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Rakesh Jhunjhunwala Portfolio: Do you Own Tata Stock? Analysts Project Up to 24% Returns.



The hospitality industry was among those most severely impacted by COVID-19, according to Rakesh Jhunjhunwala Portfolio. Indeed, difficult times don't continue forever, though. The portfolio of renowned investor Rakesh Jhunjhunwaala includes Indian Hotels Company (IHCL), which has outperformed the Nifty50 benchmark so far this year. In 2022, the stock of the Tata Group company increased by 23%, whereas the benchmark Nifty index fell by 8% during the same time.


Indian Hotels Company Ltd. (IHCL), a forerunner in the luxury hotel industry, is controlled by the Tata group. The organization founded the renowned hotel known as The Taj Mahal Palace in 1903. More than 215 hotels, villas, and restaurants are now part of the company, ranging from modestly priced mid-size hotels to lavish multi-acre mansions. The company has 80 locations operating in 12 countries and four continents.


Rakesh Jhunjhunwala and Rekha Jhunjhunwala hold 1.57 crore and 1.42 crore shares, respectively, in IHCL, according to current shareholding patterns. As a result, the pair owns a total of 2.21 percent of the business. Between January and March 2022, both have expanded the size of their corporate ownership.

The company has released results for the fourth quarter and the fiscal year 2021–2022, reporting a profitable quarter and a significant decrease in annual losses. The company reported operating sales of Rs 872 crore in Q4 compared to Rs 615 crore in the same quarter the year prior. In comparison to a deficit of Rs 98 crore in the fourth quarter of the fiscal year 2020–21, it has declared a profit of Rs 72 crore. It recorded annual revenues of Rs 3056 crore in fiscal 2021–22, an increase from Rs 1575 crore in fiscal 2020–21.

Should Investors Book Profit, Buy, or Hold IHCL Shares?

Given that occupancy has reached pre-covid levels and that the average room rent (ARR) would increase by mid-2022, analysts at Motilal Oswal anticipate a 24 percent increase in the IHCL shares. The brokerage note predicts that emerging companies including Ginger, Cumin, Ama, and Chambers would all enjoy an increase in revenue.


The expansion of the hotel division of the Tata Group will be aided by the new business of IHCL, claims Motilal Oswal. The management is putting more emphasis on its high-margin emerging companies, such as Ginger, Cummins, Chambers, and Ama.

Given as a goal is $278


Like in FY22, Motilal Oswal analysts predict a strong recovery in FY23 and FY24. Economic activity is resuming its previous pattern. Business travelers have helped to increase occupancy. A buy rating objective of Rs 278 has been set by the brokerage for the company, which is 20% more expensive than the present price. According to IIFL Securities Vice President (Research) Anuj Gupta, it is the sole correction or profit booking. It is possible to notice further that the trend and cycle of the shares of Indian Hotels Company are favorable. For novice investors, the Rs 210–215 level may be a decent purchasing area. At these prices, an investor can purchase firm shares while keeping a stop loss of Rs 174 in place. The short-term outlook for the company's shares can reach a level of Rs. 260–275. Additionally, if the company finishes above Rs 275, its shares might rise to Rs 320. He claims that the immediate support for the hotel stock is between Rs 200 and Rs 205. At the same time, the stock has a high level of support at Rs 174.


Anand Rathi analysts wrote: "At its capital market day, IHCL announced Ahvaan 2025, under which it aims to develop a cohort of 300 hotels (in FY22, it had 20,581 rooms at 175 operational hotels), clocking 33.2% EBITDA margins (in FY22, 13.2%), and generate 35% of EBITDA from new businesses and management fees by FY26 (currently 22%). We continue to believe that due to its dominance in the Indian hotel industry, exceptional brand equity, and well-diversified portfolio across business areas and pricing points, hoteliers can be expected to outperform competitors. We maintain our Buy recommendation on the company with the new target price of Rs 260 (formerly Rs 254, valued at 22x consolidated FY24e EBITDA).


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