Inactive members - Registered but have not posted any topic will be removed after 6 Months.
0 Members and 1 Guest are viewing this topic.
Hotel Leelaventures Ltd (Leela), a luxury hotels player with an inventory of 1,196 rooms, is poised to benefit from an imminent rebound in India’s highly under-supplied hotels sector. Over the last seven years, room supply has grown at a tepid 4% annually, and WTCC estimates that India will need an additional 50,000 premium hotel rooms over the next three years. A supply crunch will continue to drive up room rates in most cities, in our view.Foreign tourist arrivals (FTA) in India have bottomed out - after declining 18% in January this year, they dropped by just 1% YoY in October. With the beginning of the peak season in October, we expect FTAs to improve further in coming months, as the domestic and global economy continues to recover, boosting travel. Occupancy rates in several cities have improved sequentially, and room rates in many cities have risen 19-40% sequentially in September quarter.Expect a 60% CAGR in Leela’s earnings over FY10-12ii, supported by its flagship properties in Bangalore and Mumbai and new room additions (1,120 over FY10-11). To reduce its exposure to market concentration risk, Leela is widening its presence across the key metros of Delhi and Chennai. BUY with a target price of Rs55.
