Mumbai: JPMorgan has retained Indian Hotels at "neutral" with a September 2012 target price of Rs 77 but highlighted that the hotel chain operator will benefit from a weaker rupee. A weaker rupee would make tariffs in U.S. dollar terms cheaper for foreign tourists, and help pricing power on a rupee basis for the operator of Taj hotels and resorts worldwide, JP Morgan said in a report dated on Thursday.
Tourists accounts for 60 per cent of the demand in luxury hotels in India, JPMorgan estimates. JPMorgan added current valuations of enterprise value/room of Rs 10 per room are "attractive and significantly below replacement costs."
However, the investment bank said it would need to see more improvement in the domestic economy and a turnaround at The Pierre, Indian Hotel's flagship luxury hotel in New York, before looking to upgrade the stock.
Copyright Thomson Reuters 2012
Tourists accounts for 60 per cent of the demand in luxury hotels in India, JPMorgan estimates. JPMorgan added current valuations of enterprise value/room of Rs 10 per room are "attractive and significantly below replacement costs."
However, the investment bank said it would need to see more improvement in the domestic economy and a turnaround at The Pierre, Indian Hotel's flagship luxury hotel in New York, before looking to upgrade the stock.
Copyright Thomson Reuters 2012
