Elara Capital bullish on this hotel stock, sees a 26% upside after Q4 results; here’s why

Domestic brokerage Elara Capital has reiterated a "Buy" recommendation for Juniper Hotels following its Q4 results (Q4FY24), with a target price of ₹545. The brokerage firm estimates that the stock might rise by 26% going forward. 

Given that Juniper Hotels is building big box hotels in strategic demand-generating areas, the brokerage said in its research that it is optimistic about the company's growth narrative. Additionally, it is modernising already-existing hotels by adding ballrooms, F&B shops, and refurbishments.

Also Read: Juniper Hotels share price rises 10% after a flat debut: Should you Buy, Sell or Hold the stock?

Additionally, the domestic brokerage thinks that growth is being driven by the luxury portfolio of Juniper Hotel. The research report indicates that Juniper Hotels had a 26% gain in topline revenue to ₹250 crore, driven primarily by an 8% increase in average room rate (ARR) to ₹11,110 and a 200 basis point rise in occupancy to 80%. The luxury portfolio of Juniper Hotels had a 19% increase in revenue per available room (RevPAR). The upper upmarket portfolio's 7% RevPAR improvement was fuelled by a 300 basis point rise in occupancy.

Valuation

“We expect 10% CAGR in room addition through FY24-28E, driven by organic expansion and inorganic growth opportunities. ARR may grow in high single-digit CAGR over the same period, driven by rate increase as well as better geographical mix. Being jointly promoted by the Saraf group and Hyatt Hotels Corporation, Juniper Hotel has strong promoter pedigree,” said Elara Capital in its report.

Also Read: Juniper Hotels IPO: Price band set at ₹342-360 per share; check GMP, key dates, issue details, more

Juniper Hotels share price

Juniper Hotels share price today ended 5% lower at ₹424.55 apiece on the BSE. According to Dr. Ravi Singh, SVP - Retail Research, Religare Broking Ltd, Juniper Hotels Limited is a corporation that develops and owns upscale hotels. Seven hotels totaling 1836 keys—including 245 serviced apartments—located in significant Indian locations make up the company's portfolio. Over the past few years, the company's profitability has consistently improved. Technically, one should wait for a dip of 430 to initiate longs with a potential upside of 460. For existing positions, one must place a strict stop at 425. 

Since its debut on February 28, Juniper Hotels' share price spiked by more than 20%. On the exchanges, Juniper Hotels share price debuted tepidly. The opening price of Juniper Hotels' shares on the NSE was ₹365, which was 1.39% more than the ₹360 issue price. The debut of Juniper Hotels on the BSE was ₹361.20, which was 0.33% higher than the issue price.

Also Read: Juniper Hotels share price makes a tepid debut, stock opens with a mere 1.4% premium at ₹365 apiece on NSE

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.