Advani Hotels and Resorts: A Small-cap Hotel Stock with Significant Potential

Today, the share price of Advani Hotels and Resorts soared by over 3% on the BSE, trading at Rs 89.05, up from Rs 85.72 the previous day. The stock opened at Rs 84.55, reached an intraday high of Rs 90.43, and touched a low of Rs 84.55.

This increase in Advani Hotels and Resorts’ share price is attributed to the positive sentiment in the Indian tourism sector. The company’s focus on leisure destinations, which are benefiting from pent-up demand for travel post-pandemic, likely contributes to the stock’s strong performance.

Advani Hotels and Resorts (India) Ltd. (AHR) is a small-cap hotel company with a presence in the budget and mid-range segments. The company operates a chain of hotels and resorts across India, primarily focusing on leisure destinations. AHR has a strong track record of performance and is well-positioned to capitalize on sector growth.

Despite its small size, AHR has shone in the Indian hotel industry in recent years. The company has reported a compounded growth rate of 36% in net profits over the last three years and has distributed over 50% of its profits among shareholders in the form of dividends (except for the COVID year of FY21).

In the financial year ending March 31, 2023 (FY23), AHR exhibited outstanding performance on key parameters such as average occupancy, revenue per available room (RevPAR), revenue per occupied room (RevPOR), net profit margins, return on assets, and dividend payout.

AHR’s sole hotel is situated in Goa, a major tourist destination in India. Goa’s future appears promising due to several factors, including:

– The inauguration of the new Mopa airport in North Goa, facilitating better connectivity to more Indian cities and attracting foreign scheduled flights.

– The existing Dabolim airport being one of the four airports selected for automatic self-screening of passengers and set to have two aircraft bays by June 2024.

– The government’s emphasis on promoting tourism in Goa.

The Indian tourism sector is projected to continue growing in the coming years, and AHR is well-positioned to capitalize on this trend. The company boasts a strong track record of performance, a healthy balance sheet, and a management team with a proven track record.

Disclaimer: This blog is intended exclusively for educational purposes. The securities mentioned are provided as examples and not as recommendations. It is based on several secondary sources available on the internet and is subject to change. Please consult with an expert before making related decisions.