A closer look at the top-performing tourism stocks

The tourism industry, a cornerstone of economic growth, has seen its fair share of challenges and triumphs. As we explore the financial outcomes of major players in the sector during the fiscal year 2022-23, a compelling narrative emerges. 

 Budget Bonanza 

Leading the charge with an astounding 125% year-on-year (YoY) net profit surge is HLV Ltd. This budget hotel chain has tapped into the burgeoning domestic tourism market, particularly attracting value-conscious travellers. Chalet Hotels Ltd. follows closely behind, boasting a 44% YoY profit increase. Their focus on luxury and wellness retreats resonates with a segment seeking high-end experiences. 

Established Giants Gain Ground 

Hospitality heavyweights like EIH and Indian Hotels Co Ltd. (IHCL) are also delivering robust performances, reporting profit expansions exceeding 30% and 9%, respectively. Their diverse portfolios encompassing luxury, mid-range, and budget offerings cater to a broad spectrum of traveller preferences. 

Emerging Exuberance 

New players like Lemon Tree Hotels Ltd. and Easy Trip Planners Ltd. are carving their niches with impressive profit gains exceeding 14%. Lemon Tree’s focus on business travel and its expansion into tier-II cities is paying off, while Easy Trip Planners’ online travel booking platform capitalizes on the digital booking boom. 

Government Giants Glide 

Government-owned entities like Indian Railway Catering & Tourism Corporation Ltd. (IRCTC) and Tourism Finance Corporation of India Ltd. (TFCI) are also witnessing healthy profit growth, albeit at a slightly slower pace. IRCTC’s monopoly on Indian Railways catering and its foray into budget hotels contribute to its steady climb. TFCI, a financier of tourism projects, benefits from the overall sector’s revival. 

Headwinds in High-End Havens 

The data also reveals companies facing challenges despite the industry’s positive trajectory. Delta Corp Ltd., primarily focused on casinos, grapples with regulatory uncertainties leading to a 14% profit decline. Luxury hotel chains like TajGVK Hotels & Resorts Ltd. and Mahindra Holidays & Resorts India Ltd. are experiencing slower growth, potentially due to the higher impact of the pandemic on their target clientele. 

A Bright Outlook for Travel-Related Stocks 

In conclusion, the Indian tourism sector is witnessing a profit surge, with several companies demonstrating remarkable resilience and agility in the post-pandemic landscape. Budget hotels, wellness retreats, and online travel platforms are leading the charge, while established players are adapting and diversifying to maintain their competitive edge. While some pockets of the industry face challenges, the overall outlook remains optimistic, indicating exciting times ahead for travel-related stocks. 

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.