Elara Capital Predicts 26% Upside for Hotel Stock Post Q4 Results – Investment Opportunity in XYZ (XYZ)

• Domestic brokerage Elara Capital has reiterated a “Buy” recommendation for Juniper Hotels following its Q4 results (Q4FY24), with a target price of ₹545.
• The brokerage firm estimates that the stock might rise by 26% going forward.
• Juniper Hotels is building big box hotels in strategic demand-generating areas and modernizing existing hotels by adding ballrooms, F&B shops, and refurbishments.

Elara Capital sees a 26% upside in Juniper Hotels stock after Q4 results; here’s why.

Optimistic Growth Narrative

Elara Capital’s research highlights that Juniper Hotels is strategically expanding by building large hotels in high-demand areas. This expansion is complemented by the modernization of existing properties, including the addition of ballrooms, F&B outlets, and refurbishments. The brokerage is confident in the company’s growth potential due to these strategic initiatives.

Luxury Portfolio Driving Growth

The domestic brokerage attributes the growth to Juniper Hotels’ luxury portfolio. The research report indicates a 26% gain in topline revenue to ₹250 crore, driven primarily by an 8% increase in average room rate (ARR) to ₹11,110 and a 200 basis point rise in occupancy to 80%. The luxury portfolio saw a 19% increase in revenue per available room (RevPAR), while the upper upmarket portfolio experienced a 7% RevPAR improvement, fueled by a 300 basis point rise in occupancy.

Valuation

“We expect a 10% CAGR in room addition through FY24-28E, driven by organic expansion and inorganic growth opportunities. ARR may grow in high single-digit CAGR over the same period, driven by rate increases as well as a better geographical mix. Being jointly promoted by the Saraf group and Hyatt Hotels Corporation, Juniper Hotel has strong promoter pedigree,” said Elara Capital in its report.

Juniper Hotels Share Price

Juniper Hotels share price today ended 5% lower at ₹424.55 apiece on the BSE. According to Dr. Ravi Singh, SVP – Retail Research, Religare Broking Ltd, Juniper Hotels Limited is a corporation that develops and owns upscale hotels. The company’s portfolio includes seven hotels totaling 1836 keys—including 245 serviced apartments—located in significant Indian locations. Over the past few years, the company’s profitability has consistently improved. Technically, one should wait for a dip to ₹430 to initiate longs with a potential upside of ₹460. For existing positions, one must place a strict stop at ₹425.

Since its debut on February 28, Juniper Hotels’ share price spiked by more than 20%. On the exchanges, Juniper Hotels share price debuted tepidly. The opening price of Juniper Hotels’ shares on the NSE was ₹365, which was 1.39% more than the ₹360 issue price. The debut of Juniper Hotels on the BSE was ₹361.20, which was 0.33% higher than the issue price.

Conclusion

Elara Capital’s optimistic outlook on Juniper Hotels is based on the company’s strategic expansion and modernization efforts, which are expected to drive significant growth. Investors should consider the potential upside and the strong promoter pedigree when evaluating this stock. However, it is advisable to consult with certified experts before making any investment decisions.