Hopes of rating upgrades woo funds to hotel stocks
Hotel stocks have not participated in the recent rally in mid- and small-cap stocks, but if brokers are to be believed, these stocks are due for a rerating in the near future. Dealers at institutional broking houses say that fund managers have been enquiring about key stocks in this sector after their quarterly numbers. Many hotels have seen a significant improvement in average room rates (ARRs), along with an increase in occupancy rates. The occupancy rates have improved to 65% in the first quarter for most hotels, compared to 50-52% for the corresponding quarter last year. A mutual fund, which shares its name with a zodiac sign, is said to be a big buyer in Indian Hotels in the past few trading sessions. On Wednesday, the stock closed at Rs 96.15 down nearly 1%. Analysts say that shares of hotel companies traditionally perform well during second and third quarters of the financial year, as tourist activity starts to pick up.
Hotel stocks have not participated in the recent rally in mid- and small-cap stocks, but if brokers are to be believed, these stocks are due for a rerating in the near future. Dealers at institutional broking houses say that fund managers have been enquiring about key stocks in this sector after their quarterly numbers. Many hotels have seen a significant improvement in average room rates (ARRs), along with an increase in occupancy rates. The occupancy rates have improved to 65% in the first quarter for most hotels, compared to 50-52% for the corresponding quarter last year. A mutual fund, which shares its name with a zodiac sign, is said to be a big buyer in Indian Hotels in the past few trading sessions. On Wednesday, the stock closed at Rs 96.15 down nearly 1%. Analysts say that shares of hotel companies traditionally perform well during second and third quarters of the financial year, as tourist activity starts to pick up.
