SIP Stock with Anil Singhvi: Market Guru gives 2 reasons why you should pick Oriental Hotels in your portfolio

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In the ‘SIP Stock’ programme of Zee Business, research analyst Ashish Chaturvedi picked Oriental Hotels shares, saying the company has strong management and for the pre-opening theme, this company is perfect. In chat with Zee Business Managing Editor Anil Singhvi, Chaturvedi said that over the years, the promoters’ stake is increasing.  

Talking about the company profile in detail, he said that Oriental Hotels is owned by the Tata Group. Over 28.92 per cent of shares are owned by Indian Hotels. The company’s network is very strong. The company has 7 top-class hotels and has 825 rooms of the network. Not just the ownership but day-to-day management and future prospects are planned by the Tata Group.

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Chaturvedi said this theme is over our radar, and to play the pre-opening theme, this company is perfect. Over the years, the promoters’ stake in the stock is increasing. In March 2019, the promoters used to hold a 65.51 per cent stake; while in March 2020, it inched up to 66.01 per cent and now in March 2021, it stands at 67.32 per cent.

He further added that generally, in small-size companies, this is the rare thing to witness. In fact, DIIs put a similar faith in this company and hold a 12.32 per cent stake in it. Fundamentals are extremely good. High growth business, and for the pre-opening theme, it can be a good candidate. Similarly, the stock valuation is extremely good. The market cap of the company is Rs 539 crore, Price Book is 1.2X, and debt-equity is 0.5. The fundamentals are excellent and technical charge is also fabulous, Chaturvedi said.

Talking about the company’s prospects, Zee Business Managing Editor said that the opening theme is my favourite. Because of this theme, other stocks will get strong now. Stocks that are related to travels, tourism, airlines, hotels, restaurants. For now, you can witness a strong rally.  

He cited two reasons. First, unlock or opening up theme is moving strong. And second, the company belongs to a reputed group. The brand is very powerful, with growing promoters holding day by day and DIIs also reciprocate the same. Due to the small stock price, people don’t know much about this company, or it belongs to the Tata Group. Valuation is attractive.  

Singhvi further added that the company has a major presence in South India. And due to reopening in the South, the recovery is expected. Also, if it belongs to Tata Group then don’t worry about the debts.  I believe, the company is gearing up for better profitability. Keep a minimum target of Rs 50.