Share Review - Taj GVK
Angel Broking recommends Buy with a Target Price of Rs 121 (12 months).
Ta j GVK reported a 1.8% yoy decline in its top line to Rs. 58 cr (Rs.60 cr) for 2Q FY 2012.
OPM came in at 32.1%, as against 32.0% in 2Q FY 2011, up 0.6% yoy.
Occupancy rates (OR), especially for Hyderabad, remained weak during the September quarter due to
political unrest in the city. Chandigarh hotels showed strong improvement over the
previous quarter, with overall OR at 63% for the quarter, while average room rate
(ARR) came in at Rs.7,000.
We are positive on the outlook of the company, given that its key markets, Hyderabad & Chennai, are showing signs of stabilizing.We maintain our Buy recommendation on the stock.
OR fluctuates in Hyderabad properties yoy:
With the ongoing issues over Telangana, OR and ARR fluctuated across Hyderabad properties. Taj Krishna
reported a 2% yoy increase in OR and its ARR improved to 7,700 from 7,200 in
2Q FY 2011.
On the other hand, Taj Deccan & Banjara witnessed a decline in
OR to 67% and 57% from 72% and 71% in 2Q FY 2011, respectively.
ARR remained flat for these properties yoy at 5,000. Taj Chandigarh and Club House
reported 63% OR each, while both witnessed a decline in ARR to 7,000 and 4,700
in 2Q FY 2012 from 7,300 and 5,200 in 2Q FY 2011, respectively. Going ahead,
we expect 2H FY 2012 to be better as it is seasonally stronger for the industry. Also,
Taj Begumpet is expected to be fully operational in 3Q FY 2012.
Outlook and valuation:
We maintain our positive outlook on the entire hotel industry, as increasing foreign tourist arrivals (FTA) and economic growth will lead to a further increase in demand for hotel rooms. TajGVK is expected to benefit
from the addition of its 189 room property in Begumpet, which will take its owned
rooms to 1,086 from 897 currently.
The Share of this company is currently trading at attractive valuations of 11.5x and 9.1x its FY 2012E and FY 2013E EPS, respectively. We have valued the stock at 12x its FY 2013E earnings.
We maintain our Buy viewon the stock with a revised target price of Rs.121
Review by Sharan Lillaney
+91 22 3935 7800 Ext: 6811
Sharanb.lillaney@angelbroking.com
Angel Broking
6th Floor, Ackruti Star Central Road,MIDC
Andheri (E) , Mumbai-93
Main : (91-22) 3935 7600 Extn : 6956
Website : www.angelbroking.com
Angel Broking recommends Buy with a Target Price of Rs 121 (12 months).
Ta j GVK reported a 1.8% yoy decline in its top line to Rs. 58 cr (Rs.60 cr) for 2Q FY 2012.
OPM came in at 32.1%, as against 32.0% in 2Q FY 2011, up 0.6% yoy.
Occupancy rates (OR), especially for Hyderabad, remained weak during the September quarter due to
political unrest in the city. Chandigarh hotels showed strong improvement over the
previous quarter, with overall OR at 63% for the quarter, while average room rate
(ARR) came in at Rs.7,000.
We are positive on the outlook of the company, given that its key markets, Hyderabad & Chennai, are showing signs of stabilizing.We maintain our Buy recommendation on the stock.
OR fluctuates in Hyderabad properties yoy:
With the ongoing issues over Telangana, OR and ARR fluctuated across Hyderabad properties. Taj Krishna
reported a 2% yoy increase in OR and its ARR improved to 7,700 from 7,200 in
2Q FY 2011.
On the other hand, Taj Deccan & Banjara witnessed a decline in
OR to 67% and 57% from 72% and 71% in 2Q FY 2011, respectively.
ARR remained flat for these properties yoy at 5,000. Taj Chandigarh and Club House
reported 63% OR each, while both witnessed a decline in ARR to 7,000 and 4,700
in 2Q FY 2012 from 7,300 and 5,200 in 2Q FY 2011, respectively. Going ahead,
we expect 2H FY 2012 to be better as it is seasonally stronger for the industry. Also,
Taj Begumpet is expected to be fully operational in 3Q FY 2012.
Outlook and valuation:
We maintain our positive outlook on the entire hotel industry, as increasing foreign tourist arrivals (FTA) and economic growth will lead to a further increase in demand for hotel rooms. TajGVK is expected to benefit
from the addition of its 189 room property in Begumpet, which will take its owned
rooms to 1,086 from 897 currently.
The Share of this company is currently trading at attractive valuations of 11.5x and 9.1x its FY 2012E and FY 2013E EPS, respectively. We have valued the stock at 12x its FY 2013E earnings.
We maintain our Buy viewon the stock with a revised target price of Rs.121
Review by Sharan Lillaney
+91 22 3935 7800 Ext: 6811
Sharanb.lillaney@angelbroking.com
Angel Broking
6th Floor, Ackruti Star Central Road,MIDC
Andheri (E) , Mumbai-93
Main : (91-22) 3935 7600 Extn : 6956
Website : www.angelbroking.com
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