Best Hotel Stocks in September 2024 – Based on 5yr CAGR

India’s geographical diversity and rich cultural experiences make it a leading country in international tourism expenditure. The travel market in India is expected to grow from an estimated US$ 75 billion in FY20 to US$ 125 billion by FY27. As one of the most sought-after travel destinations globally, India’s tourism and hospitality industry has become a significant driver of growth within the services sector. Numerous hotels and resorts are contributing to this growth. In this article, check the best hotel stocks in India in September 2024, selected based on the 5-yr CAGR. 

Best Hotel Stocks in September 2024 – Based on 5yr CAGR

Note: The hotel stocks list provided here is as of September 24, 2024. The hotel sector stocks are selected from the Nifty 500 universe and are sorted based on the 5yr CAGR. 

Overview of the Best Hotel Stocks in September 2024

• Indian Hotels Company Ltd

IHCL is one of India’s leading hospitality companies. The company’s operations are spread across 4 continents, 12 countries, and more than 100 cities. In FY 2024, the company’s total income was ₹6,951.67 crore, compared to ₹5,948.81 crore in FY 2023. The profit for the year ended March 31, 2024, was ₹1,330.24 crore, increased from ₹1,052.83 crore in FY 2023.

Key metrics:

• ROCE: 14.81%
• ROE: 13.42%

• Chalet Hotels Ltd

Chalet Hotels is involved in the business of hospitality (hotels), commercial and retail operations and real estate development. In FY 2024, the company’s total income was ₹14,370.38 million, compared to ₹11,779.54 million in FY 2023. The profit for the year ended March 31, 2024, was ₹2,781.81 million, increased from ₹1,832.90 million in FY 2023.

Key metrics:

• ROCE: 12.15%
• ROE: 14.72%

• Mahindra Holidays and Resorts India Ltd

Mahindra Holidays & Resorts India Ltd (MHRIL) is a part of the Leisure and Hospitality sector of the Mahindra Group. The company provides family holidays mainly through vacation ownership memberships. In FY 2024, the company’s total income was ₹2,819.6 crore, compared to ₹2,623.9 crore in FY 2023. The profit for the year ended March 31, 2024, was ₹116.0 crore, increased from ₹113.9 crore in FY 2023.

Key metrics:

• ROCE: 4.21%
• ROE: 24.79%

• Lemon Tree Hotels Ltd

Lemon Tree Hotels Ltd operates in the upscale segment and in the mid-priced sector, consisting of the upper-midscale, midscale and economy segments. In FY 2024, the company’s total income was ₹1,07,676 lakh, compared to ₹87,857 lakh in FY 2023. The profit for the year ended March 31, 2024, was ₹18,170 lakh, increased by 29% from ₹14,054 lakh in FY 2023.

Key metrics:

• ROCE: 11.57%
• ROE: 10.03%

• EIH Ltd

EIH is mainly involved in owning and managing premium luxury hotels and cruisers under the brands, such as Oberoi and Trident. In FY 2024, the company’s total income was ₹26,259.74 million, compared to ₹20,964.07 million in FY 2023. The profit for the year ended March 31, 2024, was ₹6,777.05 million, increased from ₹3,290.97 million in FY 2023.

Key metrics:

• ROCE: 20.81%
• ROE: 16.91%

Hotel Industry Growth in India 

The Indian hotel market, which includes domestic, inbound, and outbound segments, was valued at ~US$ 32 billion in FY20 and is projected to grow to around US$ 52 billion by FY27. This growth is fueled by rising demand from travellers and ongoing efforts by travel agents to enhance market presence. 

By 2028, international tourist arrivals are anticipated to reach 30.5 billion, generating over US$ 59 billion in revenue. According to the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in December 2023 totaled 1,070,163. For the entire year of 2023, FTAs amounted to 9,236,108, compared to 6,437,467 in 2022. 

The industry is expected to see a significant rise in domestic tourism, driven by India’s large population. Additionally, growing global interest in leisure and business trips to India is set to stimulate long-term growth in the industry further. The expansion of the Indian hospitality sector is bolstered by increasing travel and tourism activities, reflected in a notable rise in both domestic and international tourists visiting for business and leisure, thereby creating new opportunities in tourism and hospitality.

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.