Moneycontrol PRO
Upcoming Event : LeapToUnicorn - mentoring, networking and fundraising for startups. Register now

'As travel & tourism related industries expected to grow drastically, these 7 stocks look promising'

As the world reopens, investors can look at companies like IRCTC, IndiGo, Mahindra Holidays among others

June 26, 2021 / 09:09 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

India has always been famous for its rich heritage and ancient culture. The glorious past and cultural diversity make it a potent blend that attracts millions of tourists every year to its alluring heritage. Even the geographical supremacy makes the country a pinnacle in front of world tourism. All this takes us towards the travel and tourism industry of the country that is even considered being as an important contributor to the economy. It not only generates revenue for the country but one of the major drivers for economic growth and development. The tourism industry is considered a labour-centric sector, as it generated employment, fostering skill development and local entrepreneurship.

The travel and tourism industry is an integral pillar of the 'Make in India' campaign. It is one of the biggest and fastest-growing sectors and often has been considered as a vulnerable industry i.e. in comparison to other manufacturing, the travel and tourism industry is more impuissant to external or internal blow or distress. The industry has been hampered the most in the past fiscal year as the uninvited guest - Covid-19 checked in and has dented the economic aspect of the sector. The black swan event of the pandemic has shaken the very foundation of the most vibrant and vulnerable industry such that survival is being at stake now.

The Federation of Associations in Indian Tourism & Hospitality (FAITH) have stated FY20-21 to be the worst for the industry and even the apex sectoral body, Ministry of Tourism at the beginning of pandemic has forecasted the same to happen and estimated a wipe-out around Rs 15 lakh crore in the last fiscal. Various measures and initiatives have been taken by the Government of India (GOI) in past quarters just to keep the industry breathing.

However, the relaxation post the second wave could boost the industry as tourism starts but the dent which has already been occurred needs proper invasion and aid from the concerned department and time to restore. Various sectors are expected to grow from here on, in terms of hospitality, leisure and travel. Firstly, as we expect people to start commuting to various places, those companies which have a direct relation to it will see a surge in demand. The major players in travelling industries like IRCTC and IndiGo, are expected to witness some boost in the business and the same could be expected from the share price.

With the improvement in the travelling network, the next most lucrative leisure business is expected to see a growth in demand for their services. This is likely to improve the financial performance as the demand for services will gradually improve. In this case, the listed companies like Mahindra Holidays, Indian Hotels, Lemon Tree and EIH are likely to see improved valuation and even on technical charts these stocks look promising.

As the various industries related to travel and tourism are expected to grow drastically as India is gradually reaching towards its vaccination drive. In the era of artificial intelligence and networking, one of the leading online travel agency with more than 59,000 registered travel agents in almost all major cities Easemytrip is expected to show an extraordinary performance in the coming quarters and thus could be seen as an investment opportunity.

As the world of tourism restarts post the Covid-19 pandemic, one should not be carefree as this might lead to the third wave and hence cautiousness should be maintained even after the world reopens itself. The same could be seen on the equity charts as the market will closely track the financial circulation and the preparation for the possibility of the next wave to retain the economy on track.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Osho Krishan
first published: Jun 26, 2021 09:09 am