Mar 02 2024, 09:06
4 stocks from different segments of travel & tourism sector:
When it comes to tourism and hospitality, the first thing which comes to mind is airlines and hotels. However if one looks at the whole industry, there are very special and niche players who are part of the whole ecosystem. Right from a digital ticket booking player who has a monopoly to airport lounge service provider which has the maximum market share, to a company which not only sells packages for travel but also has other business which are related to one or the other part of the travel. So, when the debate has settled that as a sector travel and tourism is the one which is likely to have better growth than it has seen in the past then it is probably time to bring these niche players on the watchlist.
Travel and tourism is considered a cyclical industry, there is a busy season and offseason. The price difference between the two seasons used to make the quarter on quarter growth look weaker and right comparison could only be made on a year on year basis. But over the last two years, lines have blurred between what is a busy season and what is off season. This is reflected in very little price differential between the two. In a number of cases, the growth has come on a quarter on quarter basis also. The reason is simple: strong demand for both tourism and business purposes. Though after black swan even like covid, it would be wrong to use the words like "100" percent. But it is very likely that given the way things are panning out in the economy the tailwinds might continue for travel and tourism related companies. When it comes to travel and tourism, the first thing which comes to mind is airlines and hotels. However if one looks at the whole industry, there are very special and niche players who are part of the whole ecosystem. Right from a digital ticket booking player who has a monopoly.
Now a player like this, which is surely a well discovered story of the last three years, but the fact is at least in railways ticket booking system is unlikely to face any threat. Also, even if there is a slowdown in the premium segment of travel and tourism, there is very little probability of a slowdown in overall passenger traffic in railways, and digital booking of tickets will increase only.
Some of these companies don't require a constant dose of capital, while others do, like in the case of an entertainment park, if it wants to expand it would require additional capital but once established, the return on these investments has an element of annuity, which keeps recurring again and again ensuring decent balance sheet, until promoter decided to be too aggressive. On the valuation front, like any other part of the market they are not cheap, but given the overall tailwinds, it might be worthwhile to keep them on watchlist.
The list comprises companies with a target upside potential of up to percent from this space. The stocks collated with data from the latest Stock Reports Plus report dated Mar 1st, 2024.
Leisure stocks - Upside potential
Mar 1, 2024
Company Name
Avg Score
Reco
Analyst Count
* Upside Potential %
1Y Returns %
Market Cap Rs Cr
Inst Stake%
Market Cap Type
Wonderla Holidays
Strong Buy
9
2
47.2
4.3
Mid
127.8
5,344
Thomas Cook India
Strong Buy
5
2
43.3
9.4
Mid
162.4
7,726
Dreamfolks Services
Strong Buy
5
4
42.0
13.7
Small
14.6
2,650
IRCTC
6
Hold
6
16.5
16.0
Large
52.2
74,152
Calculated from highest price target given by analysts
source: et
Mar 02 2024, 09:06
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