Look at Byke Hospitality: Prakash Diwan

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "Byke Hospitality is fairly unusual pick and given the fact that it is a bit early for people to look at hospitality as a sector which is sunrise and promising. This is one company that is very unique and reason I chose is, it has a unique model where there are not only in hotel business which is very asset light model. They have actually leased 80 percent of the properties. They don’t build their own, so about six properties are which they have leased two of their own in places like Goa, Matheran, Jaipur and even Thane. All of them start with Byke – The Byke Old Anchor Goa, The Byke Grassfield Jaipur and The Byke Heritage. A family called Patodias run this since about four years. They have done so well in terms of making it efficient enough and have a huge aggregation business a chartering business. They buy hotel rooms in bulk room other players and have a network about 260 agents whom they sell this through traditionally and that business is rocking for them."

"It is scalable in spite of MakeMyTrip and Hotel.com and the so called completion they manage to sell their inventory very well. Both these businesses have grown at a topline of CAGR of 55 percent ever since they took over and almost like 100 percent on profit after tax (PAT). They don’t put in their money and block it in any which way. What I like about this model is that going forward imagine if things were to improve in this industry business like this would start paying off so well," he said.

"They are reducing their debt consciously to make sure that their return ratio is even improved further from where they are. They are anyways highest in the industry almost in that segment but it is a great undiscovered stock. I was surprised to see a couple of asset management companies who have owned this stock. They have been sitting quietly on it waiting for it to get discovered but it is pretty good story in the making."