India Infoline has maintained market performer rating on Taj GVK Hotels & Resorts with target price of Rs 111 in its July 31, 2008 report. " Taj GVK Hotels & Resorts Q1 FY09 sales increased by 3.5% yoy as ARR growth in its main Hyderabad market remained muted yoy. However, margin decline of 60bps yoy was less than that witnessed in larger sized peers like Hotel Leela and was on account of higher staff and fuel expenses. Net profit remained virtually unchanged on lack of any room additions and marginal ARR increases."
"Taj GVK Hotels would commission two hotels one each in Chennai and Hyderabad by CY10 which would add about 405 rooms to its portfolio. In addition it also has plans for brownfield expansion at its existing properties in Hyderabad which would aid volume growth in future. Although we expect Hyderabad ARR growth to continue to remain muted on account of rising airfares and inflation, a high interest rate scenario implies that not all the announced hotel projects are likely to materialize in the city. We would prefer to observe the evolving room demand in the company's main market, especially in the busy season, and for now maintain our Market Performer stance but with a reduced price target of Rs 111." According to India Infoline report.
