Indian Hotels to benefit from weaker rupee: JP Morgan
Reuters | Updated On: July 08, 2012 11:19 (IST)
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
|For Profit Update,