No more Taj! Indian Hotels tanks 6%; JP Morgan cuts target

Written By Unknown on Selasa, 12 Agustus 2014 | 16.03

JP Morgan has reduced its target on the stock to Rs 107 from Rs 120 per share. According to the brokerage, the flat standalone revenue growth was the main disappointment in the numbers compared to the 3-4 percent Y-o-Y growth seen over the last three quarters.

Moneycontrol Bureau

Shares of  Indian Hotels are under pressure as its net loss increased to Rs 34.82 crore in the  quarter ended June 2014 from Rs 19.09 crore in the year-ago period. The stock tanked 6 percent intraday on Tuesday. Investors have been offloading the stock after Raymond Bickson quit as MD & CEO earlier this month.

JP Morgan has reduced its target on the stock to Rs 107 from Rs 120 per share. According to the brokerage, the flat standalone revenue growth was the main disappointment in the numbers compared to the 3-4 percent Y-o-Y growth seen over the last three quarters that pointed toward improvement in domestic fundamentals, and was especially surprising in the context of a pickup in inbound tourist growth, which has improved Y-o-Y to near 10 percent.

"Q1 is the weakest quarter of the full-year numbers and, hence, disparities are wide. We are adjusting our targets and per-share estimates to factor in dilution due to the rights and Sydney hotel asset sale.," it said in a report.

The company sold its hotel in Sydney to Hong Kong based Hind Hotels & Properties Group, which operates hotels and serviced apartments under the Ovolo brand for AUD 32 million. Samsara Properties, an offshore wholly owned subsidiary of Indian Hotels divested 100 percent of its shareholding in BLUE Sydney, A Taj Hotel, in favour of Australia Hotels & Properties Limited.

Indian Hotels, meanwhile, is planning to raise Rs 1,000 crore by way of rights issue.

Consolidated net sales of the Tata firm rose to Rs. 937.46 crore for the quarter under consideration as against Rs. 908.70 crore a year ago.

At 13:54 hrs Indian Hotels Company was quoting at Rs 82.15, down Rs 5.05, or 5.79 percent on the BSE.

Posted by Nasrin Sultana


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