Why hotel stocks are skyrocketing? Experts list out these stocks to buy

Hotel stocks like Indian Hotels, Lemon Tree Hotels, EIH, Mahindra Holidays & Resorts have delivered stellar returns in recent sessions. In the last one month. Indian Hotels share price has ascended to the tune of 22 percent, Lemon Tree hotels share price has surged around 25 percent, EIH stock price has risen around 24 percent whereas Mahindra Holidays & Resorts shares have logged around 15 percent rise.

According to stock market experts, investors are highly bullish on hotel stocks due to the upcoming festival season. They said that despite the rise in interest rate by various banks, the rate of spending by the target audience of such big hotels has not dropped a single hint of decrease in their spending. So, credit spends being maintained by the consumers and fast approaching season has given wings to these hotel stocks. They said that low risk investors can buy Indian Hotels, whereas those who are ready to take some risk and have a long-term perspective, can buy Lemon Tree Hotels. However, they advised investors to wait for some profit-booking as the stocks have already surged a lot in recent sessions.

Speaking on the reason for rise in hotel stocks, Manoj Dalmia, Founder & Director at Proficient Equities said, “Hotel stocks are rising because of the fast approaching festival season. Generally, hotel companies give better numbers after the end of festival season and market is keeping that in mind and has gone bullish on better quarterly numbers from the companies. At the same time, market is vigilant about the credit spending status of such hotel consumers. It has been witnessed that despite rising bank interest rates, people have not curtailed on their spending and hence, hotel companies are expected to give much better numbers in upcoming quarters.”

Sumeet Bagadia, Executive Director at Choice Broking said, “Most of the popular hotel stocks are looking strong on chart pattern. But, Indian Hotels is expected to continue rally despite one way movement in last few months. Those who have this stock in their portfolio are advised to hold the Tata group stock as possible ₹:350 to: ₹:360 levels maintaining stop loss at: ₹:315 apiece levels.”

On which hotel stock to buy in current market scenario, Manoj Dalmia of Proficient Equities said, “Those who have low risk appetite can buy Indian Hotels at around ₹:300 levels for medium term target of: ₹:376 a piece. However, one must maintain strict stop loss at: ₹:285 while taking position in this Tata group stock. However, those long-term investors who are ready to take some risk can buy Lemon Tree Hotels around ₹:70 levels maintaining stop loss at: ₹:60 apiece levels. This stock may give sharp upside move after giving breakout at: ₹:92 on closing basis. After breakout, it will hit soon ₹:115 levels.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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