH Ltd

EIH specializes in the ownership and management of premium luxury hotels and cruisers, featuring renowned brands like Oberoi, Trident, and Maidens. As a mid-cap company, it commands a Market Cap of ₹14,546 Crores. In terms of profitability, the company impresses with a ROCE of 15.6 % and ROE of 11.4 %. A Stock P/E of 35.9 is lower than its sector PE ratio of 82.26. Additionally, the TTM EPS stands at Rs 5.68 per share which is hopefully growing. EIH has a D/E ratio of 0.02 which means that the company has low proportion of debt in its capital. The current year dividend for EIH is Rs 1.10 and the yield is 0.47 %. Promoter Share Holding stayed the same in the most recent quarter at 32.85%.

3-Year Performance:

-Profit Growth Compounded: 34%
-CAGR for Stock Price Growth: 41%
-Growth in Compound Sales: 8%
-Equity Return: -2%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 820%
-CAGR for Stock Price: 20%
-Growth in Compound Sales: 65%
-Equity Return: 11%

In summary, EIH stands as a notable player in the luxury hospitality industry.

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BOTTOM LINE

Exploring the dynamic landscape of tourism stocks in India reveals a diverse array of opportunities. From stalwarts like Thomas Cook (India) Ltd. showcasing steady growth to Easy Trip Planners’ impressive profitability ratios, each company brings its unique strengths to the table. Ultimately, the tourism sector in India presents a spectrum of opportunities, each with its own set of strengths and potential for growth.

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.