Indian Hotels goes "Wah Taj"

Indian Hotels has been in the spotlight since yesterday when it hit a new 52-week high at Rs.129 and today too, it hit another new high at Rs.133.

The stock is being accumulated by discerning investors as the company seems to be well entrenched on a turnaround path. It narrowed its FY16 net loss to Rs.60 crore from Rs.378 crore in FY15 on a 10% rise in net sales at Rs.4591 crore. And in Q4FY16, it posted a standalone net profit of Rs.88 crore v/s loss of Rs.199 crore in previous Q4.

The hotel sector is doing well and Indian Hotels is making itself leaner, hiving off hotels which are not giving returns but eating away profits. Taj Boston is up for sale and it has set the base price at Rs.825 or $125 million. The company had acquired Taj Boston hotel in 2006 from Millennium Partners for $170 million. It was then called Ritz-Carlton, Boston Hotel. This sale is expected to boost its numbers in the coming months. The company has also changed its marketing stance, giving more accent to online booking and this is expected to have positive impact.

Based on the positive prospects of the company, Morgan Stanley put out a report, stating it has upgraded the stock to overweight and increased the target price to Rs.160. Morgan Stanley raised FY17 and FY18 EBITDA by 9% each and expects its occupancy levels to grow by 600 bps by FY18.