Hem Research is bullish on Hotel Leela Venture and has recommended buy rating on the stock with a target price of Rs 85 in its February 19, 2008 report. “The Hotel Leela entry into Hyderabad and Pune would give fillip to its revenues due to an increase in the growingIT and ITeS industries in these cities. Both the cities in recent past seen huge surge in demand due to the growing number of business travelers thereby increasing the occupancy rates of the rooms. The Hotel Leela with upcoming hotels in Gurgaon, Udaipur, Chennai, Delhi, Pune and Hyderabad will have 2,750 rooms over the next three years from the current 1,086 rooms. Of the six proposed projects, the Gurgaon hotel is expected to be operational first followed by projects in Udaipur, Chennai, Delhi, Hyderabad and Pune. These facilities once becoming operational will generate huge turnover for the Hotel Leela and thereby add to its top line and bottom line."
"The Hotel Leela has emerged as one of the major players in the premium segment, though it is present in western and southern India only but it has identified this lacuna and embarked on an expansion spree to set up a pan-India pres-ence to capitalise on the increasing demand in the country. The stock at the current market price of Rs 52 will trade 11.30 times to its earnings and 2.38 times to its book value and is having lots of upside potential in the medium to long-term. Therefore, we are initiating ‘BUY’ signal on the stock with the target price of Rs 85, which is approximately 63% up from the current market price of Rs 52,"says Hem Research report.
"The Hotel Leela has emerged as one of the major players in the premium segment, though it is present in western and southern India only but it has identified this lacuna and embarked on an expansion spree to set up a pan-India pres-ence to capitalise on the increasing demand in the country. The stock at the current market price of Rs 52 will trade 11.30 times to its earnings and 2.38 times to its book value and is having lots of upside potential in the medium to long-term. Therefore, we are initiating ‘BUY’ signal on the stock with the target price of Rs 85, which is approximately 63% up from the current market price of Rs 52,"says Hem Research report.
