IHCL scales 52-week peak after Morgan Stanley upgrades target with 6% upside

In the past three months, the stock of IHCL surged over 12 percent as against 10 percent rise in the benchmark Sensex

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Shares of Indian Hotels Company (IHCL) gained over 1 percent to hit a 52-week high of Rs 458 on January 4 after global brokerage firm Morgan Stanley upgraded the target to Rs 490 from Rs 450, implying an upside of 7 percent from the current levels.

In the past three months, the stock of IHCL surged over 12 percent as against a 10 percent rise in the benchmark Sensex.

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Highlighting the rationale behind the target upgrade, analysts at Morgan Stanley said that they see continued double-digit growth in the October-December quarter (Q3FY4) average room rates.

"We see standalone occupancy ratios reaching one the highest levels for IHCL. The ramp-up of Ginger Mumbai and trends in revenue per average room rent to be some of the key monitorables," the brokerage firm said.

Earlier, analysts at Kotak Institutional Equities had an 'add' tag on IHCL with a target price of Rs 460 per share.

Also read: Sensex, Nifty rise after 2 days of profit-booking, largecap flavour plays out

"The hospitality sector will continue to build on the record profitability of FY23 as new supply after Covid will come in at a moderated pace (back-ended CAGR of 6 percent over FY23-28), whereas room rates and occupancy will continue to benefit from a healthy domestic demand (9 percent CAGR) and improving influx of foreign tourists," the brokerage firm said.

IHCL through its iconic ‘Taj’ brand, rules the luxury hotels landscape across India; a few other brands such as Ginger (mid-scale) have helped it make its presence in the mid-segment as well. It has the largest portfolio of 22,465 keys, has 13,093 owned and the balance under the management contract model.

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