Rakesh Jhunjhunwala Stocks: Over 21% upside seen in IHCL shares; Know why brokerages bullish on this Tata Group company scrip

Billionaire investor Rakesh Jhunjhunwala-backed Indian Hotels Company Limited (IHCL) shares surged nearly 5 per cent on the BSE intraday on Monday, as the hotel-chain firm announced a future road map for profitable growth with an aim to improve margins by 33 per cent. 

Global brokerage firm UBS is bullish on Indian Hotels Company and maintains a Buy rating with a target of Rs 270 per share, implying over 21 per cent upside in the scrip from Friday’s closing price. 

The brokerage expects Indian Hotels in the first half of FY23 to surprise positively on growth and margins and raises FY23-24 earnings estimates by 9-12 per cent. It said, “Accelerating recovery provides better growth visibility and significant recovery in the business segment; leisure continued to perform well.” 

Ace investor Rakesh Jhunjhunwala, who is also called as the Big Bull of the Indian stock market, holds about 30,016,965 equity shares, which translates into a 2.1 per cent stake in the Indian Hotels, as per the latest shareholding pattern of the company available on the BSE. 

The company on Monday announced Ahvaan 2025. “Under the plan, it will re-engineer its margins, re-imagine its brandscape and restructure its portfolio. It aims to build a portfolio of 300 hotels, clock a 33 per cent EBITDA margin with a 35 per cent EBITDA share contribution from new businesses and management fees by FY 2025-26,” Indian Hotels said in a media release. 

Indian Hotels and its subsidiaries bring together a group of brands and businesses that offer a fusion of warm Indian hospitality and world-class service. These include Taj, SeleQtions, Vivanta, and Ginger brands of hotels. 

The stock on Monday closed at over 3.5 per cent higher to Rs 231 per share on the BSE as compared to a 0.07 per cent fall in the S&P BSE Sensex at the close.