Moneycontrol
Apr 20, 2017 04:33 PM IST | Source: Moneycontrol.com

Buy Taj GVK Hotels; target of Rs195: ICICI Direct

ICICI Direct is bullish on Taj GVK Hotels has recommended buy rating on the stock with a target price of Rs 195 in its research report dated April 18, 2017.

Buy Taj GVK Hotels; target of Rs195: ICICI Direct

ICICI Direct's report on Taj GVK Hotels


Taj GVK Hotels (Taj) is expected to be a key beneficiary of a revival in the economic environment. We believe a slowing down of capacity addition coupled with a rise in spending by domestic travellers will drive occupancy levels over the next few years. Also, with improved tourism measures by the government, the sector may see a better growth trajectory and pricing in the next three to four years.


Outlook


Apart from improving demand we believe that opening of a new hotel near Mumbai International Airport will drive revenues (CAGR of 13.3% in FY16-19E) and EBITDA (CAGR of 15.0% in FY16-19E). Hence, we maintain our BUY rating on the stock with a revised target price of Rs 195 (i.e. EV of Rs 1.5 crore/room).


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