Shares of hotel operators, multiplexes and tourism firms, which had been stalling over the last two years, have perked up as investors expect a rebound on the back of international flights resuming normal operations, extended weekend, IPL and reopening of offices as virus curbs ease .
Hospitality stocks Wonderla Holidays and Imagicaworld Entertainment have surged 18 and 47 percent respectively since the start of the year. Since 1 March, both stocks have risen 12 and 31 percent respectively.
This year so far, hotel stocks such as Chalet Hotel have advanced 44 percent, Royal Orchid 74 percent, TajGVK Hotels 41 percent, EIH Associates 46 percent and Indian Hotels 41 percent. Since the start of March, all the hotel stocks have gained 20-56 percent.
Tour operator Thomas Cook India Ltd and online travel firm Easy Trip Planners have advanced 45 percent each since the start of March while so far this year both have gained nearly 50 percent each. Multiplex stocks such as PVR and Inox Leisure have surged 17 and 24 percent respectively since the start of March and 47 percent each since the start of the year.
Analysts believe COVID restrictions easing and reopening of offices and business travel is set to give a leg-up to the sector which will also see vacations, business travels, and IPL improving earnings even as investors await March quarter results and management commentary.
For the December quarter, the hospitality sector reported robust revenue recovery, aided by strong growth in leisure (festival season, weddings, staycations) and business travel. Business operations in January were curbed by a resurgence of pandemic. However, with restrictions starting to ease toward the month’s end, firms are expecting robust recovery in the latter part of the quarter, analysts said.
Investors have been piling into multiplex stocks after reports suggested the RRR movie raked in over Rs 1,000 crore worldwide. Also the new upcoming release of KGF2 is likely to further increase interest in multiplex stocks.
“Things are looking better for the hotel and other industries hit by the virus. The IPL is supporting the hotel rates in Mumbai. Having said that, the overall leisure travel looks very strong and even business travel is recovering across the country. All things put together, this is driving back buoyancy in the hotel sector,” said Nihal Jham, lead equity analyst at Edelweiss Securities.
Analysts said hospitality stocks were trading higher on Wednesday due to a long weekend as India has holidays on Thursday and Friday for Ambedkar Jayanti and Good Friday respectively.
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