Rakesh Jhunjhunwala Stock: What makes brokerage bullish on Indian Hotels, 21% upside seen - know reasons here

Billionaire investor Rakesh Jhunjhunwala-backed Indian Hotels Company Limited (IHCL) shares have the potential to grow over 21 per cent on strong occupancy level and balance sheet, a domestic brokerage firm SMC Global Securities said in its note while citing fundamentals of the company. 

Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock market, has 30,016,965 equity shares, which comprises over 2 per cent stake in Indian Hotels, according to the latest BSE shareholding pattern of the company. 

Rakesh Jhunjhunwala and Associates publicly holds 33 stocks in the quarter ended March 2022. The net worth of these stocks has been pegged at Rs 25,723 crore as of June 28, according to the stock analysis website trendlyne.com. 

IHCL has emerged strongly from the impact of the pandemic and all-round improvement was seen during FY22, said SMG Global, adding that the company is focused on expanding its business through asset-light model and strengthened its balance sheet by reducing its debt 

The brokerage further said it is also committed to achieve zero debt in the long term.  

Going forward, the growth momentum is expected to continue expanding portfolio along with improvement in the RevPAR and occupancy level and upswing in domestic demand and recovery in the international markets, SMC also said in its report. 

The brokerage expects that the stock will see a price target of Rs 274 per share (21% upside) in 8 to 10 months’ time frame on a target P/BVx of 5.15x and FY23 BVPS of Rs 53.28. 

Indian Hotels has a portfolio of 221 hotels, including 53 under development globally across four continents, 12 countries and in over 100 locations. During the FY22, IHCL has raised Rs 4,000 crore, in which Rs 2,000 crore was by way of rights issue and an additional Rs 2,000 crore through QIP. 

Th stock on Tuesday opened higher, however, slipped in the trade as day progressed. At around 11:13 AM, it was trading flat with negative bias of Rs 255.85 per share on the BSE as compared to 0.54 per cent fall in the S&P BSE Sensex.