Expanding opportunities in Ayodhya tourism boom: Shares of Kamat Hotels jump 5% and hit upper circuit

Kamat Hotels has witnessed a surge in its share price, reaching an upper circuit of 5% on BSE, driven by the optimistic outlook fuelled by increased tourism in Ayodhya. The hotel chain is poised for substantial growth, benefitting from the surge in tourism expected to follow the inauguration of the Ram Mandir on January 22, 2024. The company is not only gearing up for the grand opening but also strategically planning to capitalise on the increased footfall by expanding its presence in the sacred city.

Expansion Plans 

Capitalising on the tourism boom, Kamat Hotels is taking strategic steps to expand its footprint in Ayodhya. The company is in the final stages of preparing to open a 50-room hotel in the city, with plans for two more establishments in the pipeline. This ambitious move aims to cater to the growing demand for quality accommodation as Ayodhya emerges as a prominent religious and cultural destination. However, the company has only disseminated this information through the media and has not officially published it via an exchange press release.

Furthermore, Kamat Hotels’ decision to open three hotels in Ayodhya underscores the company’s strategic vision and readiness to capitalise on emerging opportunities. By positioning itself as a key player in Ayodhya’s hospitality sector, the hotel chain is aligning its growth trajectory with the city’s increasing prominence on the cultural and religious map.

Share performance 

At the start of the day’s trading session, the stock opened at Rs 286.90 per share, indicating an approximate 5% increase compared to the previous day’s closing figure of Rs 273.25 per share on the BSE. As of the time of writing this article, the shares are currently at Rs 286.90 per share on the BSE. The stock has reached the upper circuit price limit of 5%, reflecting strong demand in the market with no sellers willing to offer shares, resulting in potential buyers being unable to make purchases, leading to disappointment among buyers.

The company’s current market capitalisation stands at Rs 707 crore, and the stock has generated a return of 160% in the past one year and a 655% return in the last three years.

Financial Performance:

In the second quarter of FY24, the company reported revenues of Rs 64 crore, reflecting a growth of 3.7% YoY compared to the same quarter in the previous year, when the revenue stood at Rs 61.73 crore. The company posted an operating profit of Rs 18.62 crore for the quarter, in contrast to an operating profit of Rs 18.67 crore in the corresponding quarter of the previous year. Furthermore, the company reported a net profit of Rs 0.03 crore, compared to a net profit of Rs 11.58 crore in the same period last year.

In terms of ownership, the Promoter holds 61.47%. The FIIs hold 0.38%, while the remaining 38.15% is held by public investors, as per the most recent update.

Investors should keep an eye on hotel stocks to capitalise on the opportunity.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.