vengabeats
Nilesh Nagdev
Broking house, India Infoline in bullish on Hotel Leela venture and has maintained buy rating with a target of Rs 380 on the stock.
India Infoline report on Hotel Leelaventure:
Additions to room inventory and higher Average Room Rates (ARRs) to drive growth:
"Hotel Leela venture would add approximately 120 rooms to its Bangalore property by December 2006 while the refurbishment of 'The Leela Kempinski, Mumbai, is expected to be complete by October 2006. In addition, the company has planned to build an 81 room hotel in Udaipur. The five star deluxe resort, to be developed at a cost of Rs 700 million, is expected to be operational by December 2007."
ARRs likely to continue upward trend; Occupancy Rate (OR) to remain stable:
"We expect ARRs at all the locations wherever company property is located to continue to witness an upward trend for the next two to three years. This is primarily on account of no major hotel (in the company's segment) coming into operation during the period. Bangalore property would continue to lead the country in terms of ARRs while Kovalam beach, Kerala resort would register robust growth as foreign and domestic tourist traffic continues to grow. However, ARRs for Bangalore could show restricted growth beyond FY07 (5% growth in FY08) as new hotels are expected to be commissioned in FY08 and FY09."
New hotels in Chennai, Hyderabad and Pune to drive growth beyond 2009:
"The company has planned three new five star deluxe category hotels at Chennai, Hyderabad and Pune. The land for all three projects has been acquired and the hotels are expected to be commissioned by December-March 2009. The Chennai property would also include a 400,000 sq.ft IT/commercial complex, which would be operational by December 2007."
Valuations look attractive:
"The stock currently trades at about 14.0x its FY07 (E) earnings while on an EV/ EBITDA basis it trades at about 10.7x. Its sales are estimated to witeness a CAGR of 47.3% over the next two years while profit is expected to increase by 78.8% compounded annually over the same period. Considering the strong growth potential, we expect the stock to trade at about 14x its FY08 (E) earnings, implying a target price of Rs 380 over the next 12 months. We recommend a buy rating on the stock."
Source:-Moneycontrol
India Infoline report on Hotel Leelaventure:
Additions to room inventory and higher Average Room Rates (ARRs) to drive growth:
"Hotel Leela venture would add approximately 120 rooms to its Bangalore property by December 2006 while the refurbishment of 'The Leela Kempinski, Mumbai, is expected to be complete by October 2006. In addition, the company has planned to build an 81 room hotel in Udaipur. The five star deluxe resort, to be developed at a cost of Rs 700 million, is expected to be operational by December 2007."
ARRs likely to continue upward trend; Occupancy Rate (OR) to remain stable:
"We expect ARRs at all the locations wherever company property is located to continue to witness an upward trend for the next two to three years. This is primarily on account of no major hotel (in the company's segment) coming into operation during the period. Bangalore property would continue to lead the country in terms of ARRs while Kovalam beach, Kerala resort would register robust growth as foreign and domestic tourist traffic continues to grow. However, ARRs for Bangalore could show restricted growth beyond FY07 (5% growth in FY08) as new hotels are expected to be commissioned in FY08 and FY09."
New hotels in Chennai, Hyderabad and Pune to drive growth beyond 2009:
"The company has planned three new five star deluxe category hotels at Chennai, Hyderabad and Pune. The land for all three projects has been acquired and the hotels are expected to be commissioned by December-March 2009. The Chennai property would also include a 400,000 sq.ft IT/commercial complex, which would be operational by December 2007."
Valuations look attractive:
"The stock currently trades at about 14.0x its FY07 (E) earnings while on an EV/ EBITDA basis it trades at about 10.7x. Its sales are estimated to witeness a CAGR of 47.3% over the next two years while profit is expected to increase by 78.8% compounded annually over the same period. Considering the strong growth potential, we expect the stock to trade at about 14x its FY08 (E) earnings, implying a target price of Rs 380 over the next 12 months. We recommend a buy rating on the stock."
Source:-Moneycontrol