4 Hotel and Hospitality Sector Stock Ideas from Sharekhan

Sharekhan in its brokerage report has identified 4 stocks of companies that are part of quick service restaurants and hospitality chain that have potential to grow. The companies are Restaurant Brands Asia, Indian Hotels Company, Lemon Tree Hotels and Wonderla Holidays Limited.

Restaurant Brands Asia is the world's second largest burger franchisee company. Burger King franchisee brand owner is a quick service restaurant(QSR).

The Indian Hotels Company Limited and Lemon Tree Hotels is are Indian hospitality company that manages a portfolio of hotels. Additionally Indian Hotels Company Limited also manages resorts, jungle safaris, palaces, spas and in-flight catering services and is part of India's Tata Group. While Lemon Tree owns and operates 84 hotels with a total of 8300 rooms in 52 cities across India.

Wonderla Holidays Limited operates three largest amusement parks in Kochi, Bengaluru and Hyderabad; and the Wonderla resort in Bengaluru under the brand name Wonderla.

In the report the brokerage outlined the performance of QSR and the hospitality industry. "QSR and hospitality universe registered strong y-o-y revenue growth of 31.2% in Q3FY2023 (3-year CAGR of 20%).Double digit revenue growth for QSR companies was largely driven by store additions, while SSSG remained muted in Q3, impacted by weak consumer sentiments. Hotel companies such as Indian Hotels Company and Lemon Tree Hotels posted strong y-o-y revenue growth of 52% and 63%, respectively, while amusement park players such as Wonderla Holidays posted stellar numbers in Q3 with revenue growing by 2.3x y-o-y, sharp expansion in EBIDTA margins, and PAT growing by 9x y-o-y. EBIDTA margin of QSR companies was lower, impacted by raw-material inflation and store additions, while hospitality companies witnessed sharp improvement in profitability due to strong operating leverage and sustained benefits of cost-saving initiatives."

"We expect discretionary spends to gradually improve and see strength prior to the next festive season. Hotel companies would continue to post strong performance as room demand is expected to stay ahead of room supply over the next three to four years. In the hospitality space, we continue to prefer Lemon Tree Hotels and Wonderla Holidays with strong industry tailwinds over the next two to three years and relatively stable balance sheet." as per the Sharekhan report.

Company Name	View	Target Price (Rs/share)	Current Market Price (Rs/share)
Restaurant Brands Asia	Buy	135	96.30
Indian Hotels Company	Buy	380	309.65
Lemon Tree Hotel	Positive	108	73.95
Wonderla Holidays	Buy	475	425.30

Disclaimer:

The stocks have been picked from the brokerage report of Sharekhan, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.